Modern trade channels, e-commerce to further thrive: experts

Modern and online shopping channels recorded strong growth last year and will continue to thrive this year, according to experts.

Customers shop at a supermarket in HCM City. Modern and online shopping channels recorded strong growth last year and will continue to thrive this year.

Modern and online shopping channels recorded strong growth last year and will continue to thrive this year, according to experts.

Le Hoang Long, manager of Nielsen Vietnam’s retail chain consulting, said the Covid-19 pandemic has boosted online shopping and more consumers would choose to shop online even after the pandemic ends.

“The modern trade channel saw strong evolution last year due to new added chains.”

As of December there were around 8,500 stores nation-wide, including 453 supermarkets and 5,566 minimarts with the rest being convenience, health and beauty, drug, and cash & carry stores, he said.

There is a fierce competition in the retail market, and so each chain has to identify its strengths to retain competitiveness, he said.

“Supermarkets should embrace the model of shopping associated with entertainment. That is the strength of supermarkets compared to others such as minimarts and convenience stores.”

He said the customer base is changing, with an increase in the number of customers aged between 50 and 65.

“Therefore, supermarkets must make changes in terms of services and goods to meet the needs and experiences of this emerging customer group.”

According to the Ministry of Industry and Trade, average retail sales and consumer services revenue per capita increased from VND 19.3 million in 2010 to VND 51.2 million in 2019, accounting for 8 per cent of GDP.

E-commerce, supported by electronic payment, has grown especially strongly in recent years, averaging over 27 per cent growth, it said.

Nguyen Phuc Khoa, deputy general director of Saigon Trading Group (Satra), said, “The modern retail market in Viet Nam has great potential for development, mainly thanks to its large population size, a high ratio of young people and an average annual increase of 10.5 per cent in household spending.”

The number of internet users reached 68.17 million last year, with more than 145 million mobile devices connected, which would fuel the growth of online buying, he said.

 

“Viet Nam’s retail market has great potential but not everyone can grasp the opportunity.

“Some big brands like Auchan, Parkson and Shop&Go pulled out of the market completely or contracted their network, which shows it is not an easy market.”

He also mentioned other difficulties facing the retail market.

“Commercial infrastructure is developed but is still weak and out of date in some areas. Retail commercial infrastructure such as markets, supermarkets, commercial centres, convenience stores, and specialised stores have increased rapidly, but are mainly concentrated in cities and towns.

“E-commerce infrastructure has not developed comprehensively, and there is a lack of connectivity and support services for e-commerce such as payment and logistics infrastructure.”

Long said retailers have actively adopted new technologies and tied up with e-commerce platforms and cashless payment solution providers to offer more convenience and new services to shoppers.

As a leading consumer retailer, Saigon Co-op would in 2021 continue to embrace digital transformation to adapt to the changing market and consumer behaviour, Nguyen Anh Duc, its general director, said.

Private label products

“Private label products offer a great competitive advantage to retail chains,” Long said, adding that consumers prefer them.

In countries with developed modern trade channels such as the EU, revenues from private label products account for 40 per cent while the global average is 16.5 per cent.

The ratio of private label products in Viet Nam remains modest, offering retailers the opportunity to exploit this segment, he added. — VNS

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