Convenience stores expected to be the next big thing in franchising in VN

After food and beverage and other sectors, it is the turn of convenience stores franchisers to eye the huge Vietnamese market.

Convenience stores expected to be the next big thing in franchising in VN
At a Co.op Food franchisee in HCM City. Viet Nam offers huge opportunities for convenience store franchisers. — Photo courtesy of Saigon Co.op

According to experts, Viet Nam has all the requisite elements for the retail and franchising industry to boom such as a large consumer base, rapidly rising incomes and a generation of young and educated professionals.

Speaking at a seminar on Building an International Franchise Model held in HCM City last week, Yun Ju Young, managing director of GS25 Vietnam, said the country is among the fastest growing retail markets in Asia, with convenience stores recording strong growth in recent years.

The South Korean convenience store chain GS25 has around 14,000 stores in its home market, 80 per cent of which are franchised.

“There is a high convenience store density in Korea. So we have to look for business opportunities in new markets like Viet Nam.”

Viet Nam, with a population of nearly 100 million, has around 2,000 stores, meaning there is still great potential for growth, he said.

Viet Nam also has policies facilitating foreign investment, he said.

In Korea, convenience stores are not allowed to open within 15 metres of another, but in Viet Nam there is no such restriction, he said.

“GS25 estimated the opportunity in the Vietnamese market to be 50 times higher than in South Korea.”

According to analysts, convenience store franchises will be a new profitable business model because costs are lower than in other sectors while management is easier.

Yun said other convenience store chain franchises from Japan, Taiwan and other countries also want to enter the Vietnamese market.

 

In addition to foreign franchisers, Vietnamese retailers have also stepped up their franchising efforts.

Saigon Co.op for instance is franchising its Co.op Food convenience store in HCM City and other cities and provinces and targets opening 100 new stores this year.

Nguyen Phi Van, founder and chairwoman of Retail & Franchise Asia, said Viet Nam is rated highly by the International Franchise Association as a franchise market.

For the next three years it would continue to attract international brands, especially from its region, she said.

However, many franchises did not succeed and pulled out of the Vietnamese market since they ran their business following the traditional model without applying digital technology, she said.

Retail franchises can no longer follow the traditional model, she said.

In advanced countries, they apply artificial intelligence and virtual reality in franchising and are very successful, and businesses in Viet Nam cannot ignore this trend, she said.

Experts said franchisees need to change their mindset because some local businesses still consider franchises as a way to make money quickly by using other people's brands.

This is a completely wrong approach and risks creating a crisis for the franchise systems, they warned. — VNS

Convenience stores expected to be the next big thing in franchising in Vietnam

Convenience stores expected to be the next big thing in franchising in Vietnam

After food and beverage and other sectors, it is the turn of convenience stores franchisers to eye the huge Vietnamese market.

In Vietnam, convenience stores facing target hurdles

In Vietnam, convenience stores facing target hurdles

In contrast to expectations, owners of many foreign convenience stores in Vietnam may not be able to meet their ambitious targets in carving a firm niche in the domestic market, due in part to fierce competition from the biggest players.   

 
 

Other News

.
Vietnam Airlines plans to sell nine planes due to financial woes
Vietnam Airlines plans to sell nine planes due to financial woes
BUSINESSicon  06/08/2020 

Vietnam Airlines is planning to sell nine A321CEO planes to optimize its fleet and improve its cash flow, as the national flag carrier’s revenue has dropped sharply due to the Covid-19 pandemic.

Vietnam – one of the best long-term growth stories in Asia
Vietnam – one of the best long-term growth stories in Asia
BUSINESSicon  07/08/2020 

Vietnam is one of the best long-term growth stories in Asia and is one of the most preferred frontier markets, according to HSBC.

Maximum $130,700 fine for listing violations: Draft decree
Maximum $130,700 fine for listing violations: Draft decree
BUSINESSicon  06/08/2020 

Public companies may receive a penalty of VND2-3 billion ($87,120-$130,700) for falsifying share listing and trading documents under a proposal from the Ministry of Finance.

Singaporean business surges ahead
Singaporean business surges ahead
BUSINESSicon  07/08/2020 

Singaporean business and investment in Vietnam has increased significantly over the decades, thus greatly contributing to strengthening economic bilateral ties.

Furthering developmental ties with dynamic Singapore
Furthering developmental ties with dynamic Singapore
BUSINESSicon  06/08/2020 

Vietnam and Singapore are witnessing their heyday in bilateral and multifaceted cooperation.

Wide impacts to be made with new law changes
Wide impacts to be made with new law changes
BUSINESSicon  06/08/2020 

Effective in 2021, the amended laws on Enterprises, Investment, and Public-Private Partnership are expected to entail breakthrough changes to Vietnam’s business and investment landscape in the coming time, 

Decisive actions to achieve goals
Decisive actions to achieve goals
BUSINESSicon  06/08/2020 

The Ministry of Planning and Investment is currently working on possible scenarios for the upcoming period amid the ongoing developments of the global health crisis.

Millenium to develop $15 billion LNG project in Khanh Hoa
Millenium to develop $15 billion LNG project in Khanh Hoa
BUSINESSicon  06/08/2020 

If the $15 billion LNG project of Millenium Group is approved, it will contribute to making the Nam Van Phong area the largest LNG centre in Southeast Asia.

Rebound likely despite bumpy roads
Rebound likely despite bumpy roads
BUSINESSicon  06/08/2020 

Despite a serious dip in local production caused by the health crisis, Vietnam is expected to be one of the fastest-growing nations worldwide this year, with the economy forecast to stay among the few nations with positive growth.

Unique advantages can pull Vietnam out of uncertainty
Unique advantages can pull Vietnam out of uncertainty
BUSINESSicon  06/08/2020 

In life, economic and health gains are not always equal. This is true for individuals and for countries. While Vietnam has managed to contain the pandemic so far, its economy has been hurt in recent months. 

Hanoi’s Old Quarter businesses bear brunt of COVID-19 impact
Hanoi’s Old Quarter businesses bear brunt of COVID-19 impact
BUSINESSicon  06/08/2020 

The second wave of the COVID-19 epidemic to hit Vietnam has continued to deal a devastating blow to small businesses, travel agencies, and tourist accommodations in the Old Quarter of Hanoi due to the suspension of operations.

Container handling charge increases proposed to attract investment in seaports
Container handling charge increases proposed to attract investment in seaports
BUSINESSicon  06/08/2020 

Container loading and unloading service charges should be increased to approach the regional level so investors would not feel hesitant when pouring money into developing seaports.

Policies encourage automakers to assemble cars in Vietnam
Policies encourage automakers to assemble cars in Vietnam
BUSINESSicon  06/08/2020 

 Several automakers are considering assembling their best-selling models in Viet Nam due to the Government’s policy of zero import tariffs on components and a 50 per cent reduction in registration fees.

Thai firms acquire wind power farm in Ninh Thuan
Thai firms acquire wind power farm in Ninh Thuan
BUSINESSicon  06/08/2020 

Thailand’s Banpu and its power business arm Banpu Power (BPP) have joined forces to acquire El Wind Mui Dinh, an onshore wind farm in the south-central province of Ninh Thuan, in a deal worth $66 million.

EVFTA smooths the way for Vietnamese farm produce
EVFTA smooths the way for Vietnamese farm produce
BUSINESSicon  06/08/2020 

The EU-Vietnam Free Trade Agreement, at its core, aims to liberalise both tariff and non-tariff barriers on key exports of both sides over a period of 10 years.

Mountainous areas and islands need investment
Mountainous areas and islands need investment
BUSINESSicon  07/08/2020 

PhD Doctor Le Quoc Phuong, former deputy director for the Information Centre for Industry and Trade, under the Ministry of Trade, talks on key requirements in trade development in mountainous areas and islands.

Vietnam receives positive view in global exports as EVFTA takes effect: report
Vietnam receives positive view in global exports as EVFTA takes effect: report
BUSINESSicon  05/08/2020 

Vietnam is expected to continue growing its share of global exports despite decline amid the resurgence in the COVID-19 pandemic after three months of no local transmissions, according to an HSBC report.

Local banks are racing to catch digitisation trend: expert
Local banks are racing to catch digitisation trend: expert
BUSINESSicon  05/08/2020 

Vietnam has seen a digital wave in the finance-banking industry, with many lenders investing significantly in digitisation, experts have said.

Experts call on Vietnamese government to aid businesses again
Experts call on Vietnamese government to aid businesses again
BUSINESSicon  05/08/2020 

Amid the new COVID-19 outbreak, experts have suggested the Government offer another credit support package to help enterprises, especially large businesses in key areas.

Vietnam's textile and apparel firms lack orders for the last two quarters
Vietnam's textile and apparel firms lack orders for the last two quarters
BUSINESSicon  05/08/2020 

The Ministry of Industry and Trade said that textile production increased by 1.8 per cent, while clothing production decreased by 4.6 per cent in the first seven months of this year over the same period last year.

 
 
 
Leave your comment on an article

OR QUICK LOGIN