Vu Kim Nuong, Communications Director of Auchan Vietnam, confirmed that the retailer has been taking losses over the last five years. It announced its departure even before the final deal about the sale of 18 Auchan supermarkets in Vietnam.

Auchan says goodbye to Vietnamese customers

Arriving in Vietnam in 2015, Auchan, unlike other retail chains, decided to cooperate with large real estate firms to set up supermarkets at apartment blocks developed by the firms.

The French retailer once cherished an ambitious plan worth $500 million on opening 300 supermarkets in Vietnam. However, only 18 have been opened so far, and the regular change of its name, from S.Mart to Simply and then Auchan, did not help make its business prosper.

Dao Xuan Khuong, a retail expert, commented that Auchan’s problem lies in the limited brand identification. Auchan supermarkets are located in buildings and apartment blocks, so they are only known to local residents and people in that areas.

Auchan is just a general supermarket and can only attract consumers nearby, not people from other areas who come for both shopping and relaxing.

There was also a lack of sale promotion campaigns to lure customers.

The marketing strategy of Auchan was questionable. Tran Minh Duc, wrote on Nhip Cau Dau Tu’s fanpage that he only realized the presence of Auchan in Vietnam when newspapers reported about its departure, commenting that the retail chain did not pay appropriate attention to ad campaigns.

Vo Van Quang, a branding expert, saw problems in administration.

“The service quality and discipline, and supply source management are weak points of the chain,” he said.

He also thinks that Auchan had a late arrival in Vietnam, when the general supermarket market segment was full.

Auchan had to struggle with Co-op Mart, Big C and Lotte, which are all big players, and it could not show its advantages over the three rivals.

“As a result, the French retail brand was overshadowed by the South Korean trend with Lotte Mart and others, and the Japanese wave with both Aeon and Family Mart, which are conquering markets throughout Asia,” he commented.

Analysts agreed that retailers from Europe will not come to Vietnam in the immediate time to open general supermarkets, because the market segment has become full, with fierce competition.

However, in branded goods distribution, European and American brands will continue to hold advantages.

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French supermarket group Auchan Retail’s plans to sell its loss-making business in Vietnam are already drawing interest from potential buyers, Reuters reported.  

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Kim Chi