Vietnam is the fastest growing convenience store market in Asia

Vietnam is the fastest-growing convenience store market in Asia, according to IGD (Institute of Grocery Distribution).

There are 800 supermarkets, shopping centers, 150 shopping malls, 9,000 markets and 2.2 million household-run stalls.

A report from A.T. Kearney says that convenience store and minimarts are the fastest growing segment of the Vietnamese retail market. Family Mart has 100 shops and plans to have 800 by 2020. Japanese owned 7-Eleven plans to open 100 shops within 3 years and 1,000 shops within 10 years.

As for Vietnamese Vinmart+, it had 1,000 shops by the end of 2016 and 2,500 shops by the end of last year. 200 supermarkets and 4,000 convenience stores are targets set by VinMart and Vinmart+ for 2020.

Meanwhile, according to Nielsen, the growth rate of the modern retail channel between April 2016 to December 2017 was 7.7 percent, higher than the 6.1 percent growth rate of traditional retail channels.

The Bangkok Post cited a report from IGD predicting that the CAGR of the convenience store would be at two-digit levels in in some South East Asian countries, including Vietnam (37.4 percent), the Philippines (24.2 percent) and Indonesia (15.8 percent).

Nick Miles of IGD said that retail markets are shifting from traditional to modern modes, encouraged by positive economic prospects, increased GDP per capita, new open policies and changed shopping habits of local consumers.

However, though the fastest growing segment, convenience stores and minimarts are facing challenges. They have to compete with large supermarkets and traditional markets.

In fact, the modern retail channel’s growth has slowed down, with turnover accounting for 25 percent of total retail turnover, according to MOIT. High rent for retail premises, leading to high selling prices and the Vietnamese habit of shopping at traditional markets are the major reasons. 

In 2017, Vietnam returned to the sixth position on the list of the world’s 30 most attractive retail markets. 

It is witnessing the strong rise of convenience stores and minimarts. The number of groceries has decreased from 62 percent to 52 percent. By 2017, the number of convenience stores had reached 2,500, according to Nielsen.

IGD commented that most Asian convenience store markets are dominated by Japanese retailers. However, in Vietnam, the market is led by local chain Vinmart.

Vinmart and Vinmart+ are listed in 2017 Vietnam Report of the top 10 most prestigious retailers.

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Kim Chi