How are foreign retail giants performing in Vietnam?
Auchan has left the Vietnamese market. MM Mega Market and Big C have seen revenue decrease. But Aeon Mall and Lotte Mart continue to expand.
Arriving in Vietnam in 2009, Aeon five years later opened its two first shopping centers – Aeon Mall Celadon in Tan Phu district in HCMC, and Aeon Mall Canary in Binh Duong province. In the same year, it reported revenue of VND1.3 trillion and loss of VND112 billion.
The revenue hit VND3.883 trillion in 2016 and the pre-tax profit was VND54 billion, and it soared to VND5.136 trillion in 2017 and the profit to VND234 billion, or four times bigger than the year before.
Aeon’s representative, at a meeting with Deputy PM Vuong Dinh Hue on February 25, reported that in 2018, Aeon had revenue of $800 million and generated 6,000 jobs.
Aeon’s Masaki Suzuki said Aeon considers Vietnam the key investment point in Southeast Asia and the retailer plans to open 30 shopping malls with total capital of $5 billion in Vietnam.
Despite losses, Lotte still expands
Lotte reported revenue of VND5.793 trillion in 2018 from 11 supermarkets and two hypermarkets, which meant a 7.9 percent growth rate over the year before.
Compared with revenue of VND30 billion in the first two years of operation, 2007-2008, the operation scale of the retail group from South Korea increased by 200 times after 10 years.
However, despite the high growth rate, the giant had incurred an accumulative loss of VND800 billion as of the end of 2017, according to the finance report audited by PwC.
Explaining the figures, Seong Won, finance director of Lotte Vietnam, cited a number of reasons, including unsatisfactory performance of some shopping centers.
He went on to say that the retailer is expanding its operation scale, and each shopping center needs 5-8 years to break even. It plans to open 60 shopping centers throughout the country by 2020.
Others go downhill
Auchan did not do well with its business during the five years it was in Vietnam. The revenue was modest, just 45 million euros in 2018.
In the latest news, it has been transferred to Saigon Co-op, a big Vietnamese retail chain.
After taking over Metro, TCC Group changed the brand to MM Mega Market.
In 2016, MM Mega Market reported modest revenue of VND11.7 trillion, or 20 percent lower than that before the transfer in 2013. The revenue was just equal to that of 2010, when the number of Metro supermarkets was half of the current figure.
In 2016, MM Mega Market reported a loss of VND110 billion.