Regional retailers run fast, Vietnamese inch forward
While other regional countries have made big leaps in developing their retail industries, the achievements gained by Vietnam have been modest in the last 10 years since Vietnam joined the WTO.
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The chair of the Vietnam Retailers’ Association Dinh Thi My Loan said Vietnam is known as a target market for the world’s leading retailers with attractive profits.
According to GSO (General Statistics Office), total retail revenue in 2017 reached US$130 billion, increasing by 10.9% compared with 2016.
However, Vietnamese retailers cannot make big money from the market.
Loan, who returned to Vietnam after attending the 18th APRCE (Asia-Pacific Retailers Convention & Exhibition), said she is worried about Vietnam’s retail industry.
“We have been admiring the strong development of Singapore. The other countries in South East Asia including Malaysia, Thailand and the Philippines have been developing rapidly in the retail industry,” she said.
“Vietnam is taking small steps forward in the development path. But other regional countries are running,” Loan said.
Experts have also voiced concern about the appearance of giant foreign retailers in the Vietnamese market.
From Japan, the Aeon Mall, Family Mart, Ministop, Takashimaya and 7-Eleven have come to Vietnam with ambitious plans to open many retail points in the promising market.
In late 2017, Aeon Mall announced the opening of its fifth shopping center in Ha Dong district with investment capital of US$200 million. The giant is moving ahead with the plan to own 20 shopping malls in Vietnam by 2020.
Coming to Vietnam in June 2017, 7-Eleven has opened 11 shops in HCMC, which was part of its plan to open 100 shops after three years and 1,000 shops after 10 years of operation in Vietnam.
Foreign retailers have been trying all possible ways, including M&As, to enter the Vietnamese retail market.
Aeon, for example, has acquired a 49% stake of Citimart and a 30% stake in Fivimart.
Thai TCC Holdings has taken over Metro Cash & Carry Vietnam and Central Group has taken Big C.
Having opened three more Simply Marts in HCMC, AuchanSuper from France announced it will have 17 more marts in HCMC by the end of 2018 and 20 in northern provinces by 2020.
Theleader.vn quoted its sources as reporting that foreign investors now make up 50% of the modern retail channel in Vietnam.
Nguyen Thai Dung, deputy general director of Big C Thang Long, said that M&As are normal in a market economy, so there is no need to worry too much about the existence of foreign giants. Instead, Vietnamese retailers should be thinking of solutions to expand their market, including in the immediate time.
