Reuters has quoted a source as reporting that GIC, the Singaporean national investment fund, and some Thai investors want to buy 20 percent of shares of the third largest retail chain in Vietnam – Bach Hoa Xanh, which is valued at $1.5-1.7 billion.

The deal is about to be closed, possibly in the first quarter 2024.

Foreign retailers have recently expanded their networks in Vietnam.

On September 22, Shin Dong-bin, president of Lotte, and his elder son Shin Yoo-yeol, CEO of Lotte Chemical, flew to Vietnam to open Lotte Mall West Lake worth $643 million. This is a 23-storey complex comprising a shopping mall, hotel, offices and condotels, covering an area of 7.3 hectares. The total retail area is 82,550 sqm.

This is the place for many global famous brands, including Marks & Spencer, Uniqlo, Zara, Massimo Dutti, Pull & Bear, Fred Perry, Lagerfeld, Maison Margiela, Foot Locker, Rockport, Camper and Marimekk.

In the first half 2023, Central Retail, owned by Thai billionaire Chirathivat, consecutively opened GO!, the shopping mall and hypermarket in Ha Nam and Dong Nai, and launched its own furniture brand Home Come.

Earlier this year, the Thai retailer announced investment of $1.45 billion in Vietnam in the next five years.

As of mid-2023, Central Retail had opened 38 Go! hypermarkets in Vietnam and 39 stores bearing Tops market, Go! and LanChi Mart brands, as well as 52 Nguyen Kim stores, specializing in distributing home appliances, and a high number of food stores.

Central Retail plans to become the No 1 omni-channel retailer in the food industry, and No2 in the real estate sector – shopping center.

Also in the first half 2023, Uniqlo from Japan opened four more stores in Vietnam, while its fellow-countryman Muji opened more shops in HCM City and Hanoi.

Aeon, another Japanese retailer, has just inaugurated Aeon Binh Duong New City in Binh Duong, and it plans to open up 2-3 more hypermarkets (with the average area of 5,000 sqm) in Vietnam this year.

Meanwhile, Vietnamese retailers have also geared up to open more shopping centers throughout the country.

WinCommerce owned by billionaire Nguyen Dang Quang opened 150 more Winmart+ (convenience stores) and 2 Winmart (supermarkets) in the first six months 2023, raising its total retail points to 3,500. This is the largest retail chain in terms of sale points.

As for Bach Hoa Xanh, more than 1,700 stores with the brand have been opened so far which brought the turnover of VND13.67 trillion (up 7 percent) in the first half 2023. However, it still incurred an accumulated loss of VND8 trillion.

How attractive is the Vietnamese retail market?

Vietnam is believed to be one of the markets in Southeast Asia with the most potential, which now has value of $140 billion, expected to rise to $350 billion by 2025.

However, the scale of modern retail channels is still modest, just accounting for 25 percent of the total retail market size, which is much lower than the 80 percent market share in Singapore and 48 percent in Thailand. Vietnam’s total population is high and its economy is open to most large partners in the world. 

These could be the reasons for investors to continue to inject money into the market. Despite inflation pressure and people’s tightening of their purse strings, the retail market has been growing well. 

According to the General Statistics Office, the total goods and consumer service revenue in the first nine months 2023 surged by 9.7 percent year on year to VND4.57 quadrillion. Revenue from goods retail alone reached VND3.572 trillion, up 8.4 percent.

In the first half 2023, Bach Hoa Xanh (belonging to MWG) and Wincommerce (Masan) reported positive growth rates. WinCommerce earned revenue of VND14.5 trillion in the first two quarters, while Central Retail had VND17 trillion in revenue.

The recovery of Vietnam's retail industry after the Covid-19 pandemic is attributed to good economic performance and the increase in average income. Vietnam’s GDP per capita was $4,110 in 2022.

Manh Ha