VietNamNet Bridge - With the CPTPP, which removes all market access barriers in the retail sector, Vietnam expects to see an influx of foreign retailers.

Vietnam expects to see an influx of foreign retailers

The domestic retail market is ranked sixth in the world in A.T. Kearney’s retail development index.  More foreign groups are taking steps to join the market, while existing retailers have been expanding their networks.

Muji, the Japanese retailer, last week announced the establishment of Muji Vietnam Co Ltd, with a head office in HCMC. The first shop is expected to open by 2020. The retail chain now runs 928 shops in many markets, including 454 in Japan.

In late 2018, another Japanese group, Sumitomo, brought FujiMart to Vietnam. With the cooperation of Vietnam’s BRG Group, Sumitomo opened the first FujiMart in Hanoi.

As for Aeon, Masaki Suzuki, at a meeting with Vietnamese Deputy PM Vuong Dinh Hue on February 25, said the Japanese company considers Vietnam a key investment market in Southeast Asia. He said Aeon would invest $5 billion to develop 30 large shopping malls in Vietnam which would generate 50,000 jobs.

In mid-December 2018, Central Group from Thailand, the owner of Big C Vietnam, opened GO! My Tho, a shopping mall in Tien Giang province. The conglomerate has stated it would pour another $500 million to open 500 retail points in Vietnam in the next five years.

Speaking at a workshop on the future of Vietnam’s retail industry in HCMC in late February, Rebecca Pearson, deputy director of CBRE Asia, said Vietnam is one of the most attractive markets in the world.

Vietnam’s GDP growth rate has been stable at over 6 percent in the last 10 years, the highest growth rate among ASEAN countries. Vietnam’s total retail revenue is expected to obtain a growth rate of 11.9 percent by 2020, nearly three times higher than the country in the next position in Southeast Asia. 

In 2018, Vietnam ranked second in the world in the consumer confidence index as the retail industry witnessed strong development.

According to Dinh Thi My Loan, chair of the Vietnam Retail Association, the industry has witnessed stable two-digit growth rates, 1.5-2 times higher than GDP growth rates.

In modern retailing, chain-based business and expansion are inevitable. To exist and develop in an environment with cutthroat competition, retailers all have to build large networks with branches reaching provinces and cities. 

Vingroup now owns the largest retail network in Vietnam, with 100 VinMart supermarkets and 1,700 Vinmart+ convenience stores.

The Gioi Di Dong ranks second in the number of Bach Hoa Xanh sale points. The current number of 430 shops would rise to 500 later this year.

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