Despite the fact that the Vietnam’s economy has a slow growth within the past three years, the retail market keeps attracting global and regional players. In addition to Big C and Metro C&C who have been years in Vietnam, there are several others who have tried to strengthen their presence or attempted to penetrate the modern trade sector which is only account for 25% of the whole market at this point in time. Different operators from various segments: shopping malls, grocery retailers and supermarkets, and convenient stores have been working hard to gain new market share. Existing operators such as Parkson, Lotte Mart, Family Mart, and Circle K are competing with newcomers such as Aeon, E-Mart, NTUC Fairprice, and Giant. Major domestic investment groups which have access to properties in good locations or have deep pockets have also penetrated into the retail sector via M&A. Take, for an example, Ocean Retail of Ocean Group was ambitious taking retail market shares but then was acquired by VinMart, a subsidiary of VinGroup, a Vietnamese real estate giant. VinGroup also became a strategic shareholder of Vinatex Group which holds 100% of Vinatex Mart.
2015 is also both challenging and promising milestone for the Vietnamese retail sector. Particularly, according to her WTO’s joining commitments, Vietnam has been fully opened for 100%-foreign-owned retailers since January 2015. Also, the ASEAN Economic Community will be established in 2015 and shall “transform ASEAN into a region with free movement of goods, services, investment, skilled labour, and freer flow of capital.” Needless to say, the Trans-Pacific Partnership Agreement (TPP), a strategic one with 12-country members has been regarded as a means for securing Vietnam’s economic interests vis-à-vis China as Vietnam may be able to compensate for its trade deficit with China through a surplus in trade with TPP members, especially the U.S. It could also have a spill-over effect in the form of deeper cooperation in areas such as intellectual property, services and investments. One effect from TPP, if it is going to be real from this year or next, would be approximately 10,000 goods will be tax-exempted from and among country members. We bet that together with other free trade agreements, TPP itself will provide a short-term challenge but a long-run profound for under-developed countries like Vietnam to address. Such economic integration will challenge Vietnam’s domestic goods and services but, on the other hand, pressure Vietnamese manufacturers and services firms to work harder and smarter in order to enhance their competitiveness.
Normally, a retail sector would go through several phases of development: small grocery stores, wet and flea markets, supermarkets, hypermarkets, shopping malls, department stores, convenient stores, E-Commerce, and m-commerce. This would be the case of retail sectors in many economies. However, for Vietnam, one can find most, if not all, physical presents of retail sector at a time, growing together and surviving the competition. In Ho Chi Minh City, one can go to buy a cigarette box at a small grocery store in Tran Hung Dao Street and drives his wife to pick up a perfume at a Vincom mall when she just needs to cross out one or two blocks to meet her friends busy shopping for clothing at a department store in Dong Khoi Street. His maid might go to a nearby supermarket Co.op for some foods while his son steps into a convenient store Family Mart for an ice cream or snack. He could eventually order some stuffs via local E-commerce website chodientu.vn and purchase something else using his mobile phone to pay via an application MobiVi. Vietnam does not move step by step in retail development path. Instead, one could see Vietnam’s retail’s progress impressive and chaotic.
Vietnam was ranked as one of the top emerging markets for retail in 2008-2009 but since then its rankings have continued to fall as the Vietnamese economy has not performed as well and stably as others. There are several reasons for that pull-back but it cannot be denied that the potential is great and is still there. Increasing demand of consumer goods and rising disposable incomes will be driving potential growth in a 90-million-population economy. Also, rising urbanization and expanding rural retail area promoted by improved infrastructure will be facilitating such growth. Within the past few years, market players have been increasing their presence in Vietnam. The number of modern stores, supermarkets, and shopping malls has increased tremendously. So has the number of foreign brands been penetrating into the market. Market volume is estimated at US$ 123.8 billion by end of 2013 and we would see an amazing annual increase of about 12% compared with last year.
This comprehensive dataset includes a full suite of up to more than 70 figures and tables containing about 600 key metrics and indicators that feature our deep interaction with more than 60 companies in the Vietnamese retail industry. We are confident that our endless efforts and selective study methods have made the research and report reliable and helpful. At such, policy makers, local and foreign retailers, suppliers, and any stakeholders of the retail industry could find great implications for their future directions and actions.
This report contains not only relevant macro economic conditions but also industry-wide details are addressed in this version, it also contains valuable updates including:
- A revision on market environment till date with insights.
- A newly-rewritten part on industry analysis, investment considerations, market entry strategies.
- Interesting and latest forecasts up to 2018.
- M&A scenarios and transcations.
- Complete profiles of existing retailers.
- A rewritten industry forward looking.