China eyes Vietnam's hundred-billion dollar retail market
Miniso has been mentioned repeatedly in local newspapers. The retailer has announced its official presence in Vietnam through a franchise contract signed with Le Bao Minh Group.
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In April, Alibaba, China's biggest e-commerce group, spent $1 billion to obtain the right to control Lazada, a well-known e-commerce website.
Alibaba has shown strong determination to expand its business in SE Asia.
Analysts commented that with the investment from Alibaba, Lazada Vietnam would have more opportunities to develop because it would be able to spend more money on advert campaigns and increase goods supply from China.
According to the US Securities And Exchange Commission, Alibaba has outstripped Walmart to become the world’s largest retailer. Its online transaction value accounts for 10% of retail transactions in China.
While foreign retailers flock to Vietnam, Vietnamese retailers are not yet ready for competition. Some retail chains have been either shut down or sold to foreign partners. There are only several Vietnamese brands still existing, such as Vinmart, Co-op Food and Satra Foods.
Meanwhile, Vietnamese e-commerce firms, though having been operational for 10 years, still cannot hold the upper hand over Lazada.
According to Vu Vinh Phu, chair of the Hanoi Supermarket Association, the Vietnamese consumer market is attractive to foreign retailers, as retail turnover was US$100 billion last year.
Vietnam has a large population (over 91 million people), of which 60 percent are young consumers, per capita income at US$1,890 in 2015, fast pace of urbanization, and growing middle class.
Phu noted that retailers now pay special attention to the rural market which is large and unexploited. Online sales have become a growing tendency, which gives goods suppliers opportunities to approach consumers more easily.
Chinese goods have been mostly penetrating the Vietnamese market across border gates. However, they now have to compete fiercely with Thai and Japanese goods.
Le Phung Hao, chair of the Vietnam Marketing Association, anticipated that more Chinese goods would be brought to Vietnam thanks to the presence of retail groups from China.
Instead of dealing with low-quality and smuggled goods flown from remote areas, Vietnam will have to compete with Chinese goods available at luxury shops in large cities.
