Aeon has been present in Vietnam for 10 years

Aeon has officially announced the cancellation of cooperation with Fivimart, a retail chain owned by Nhat Nam JSC, commencing from August 29, because of differences in the two companies’ strategic visions.

The Japanese retail chain bought 30 percent of Fivimart shares in 2015, hoping that the cooperation deal would help Aeon develop rapidly in the 90 million consumer market.

However, Fivimart has been taking losses in the last three consecutive years. In 2016, it incurred a loss of VND96 billion with the sales cost even higher than the gross profit. It took a loss of VND60 billion in 2015 and VND23 billion in 2017.

By the end of 2017, the accumulative loss incurred by Fivimart had reached VND200 billion and payable debts VND823 billion.

Aeon declined to reveal who bought 30 percent of Fivimart shares. But sources said it was a large Vietnamese corporation which is also owning a fast-growing retail chain.

Aeon now holds 49 percent of shares in Citimart. However, Citimart’s business performance is also unsatisfactory. The retailer reported a loss of VND91 billion in 2015 and VND33 billion in 2016. Its accumulative loss had climbed to VND157 billion by the end of 2016.

Analysts found that while Aeon has been successful its own distribution network, it cannot reap fruit from cooperation projects.

Aeon’s four supermarkets in 2016 had VND3.883 trillion IN PROFIT???, or three times higher than 2014, and the pre-tax profit was VND54 billion. 

The revenue increased by 30 percent in 2017 to VND5.136 trillion and the pre-tax profit of that year was VND234 billion, or four times higher than the year before.

Analysts say that Aeon has been following a persistent strategy since it came to Vietnam. Both developing its own supermarkets and joining forces with Vietnamese retailers, it has two goals – developing rapidly in Vietnam and increasing Vietnamese consumers’ awareness of the Japanese brand.

Besides Fivimart and Citimart, Aeon also once cooperated with Trung Nguyen to run G7-Ministop which was established in 2011. 

At a press conference held in 2011, reporters were informed that a joint venture would be set up between Trung Nguyen and Aeon in which the former would hold 75 percent of the initial capital of $10 million, and that the joint venture hoped to have 500 shops within five years.

However, the joint venture failed as the two parties could not find a common voice.
Because of the differences in business thinking, Aeon still cannot find good partners in Vietnam. 

US$1=VND22,000

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