Retail market more attractive to investors


HANOI: Vietnam’s retail market is emerging as a magnet for investors, thanks to favorable conditions such as political stability, transparent capital controls and a large market size.

AEON, Lotte, Circle K and K-Mart, to name a few, are among the large retailers that have recently expanded their retail chains in the country.

At the end of November, Motoya Okada, chairman of AEON, revealed that the company sees Vietnam as a market no less important than its main Japanese market. The company should therefore soon double the number of its shopping centers in the country.

In May, Masan Corp and a group of investors, including Alibaba and Baring Private Equity Asia, reached a deal to buy newly issued shares of The CrownX valued at up to $ 400 million ($ 1.68 billion of RM).

Previously, SK Group also spent over US $ 410 million (RM 1.72 billion) to acquire a 16.26% stake in VinCommerce, a company that runs Masan Corp’s WinMart retail chain.

Although a few foreign retailers did not follow suit and exited the market, many domestic retailers have managed to capitalize on their pull-out, quickly implementing mergers and acquisitions to fill the void and gain market share.

Domestic brands such as Vingroup, Masan and MWG still remain dominant in the market despite the growing participation of foreign players.

Globally, modern retail accounts for 26% of the market share, growing 12% annually, while traditional retail, consisting of grocery stores and outdoor markets, accounts for the lion’s share (74 %) with a growth of 1% per year.

During the pandemic, the retail market greatly contributed to the continuity of supply chains.

Notably, retailers kept essential commodities flowing uninterrupted and kept prices stable even though strict lockdowns were put in place.

Nguyen Anh Duc, chief executive of Saigon Co.op, noted that amid the pandemic, many traditional outdoor markets were closed. The Co.op Mart distribution chains therefore had to do everything in their power to take over, maintain the supply of goods and keep prices stable.

“Retail chains have made it possible to supply enough goods to meet people’s demand,” said Pham Thu Huong, a consumer in Hanoi.

As Vietnamese products are over-represented (90%) in supermarkets, production and distribution companies pay more attention to these products.

They aim to provide Vietnam-made products with higher quality and greater variety in order to improve their competitiveness, retain customers and maintain a sustainable supply chain of domestic products.

A strong supply chain of Vietnamese products would require strong links between regions and local specializations in product development, as well as better guidance from the authorities, said Nguyen Anh Duc.

In order to create more favorable conditions for the development of the internal market, the Prime Minister published Decision No. 1163 / QD-TTG on the Strategy for the Development of Internal Trade by 2030 with a vision towards 2045.

The decision was aimed at developing internal trade; promote Vietnamese brands; safeguarding the economy, national businesses and consumers; and the creation of a basis for further economic integration. – Viet Nam News / ANN


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