Coinciding with Vietnam's increasingly liberal business outlook and consumer fervor for diversifying retail choices, Asian companies see a bright future for their stores in Vietnam.
Asian retailers are eyeing Vietnam for new opportunities as the country loosens restrictions on foreign businesses, as reported by Nikkei Asian Review.
A year ago, GS Retails, the operator of one of South Korea's most well-known convenience store chains, GS25, announced plans to target Vietnam for their first foray outside of their home country. Now, the group expects to open 50 stores in the country by the end of this year and aims to have 2,500 branches in a decade.
Similar momentum can be observed amongst larger conglomerates such as the Korean Lotte, E-Mart and Japanese Seven & i Holdings (operators of 7-Eleven). Lotte's executives are planning to increase its portfolio in Vietnam to 87 from its current collection of 17 locations, alongside a move into Vietnam's competitive online retail market. Meanwhile, 7-Eleven harbors ambitions to open 1,000 stores by 2027, according to Inside Retail Asia.
This comes on the heels of rapid growth in annual retail sales in Vietnam. Total retail sales were worth US$129 billion in 2017 alone, which represents an 11.05% increase from 2016. Convenience shops in Vietnam have quadrupled in the last six years according to a report released by Nielsen, with Saigon containing 1,800 stores alone.
The success of the corporate corner shops is attributed to increasing purchasing power and changing shopping habits in local consumers that favors comfort, convenience, and variety. The new stores are entering a scene dominated by mom-and-pop shops that place emphasis on vendors' relationship with customers. They account for 78.5% of the market in 2017.
Another factor that has pushed the success of the small-scale stores can be traced back to 2016 when Vietnam relaxed barriers for stores under 500 square meters. It is expected that once the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which was signed in March in Chile, is ratified, these firms will be able to expand without needs for further government inspections.
[Photo via Asia Travel Book]
