Ample room ahead for domestic retail market to prosper
VOV.VN - With the COVID-19 pandemic finally being brought under control, the Vietnamese retail market is gathering momentum following the recovery of local consumers’ purchasing power and the plans of businesses to expand operations.
Vu Thi Hau, chairwoman of the Association of Vietnam Retailers, says that despite the impact of the COVID-19 pandemic over the past two years, the retail industry has developed strongly throughout the country. At present, many large supermarket chains are expanding their networks in a bid to increase the market share.
“In the first months of 2022, convenience stores and retail outlets all experienced impressive growth, meeting consumer demand, especially in big cities, that prompted large businesses to pour more capital into the market,” says Hau.
Central Retail, a leading Thai retailer, recently announced plans to invest an additional VND20 trillion in the Vietnamese market over the next five years. The decision by the retail group which owns the Go! and Top Market, formerly Big C, has demonstrated its great ambitions to grab a lion’s share of the market in Vietnam.
The Thai group has initiated plans to boost sales in the Vietnamese market to VND65 trillion, and expand its retail outlets across 55 localities, as opposed to its current investments in 40 provinces, over the coming years.
Another foreign retailer, Aeon, is also planning to build more hypermarkets in Hanoi to go with its existing portfolio along with Long Bien Aeon Mall and Ha Dong Aeon Mall. The Japanese group has built shopping malls in Ho Chi Minh City, Binh Duong, Hanoi, and Hai Phong and is aiming to develop 20 trade centres across the country by 2025.
Many other retailers such as Masan, the owners of WinMart and WinMart+, MM Mega Market, Saigon Co.op, and BRG Mart have also developed plans to expand their operations in order to meet consumer needs.
A prime example of this is Masan Group who recorded a profit of VND1,000 billion in 2020 after acquiring the VinMart and VinMart+ supermarket chain previously owned by Vingroup that faced a loss in 2019. At present, Masan now boasts ownership of roughly 2,800 WinMart and WinMart+ supermarkets, the largest in the country.
The Ministry of Industry and Trade reported that the total retail sales of goods and services over the first six months of the year reached VND2.717 trillion, up 11.7% over the same period from 2021. Without the price increase factor, the aggregate retail sales of goods and services still increased by 7.9%, a figure which highlights the purchasing power of the retail market and provides evidence that it is still relatively good.
The number of supermarkets and trade centres also increased rapidly in the 2010 to 2021 period, climbing from 567 supermarkets and 95 trade centres in 2010 to 1,167 supermarkets and 254 trade centres in 2021.
According to experts, Vietnam that boasts nearly 100 million consumers remains a potential retail market in the long term. It is classified in the group of countries that has a rapidly-growing middle class and fast-paced urbanisation.
Vu Thi Hau, chairwoman of the Association of Vietnam Retailers, says that in order to increase competitiveness, the most important factor is to serve the benefits of customers, no matter if businesses are made up of FDI or they are domestic. In addition, firms must select a suitable location and have close co-ordination with distributors and suppliers to offer goods at competitive prices to consumers.
