Figures show how foreign retailers are conquering Vietnam's market
Thai, Japanese, American and French retail giants are speeding up their plans to conquer the Vietnamese market.
The retailers are attracted by the high population (91 million), increasingly high income per capita ($1,890 in 2015), the "golden" population (60 percent are young consumers) and rapid urbanization.
The number of middle-class income earners has also been increasing rapidly. A report from the Hong Kong and Shanghai Banking Corporation (HSBC) showed that the figure would double in the next 10 years, from 12 million to 33 million.
Regarding the potential of the retail market, the market was worth $102 million in 2015 and the growth rate was stable at 7.3 percent in 2010-2015. Modern retail channels now make up 25 percent of total retail turnover, increasing by 12 percent in 2010-2015.
Vietnam plans to have 1,200-1,500 supermarkets, 180 trade centers and 157 shopping malls. It is expected that the retail growth rate would be 11.9 percent in 2016-2020 with the market value of $179 billion by 2020, of which modern retailing would account for 45 percent.
The figures show that Vietnam is an attractive market for retailers and explain why giants like Lotte from South Korea and Aeon from Japan have flocked to Vietnam to compete with domestic retailers such as Sai Gon Co-op, Vingroup and Hapro.
Among the foreign giants, Central Group from Thailand is one of the best known names to Vietnamese. It has taken over Big C Vietnam in a deal worth 1 billion euros ($1.14 billion). TCC was the one who took over 19 Metro supermarkets in 2015.
South Korea, which came to Vietnam later than others, has announced it will have 60 supermarkets in Vietnam by 2020, while Japanese Aeon said it will open 20 shopping centers.
Meanwhile, Walmart from the US and Auchan from France are seeking suppliers to implement their plan to develop the Vietnamese market in anticipation of the Trans Pacific Partnership Agreement (TPP).
With a plan to invest $500 million in Vietnam to build a network of supermarkets in Vietnam in the next 10 years, Auchan has signed a contract with Sacomreal on leasing all the retail premises at Charmington La Pointe in district 10, Sacomreal Plaza in Binh Thanh and Sacomreal Plaza 2 in Tan Binh. Each Auchan supermarket would provide 1,000-4,500 products.
As for Vietnamese retailers, Vingroup, with powerful financial capability, has been implementing the most ambitious expansion plan. The group has more than 700 Vinmart and Vinmart+ shops.