Retail revenue up in Vietnam

Vietnam is witnessing a change in lifestyles – and thus retail spending patterns. 

The country has 636 supermarkets, 120 commerce centers and more than 1000 organised convenience stores, far below what one would expect from a market with some 90 million consumers and thus representing a strong prospect for both domestic and foreign investors.

A report by AT Kearney titled “Vietnam Retail Market Forecast to 2014″ comments on the growth potential in the Vietnamese retail market for domestic as well as foreign investors. Retail total revenue rose 29.3 per cent in 2011. The report predicts a 23 per cent annual increase in the country’s total retail revenue toward 2014.

The emergence of a modern retail market plays a big role in this prevailing revenue growth. 

Retail’s percentage of the gross domestic product (GDP) was 15 – 16 per cent in 2011 and the Ministry of Industry and Trade (MoIT) sees this as a significant sign of economic growth.

The AT Kearney report sees this modernisation of retail structure as a key cause of the upward trend in revenue. Also, it says that the coming years will see an even deeper penetration in the market by foreign retailers.

The opening of Vietnam to 100 per cent foreign-owned retailers in 2009 has spurred the construction of modern retail outlets and further expansion of distribution networks in rural regions. The foreign investors have responded to the market access with heavy investments to gain market shares.

The following companies are aiming at a boosting already high levels of activity in the Vietnamese market:

• Metro Cash & Carry: 10 new trade centres since 2011.
• Parkson: seven new shopping centres nationwide.
• South Korea’s E-Mart Group: new project this year under a joint venture with U&I Group.
• Japan’s Aeon: $101 million investment in Jusco chain, trade centres and supermarkets.
• Big C: increasing its chain of supermarkets from 17 to 29 by 2013.

MoIT says domestic companies need to respond as foreign investors aim at heavier share in the Vietnamese retail market. Some do: Co-Op Mart, for example, plans to protect its market share by opening six new supermarkets this year, to reach a nationwide number of 57 outlets. The electronic retailer plans to open five new outlets this year, reaching a nationwide total of 12 stores.



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