The country is attractive to retailers, with a market of more than 93 million people, relatively young population and an estimated GDP of US$220 billion.
Vietnam has been named on the list by US global management consulting firm A.T. Kearney since 2008. According to the firm’s latest Global Retail Development Index (GRDI), convenience stores and mini-marts are the fastest-growing segment in the country.
Circle K and FamilyMart entered Vietnam in 2009 and are expanding rapidly. FamilyMart now has about 100 stores across the country and plans to have more than 800 stores by 2020.
Japanese retailer 7-Eleven also plans to open its first Vietnamese store in 2018 in a franchise agreement with Seven System Vietnam and a total of 1,000 stores are planned in the next decade. Vinmart opened approximately 1,000 stores last year and is set to increase that number by about 1,500 by the end of this year.
But these stores are under pressure from supermarkets in terms of shopping experience and product diversity and from conventional channels in convenience.
Vietnam has seen a strong rise of modern retailing channels that posted growth of 7.7% from April 2016 to March 2017, compared to 6.1% of traditional channels. Despite that, modern channels only accounted for 25% of total retailing revenue.
Technology has lent a helping hand to modern retailing, making it more convenient by providing new payment tools, improved online shopping experience and multichannel marketing.
The Gioi Di Dong (Mobile World), one of Vietnam’s top 10 retailers in 2017, has spent 13 years developing its own integrated technology-based management system that supports different aspects of administrations, from sales, inventory, financial report, to salary payment, customer database and human resources. It is how the group manages its 1,500 stores and more than 31,000 workers.
But not every retailer is ready to invest in technology, and technological trends often switch before they can catch up, according to Nguyen Thi Tong, Chief of Secretary Group, Association of Vietnam Retailers.