Big multinational retail chains not always successful in VN

Once putting high hopes on the Vietnamese retail market, described as very promising with 90 million consumers, many retailers have had to leave the country.

Auchan Retail, the French supermarket chain, has announced a decision to sell 18 supermarkets in Vietnam. The market brought revenue of 45 million euros, or $50.4 million last year, and it has been incurring a loss.

Big multinational retail chains not always successful in VN

Auchan entered Vietnam in 2015 and now has 18 supermarkets in Hanoi, HCMC and Tay Ninh province. In its 2018 annual finance report, Vietnam was mentioned as one of the two markets which still could not bring a profit.

The leading retail chain in France said it still could not find a suitable business model for the market and has been incurring losses here.

A representative of Auchan has confirmed Auchan is negotiating with retailers in Vietnam on the sale of the 18 supermarkets. Once the sale is completed, it will officially leave.

Once putting high hopes on the Vietnamese retail market, described as very promising with 90 million consumers, many retailers have had to leave the country.

Prior to that, Parkson announced the closure of one of the last Parkson stores in Vietnam. Belonging to Parkson Holdings Berhard (PHB), a subsidiary of Lion group, Parkson joined the Vietnamese market early in 2005, and became one of the first retail premises developers.

In the first years in Vietnam, the Malaysian retailer saw great potential here and drew up a very ambitious plan on expanding its business. However, it step by step lost the race for market share.

Since 2014, Parkson has stopped pouring money into its network in Vietnam. In the next years, it shut down department stores because of unsatisfactory business results. 

 

Parkson’s report shows that its business in Vietnam was the worst among its Southeast Asian markets. The Malaysian retailer commented that the Vietnamese retail market is still challenging as more and more shopping malls appear.

Five years ago, Metro Cash & Carry, which was considered the biggest modern wholesale supermarket chains, was transferred to Thai TCC Group after many years of taking losses

Metro joined the Vietnamese market in 2002, when Vietnamese began getting used to the model. However, it had to leave after it developed 19 shopping centers in 14 cities/provinces, five transit storehouses, and employed 3,600 workers.

While the revenue was on the rise, the reported profit was poor. A report from the taxation agency released in 2013 showed that Metro Cash & Carry topped the list of unprofitable foreign-invested enterprises.

During the 12 years of operation in Vietnam, 2010 was the only year Metro Cash & Carry reported profit, VND116 billion. Meanwhile, it reported losses for the remaining years, from VND89 billion to VND160 billion.

RELATED NEWS

Billions of dollars being poured into VN’s fast-growing retail market

Who is the most profitable retailer?

Thanh Lich

 
 

Other News

.
Struggles forecast on ending earnings season, rally lock-in
Struggles forecast on ending earnings season, rally lock-in
BUSINESSicon  19/10/2020 

The market will struggle in the coming days as the third-quarter earnings season is near its end and investors will try to realise their profits following recent rallies.

Investors see agricultural processing sector as ripe for plucking
Investors see agricultural processing sector as ripe for plucking
BUSINESSicon  19/10/2020 

On September 27 construction of a US$66 million hi-tech agricultural complex began in the Central Highlands province of Dak Lak.

Russian locality hopes to boost trade ties with Vietnam
Russian locality hopes to boost trade ties with Vietnam
BUSINESSicon  19/10/2020 

The Udmurtia Republic, a federal subject of Russia, is planning a webinar on November 17 to promote its export and investment potential to Vietnamese businesses and agencies.

Boeing to bring more technologies to local airlines
Boeing to bring more technologies to local airlines
BUSINESSicon  18/10/2020 

To cope with the COVID-19 pandemic, Boeing has sped up its ecoDemonstrator programme to support its partner airlines, including those in Vietnam.

VN has been active as foreign companies plan investment relocation
VN has been active as foreign companies plan investment relocation
BUSINESSicon  18/10/2020 

Vietnam has been seen as an ideal destination for foreign companies looking for elsewhere to relocate production channels in a bid to diversify their supply chains in the post-Coronavirus pandemic.

Exploitable security plagues digitalisation
Exploitable security plagues digitalisation
BUSINESSicon  19/10/2020 

Disruptive technologies spur the evolution in the financial landscape, with comprehensive applications providing convenient access to customers’ banking needs.

New FTAs puts logistics in limelight
New FTAs puts logistics in limelight
BUSINESSicon  19/10/2020 

New-generation free trade agreements are increasing the importance of domestic logistics groups, with Vietnam emerging as a safe yet high-return market for overseas parties pouring money into new developments.

MoIT helps enterprises deal with increasing trade remedy cases
MoIT helps enterprises deal with increasing trade remedy cases
BUSINESSicon  17/10/2020 

Vietnam’s export goods face more trade remedies in the process of deep economic integration, so the Ministry of Industry and Trade has developed solutions for the situation.

ASEAN pushes forward with 5G connectivty cooperation
ASEAN pushes forward with 5G connectivty cooperation
BUSINESSicon  17/10/2020 

As ASEAN chair this year, Vietnam is playing a crucial role in further cementing joint activities within the bloc via boosting the application of high technologies to adapt to Industry 4.0, which is sweeping throughout the region.

Macadamia nuts ripe for billion-dollar expansion
Macadamia nuts ripe for billion-dollar expansion
BUSINESSicon  19/10/2020 

Vietnam wants to earn around $1 billion from growing macadamia by 2030, and although some plantations have achieved partnerships with domestic buyers, 

Real estate stocks await cash flow
Real estate stocks await cash flow
BUSINESSicon  17/10/2020 

Domestic and foreign capital flow is expected to bolster real estate shares after the COVID-19 pandemic as many investors are paying attention to the industry.

Online exports require professionalism
Online exports require professionalism
BUSINESSicon  17/10/2020 

Using online platforms to boost exports is the fastest way to bring Vietnamese goods to the world, said business leaders and industry experts.

Vietnam to become the 4th largest economy in Southeast Asia: IMF
Vietnam to become the 4th largest economy in Southeast Asia: IMF
BUSINESSicon  17/10/2020 

Vietnam's GDP is estimated to reach US$340.6 billion this year, making it the fourth-largest economy in Southeast Asia.

Long Thanh Airport: investment rate high, ACV may lack money
Long Thanh Airport: investment rate high, ACV may lack money
BUSINESSicon  19/10/2020 

The Ministry of Finance (MOF) has warned about problems with the Long Thanh International Airport project, citing capital arrangement capability.

The dark future of hotels on 'golden land' in Hanoi
The dark future of hotels on 'golden land' in Hanoi
BUSINESSicon  18/10/2020 

A series of hotels have had to cancel their opening plans this year because of Covid-19. Many hotels have been put up for sale because of poor patronage.

Special day for two billionaires: mountains of money pouring in
Special day for two billionaires: mountains of money pouring in
BUSINESSicon  18/10/2020 

Techcombank share prices have soared, while the Hoa Phat Group of the billionaire Tran Dinh Long has reported a record 30-year profit. The prosperity of these enterprises has helped their owners earn more money despite Covid-19.

Many hoteliers intend to divest capital due to heavy losses
Many hoteliers intend to divest capital due to heavy losses
BUSINESSicon  16/10/2020 

Over the past eight months, hotel room tariffs have plunged and hotel room occupancy rates have remained low, forcing several hoteliers to divest capital with many financially weak hotels in the local market being put up for sale.

Meeting expectations of the corporate bond market
Meeting expectations of the corporate bond market
BUSINESSicon  16/10/2020 

A new government decree tightens conditions on the issuance of corporate bonds. However, before the decree came into effect, enterprises flooded the market with new issuances.

M&A activities signal promising fortunes
M&A activities signal promising fortunes
BUSINESSicon  17/10/2020 

Although merger and acquisition levels dropped in 2020 across Vietnam, the prospect for such activities remain bright for next year as overseas investors look to local businesses in order to improve market access.

Thai billionaire, European brewer lose money in Sabeco investment deal
Thai billionaire, European brewer lose money in Sabeco investment deal
BUSINESSicon  16/10/2020 

The Sabeco price has seen a strong recovery in the last half a year, but is still at a low price. Both Thai billionaire and the big brewer Heineken have lost money because of the drop in Sabeco share price.

 
 
 
Leave your comment on an article

OR QUICK LOGIN