Convenience store openings increase steadily
The Vietnamese retail market, which had record-high revenue of US$69.45 billion in the first half of the year, is witnessing a rush of convenience store openings.
 |
The retail market has maintained a stable growth rate of 10% in recent years, an attractive figure in the eyes of international retailers.
The growth rate tends to increase steadily. In 2017, retail turnover increased by 10.9% compared with 2016 to $130 billion.
Meanwhile, in the first six months of 2018, the retail turnover increased by 11.3% compared with the same period last year. In June alone, the figure increased by 12.9%.
Retailers are now running a race of opening new sale points to enlarge their network. GS25, a newcomer in Vietnam, plans to open 50 shops in Vietnam this year, mostly in HCMC, before it marches towards Hanoi by early 2020. The brand from South Korea wants to open 2,500 shops in the next 10 years.
An analyst commented that in the retail industry, a large network is the most important factor that determines the success of retailers.
Speed L belonging to Lotte Mart has turned up in HCM City, though a representative of Lotte Mart said Speed L shops will begin a pilot program before the brand officially joins the Vietnamese market.
South Korean media reported that more convenience store chains of the country are trying to penetrate overseas markets in a plan to seek a new engine for growth as the South Korean market is getting saturated.
Saigon Co-op, the largest Vietnamese owner retail chain, recently launched a 24 hour retail service under the brand ‘Cheers’. The first Cheers shops opened in HCMC in May. They expect to have 50 Cheers in the city this year.
Analysts believe that convenience stores have great potential in Vietnam. However, the market segment is competitive stiff with the presence of many strong brands. To succeed, a chain needs to have hundreds or thousands of shops.
Meanwhile, it takes at least 3-5 years for the shops to take back the investment capital.
Vietnamese retailers have also joined the market segment, but they tend to cooperate with foreign retailers.
Son Kim Land, for example, has teamed up with GS25 from the Republic of Korea. Even Saigon Co-op, the leading Vietnamese retailer which has been successful with many business models, including Co-op mart supermarket, Sense City shopping mall, Co.op Food and Co.op Smile, also has to cooperate with NTUC FairPrice from Singapore in running Cheers shops.
