Vietnam set for retail boom

Vietnam’s government has unveiled a fast-track growth plan for the nation’s organised retail sector, with plans for 1500 new retail centres during the next seven years.

The government wants modern shopping centres and supermarkets to take the place of traditional markets, eventually making them the main channel for retail.

While the number of shopping malls, supermarkets and convenience stores in Vietnam is growing rapidly, the majority of local people still purchase food supplies, kitchenware and clothes from markets, ranging from large communal ‘wet market’ facilities to aggregations of vendors selling goods from in front of their homes.

Under the Ministry of Industry and Trade’s plan, retail growth through modern facilities should reach between 26 and 27 per cent annually by as early as 2015 and as high as 30 per cent by 2020.

It predicts the proportion of retail sales via modern channels will reach up to 30 per cent by 2015 and up to 45 per cent by 2020.

The number of supermarkets operating across Vietnam will expand from the current 650-odd to between 1200 and 1300 by 2020.

The government wants 157 shopping centres operating by then, and 180 commercial centres. It plans 40 commercial centres in Ho Chi Minh City and 28 in Hanoi, the capital city, which has a smaller population.

The ministry is stipulating minimum distances between new supermarkets and commercial centres to ensure an even spread of facilities and so there is no over capacity in certain areas.

Details are scant, but the government appears prepared to incentivise supermarket operators to open in areas with lower GDP per capita than the national average.

Several international supermarket operators are taking tentative steps into the Vietnam market, including Hong Kong-based Dairy Farm through its Giant brand and Aeon which will open its first two Jusco supermarkets in HCMC within months.

France’s Casino Group is already well established with its Big C stores, along with South Korea’s Lotte and Germany’s Makro which operates Cash and Carry format stores. They compete with local operators, the largest of which is Co-op Mart.

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