Vietnamese retail market still attracts investors

Vietnam ’s retail market is still attractive to domestic and foreign investors despite its fall from the top five to the sixth position in the latest survey of 30 emerging markets conducted by the consulting firm A.T.Kearney.

Grant Thornton Vietnam made public a study in late June that 70 percent of 169 domestic and foreign investors continue to consider retailing the most attractive sector in Vietnam in 2009.

The choice is attributable to the Vietnamese economy’s rapid development and opportunities created by the country’s roadmap to open up the retail market, said Matthew Lourey, Corporate Finance Director at Grant Thornton.

Vietnam ’s commercial restructuring and investment encouragement policies have helped boost its retail market potential, he added.

As evidence of this, many foreign investors have continuously expanded their retail business in Vietnam . Big C, a trademark of Casino, one of the leading European retailers, opened a new hypermarket in the central province of Thua Thien Hue on July 13, raising its total retail outlets to eight after its 11-year presence in Vietnam .

On July 9, Metro Cash & Carry opened its ninth wholesale centre in Vietnam , which is located in southern Dong Nai province’s Bien Hoa city.

Metro Cash & Carry Vietnam’s General Director, Randy Guttery, said that Vietnam is one of the economies enjoying the most promising growth in the world and after seven years of operation, the self-service wholesale model has proven to be both adaptable and competitive in the Vietnamese market.

Malaysia ’s Parkson Group, which owns five supermarkets and trade centres in Vietnam , is also planning to build several new supermarkets this year.

Aside from direct investment, foreign investors have also paid attention to another channel of distribution known as franchising. Recently, the US-based Circle K chain of convenience stores has made its debut in Vietnam with its first five shops in Ho Chi Minh City . The group plan to have 100 shops by 2011.

The increasing presence of foreign distributors has stimulated domestic business. Hapro, a prestigious name in the northern region, opened two more supermarkets in June, raising its total number of retail locations to 30. Meanwhile, in the south, Saigon Corp. also boasts its network of 40 outlets.

Domestic supermarket chains have been developing, but few of them are strong enough to dominate the market, especially in the context of commodity shortages and price fevers, said Hoang Tho Xuan, Director of the Domestic Market Department under the Ministry of Industry and Trade (MoIT).

According to the MoIT, despite the global economic crisis, the country’s retail revenues still reached VND548 trillion in the first half of the year, representing a 20 percent growth over the same period last year.

At present, Vietnam has around 140 supermarkets and hypermarkets, 20 trade centres and nearly 1 million sq.m of retail space.