A recent survey of the retail sector in 30 developing countries conducted by consultant company AT Kearney showed Vietnam is one of the most attractive markets in Southeast Asia. The country was also ranked 6th in the global retail index in 2017.
According to statistics of the Ministry of Industry and Trade, retail and service revenues in the country increased by an average 10% per year during 2011-2017 to reach VND3,234 trillion (approximately US$141.5 billion) in 2017.
In the first five months of 2018, total retail revenue was estimated at VND1,752 trillion (US$76.65 billion), up more than 10% year on year.
The presence of foreign retailers in the market is a positive sign, as they will create changes in the retail market and bring more options for consumers. Experts said domestic retailers should change in order to differentiate themselves from foreign counterparts. They should work to make use of the advantage of home ground through bringing into play the particular local culture and products.
Many local retailers have begun to invest in supermarkets and convenience stores in rural areas.
Vingroup is an example, whose chain of VinMart convenience stores has become the largest in the country with 1,500 stores across 30 cities and provinces only after more than two years.
Saigon Co.op has gone a different way, turning traditional groceries in residential areas into modern retail agents bearing the group’s logo Co.op Smile.
Besides big corporation, many small- and medium-sized retailers are also investing in convenience stores. The Tuoi Mart Trading Company in Ho Chi Minh City has joined hands with the trade unions in some companies to open mini-supermarkets in the compound of companies in suburban areas of Ho Chi Minh City and other provinces such as Tay Ninh and Long An, meeting the needs of workers in far-flung areas.
To assist domestic retailers in competing against foreign rivals, the Vietnam Retail Association has proposed to the Government the establishment of a retailing group based on a partnership of the four leading domestic retailers, which are Saigon Co.op, Phu Thai Group, Satra and Hapro. The new group would have total revenue of US$4-5 billion per year.
For the domestic retail market to catch up with the world, experts pointed to the need for support in the form of macro policy. On the part of domestic retailers, they should invest in personnel, management technology, brand building and promotion, and expand retailing forms.