VietNamNet Bridge - As a fast developing retail market in Asia, Vietnam has attracted many foreign retail giants in recent years. However, Vietnamese retailers still control 75 percent of market share.

Vietnam has attracted many foreign retail giants

Big C has 35 supermarkets in many cities and provinces, MM Mega Market has 19 retail centers, and Lotte March 13 supermarkets and hypermarkets, while Aeon, which has just arrived, also has four supermarkets.

Foreign retail brands have also developed convenience stores. In HCMC alone, there are 1,000 convenience stores with Family Mart, B’s Mart, Circle K, Ministop and Shop & Go brands, which are gradually replacing traditional groceries.

The business expansion plans by the foreign brands has caused worries to domestic retailers. Family Mart, for example, stated it will open 1,000 shops by 2020, while 7-Eleven wants to open 1,000 by 2027.

A survey by Savills in HCMC in 2017 showed that 17 percent of consumers preferred going to convenience stores, much higher than the 4 percent in 2015.

Vo Thi Khanh Trang from Savills HCMC noted that the retail density in Vietnam is still low compared with other regional countries, and this is an opportunity for retailers to learn about consumer behaviors and identify the target markets.

Nguyen Huy Hoang from Kantar Worldpanel Vietnam said Vietnam, with stable economic growth, increased income per capita, improved living standards, and a young population, is worth investing in.

More and more foreign investors, with powerful financial capability and experience, have arrived in Vietnam with an ambitious plan to open hundreds of retail points within several years. 

According to Kantar Worldpanel, Vietnamese retail chains account for 75 percent of market share and foreign ones 25 percent. 

However, Vietnamese retailers only have advantages in supermarkets and mini marts. Meanwhile, foreign retailers are dominant in hypermarkets, with 92 percent. 

The convenience store market segment is also controlled by foreign investors with 80 percent of market share.

Diep Dung, chair of Saigon Co-op, one of the largest retail chains, while affirming that his chain is dominant in mini marts and has great advantages in convenience stores, admitted that hypermarkets are the playing field for foreign groups.

He said Saigon Co-op and other Vietnamese retailers cannot jump into the market segment because of limited financial capability.

Dung said that Vietnam is one of the most competitive retail markets with nearly all the biggest retailers in the world present. When foreign retailers enter Vietnam, they are all ‘escorted’ by suppliers, bankers, financiers and law firms. Meanwhile, most Vietnamese retailers ‘go alone’.

However, Vietnamese retailers, who better understand the home market, have been developing well. In FMCG distribution, according to Hoang, Vietnamese retailers hold 73 percent of market share, while foreign ones 27 percent only. 

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