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AI, Big Data help businesses target neighborhood markets

Big Data and artificial intelligence (AI) are now considered the ‘trump cards’ in business competition.

New needs 

A convenience store of a well-known retail brand on Dien Bien Phu street is located in Binh Thanh district, HCM City. The average income of residents in the area with radius of 500 meters is VND7-10 million a month. The convenience store serves 15 percent of consumers with these incomes. However, the approach to the clients with higher incomes remains modest.

Binh Thanh is a district which has many convenience stores bearing different brands, so the competition is stiff. What the retail chains need to do is occupy locations where the purchasing power is good around Dien Bien Phu street.

The manager of the retail chain said with thousands of sale points and nearly 1,000 sale points opening each year he cannot make decisions on where to open new stores based on just his feelings. He needs support from high technology.

Part of the technological know-how is a map showing potential customers, demands and shopping behaviors. 

With Big Data and AI, the Vietnamese market is divided into 100m x 100m squares.  The system calculates local people’s income, purchasing power and designs products that should be sold in each square. There are about 33 million squares of this type with tens of criteria updated and analyzed to help retailers made reasonable decisions.

This map helps retail chains to arrange “chessmen on the chessboard” in a reasonable way and approach clients they target. 

With a ‘handshake’ worth $65 million with the Masan Group, Nguyen An Nguyen, CEO of Trusting Social, hopes that in the second half of 2022, the success ratio in opening convenience store will rise from 60 percent currently to 90 percent or higher thanks to the application of the AI retail map.

The CEO of Masan Consumer said that when developing networks, retail chains need to expand retail stores quickly and effectively. And technology will help make the right decisions.

Ta Quang Huy, CEO of Hanwha Techwin Vietnam at a recent workshop related the story about a cosmetics chain which gains success thanks to the use of an AI camera system.

The cameras helped find out who bought products at ‘A’ stall, how old the buyers were and what the differences between the clients of ‘A’ and ‘B’ stalls were. Therefore, the cosmetics chain rearranged their stalls to fit specific groups of clients and changed the decorations to fit shopping behaviors of each group of clients. 

And the chain has succeeded. It is now present in four largest cities of Vietnam, including HCM City, Da Nang, Hanoi and Hai Phong.

Digitizing multi-billion-dollar ecosystems

In 2014, VNG was valued at $1 billion by World Startup Report and became the first unicorn startup in Vietnam. Though the company was established as a game franchising company, VNG today is known best for its Zalo messaging app and the other investments in e-commerce, games and payment platforms.

The companies like VNG, Grab and SEA (the holding company of Shopee) and One Mount Group are ecosystem players. 

In Vietnam, there are more and more industries which converge to create new, broader and more dynamic links to form digital ecosystems - a set of interconnected services for customers, provide an integrated experience.

There are many ecosystems co-existing in the fields of retail, communications, telecommunications, finance and transport services. The ecosystems have been expanding rapidly with millions of users connected on many different platforms.

According to McKinsey, there would be 12 large ecosystems across retail and institutional services in Vietnam by 2025 with the total revenue of $100 billion.

Masan Group is digitizing all its platforms, from production, retail, supply chain to finance services and using Big Data, AI and machine learning throughout the platforms.  It hopes that the ‘Consumer of Things’ plan will help the group cut down 10 percent of operation cost, while consumers would buy essentials at the prices lower by 5-10 percent.

Masan Group’s chair Nguyen Dang Quang said AI will be the driving force for transformation.

“AI and Machine Learning are the only way to satisfy consumers’ needs through both offline and online platforms,” Quang said.

Tran Chung


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