VinCommerce, which runs VinMart and VinMart+ chains, has sent letters to landlords that provide premises, asking to reduce the rent by 50 percent.

VinCommerce said Covid-19 has led to a sharp fall in revenue of VinMart and VinMart+ chains.

VinCommerce runs 3,000 VinMart and VinMart+ sale points throughout the country. They are still open because they provide necessities.

Prior to that, The Gioi Di Dong (Mobile World) JSC also asked its partners to slash the premises rent by 50 percent for one year.

Their network expansion strategy in normal conditions offers great advantages to retailers, but it has put a burden on them during the Covid-19 crisis.

However, unlike VinCommerce, The Gioi Di Dong’s shops bearing The Gioi Di Dong and Dien May Xanh brands had to close temporarily during the social distancing campaign because the shops provide home appliances and hi-tech products, not essential goods.

The Gioi Di Dong is also one of the biggest domestic retailers with nearly 3,100 operational shops with the brands of The Gioi Di Dong, Dien May Xanh and Bach Hoa Xanh.

Nguyen Duc Tai, the co-founder of The Gioi Di Dong, once compared his business as a ‘clouded leopard’ with ‘classic sprints’. He proved that with the moves of expanding his networks rapidly, he can be dominant in the market over his rivals.

The strategy followed by Tai allowed The Gioi Di Dong to increase its presence in the market, increase revenue, maintain growth, and dominate the market.

To obtain average annual growth rate of 50 percent per annum, The Gioi Di Dong showed off its strength to rivals by surrounding them with a large number of stores.

From the end of 2018 to now, more than 1,000 stores have opened.

Having dominated the mobile phone retail market for more than one decade, The Gioi Di Dong has become a giant in its field thanks to rapidly developing the network.

However, a large network now turns out to be a burden for retailers at this time. Thoi Bao Kinh Te Sai Gon commented that while demand has decreased sharply during Covid-19 as people have tightened their purse strings, retailers still have to spend a lot for their high number of retail premises.

The General Statistics Office (GSO) reported that the retail sales of goods and services in Vietnam $214 billion in 2019, representing a rise of 11.8 percent over the previous year.

Chi Mai 

HCM City: Retail premises rent declines as beer shops shut down

Businesses now have bigger choices for retail premises as the rent has decreased significantly.

Vietnamese businesses led retailers’ game in 2019

Many M&A deals in the retail market were made in 2019, but unlike previous years, Vietnamese groups ‘conducted the choir’.