The market needs more cooperation among Vietnamese retailers amid the massive influx of foreign retailers, experts say.
Vingroup has announced the signing of an agreement to merge Vinmart and Vinmart+, its two retail brands, with the Masan Group, a consumer goods manufacturer.
Under the agreement, VinCommerce, the retail company, and VinEco, the farm produce supplier, both belonging to Vingroup, will merge with Masan Consumer Holdings of Masan Group to become the leading consumer goods & retail group in Vietnam.
Vingroup will convert all shares in VinCommerce to shares of the new company after the merger; Masan Group will control the operation of the new company, while Vingroup will be a shareholder.
This means that Masan Group will take over Vingroup's management of more than 2,600 supermarkets and VinMart & VinMart+ stores in 50 provinces and cities across the country.
|Vingroup affirmed that this is not an M&A deal, but just the joining of efforts and swapping shares. With the cooperation, VinCommerce will be like a ‘tiger with additional wings’ when joining forces with Masan to develop a big consumer goods & retail group, thereby leading the development of the consumer goods & retail industry in Vietnam.|
Vingroup affirmed that this is not an M&A deal, but just the joining of efforts and swapping shares. With the cooperation, VinCommerce will be like a ‘tiger with additional wings’ when joining forces with Masan to develop a big consumer goods & retail group, thereby leading the development of the consumer goods & retail industry in Vietnam.
Meanwhile, Vingroup will gather strength to manufacture cars and smartphones.
Truong Cong Thang, chair of Masan Consumer Holdings, stressed that the joint efforts between the leading consumer goods manufacturer and the largest retailer will ‘ensure a fair retail playing field for Vietnamese manufacturers’.
Vietnamese analysts had positive comments about the deal, noting that Vingroup has not chosen a foreign partner to cooperate with, but a Vietnamese corporation. The move will improve Vietnam's ability to develop a giant consumer goods & retail group of international stature.
Tri Thuc Tre commented that it is still not clear what effects the Masan-Vingroup handshake would bring, but the move might be a step in the ‘third wave’ that Masan’s deputy CEO Nguyen Anh Nguyen mentioned.
“Masan’s third wave is joining hands with Vietnamese big partners to defend ourselves amid the trade attack from outside."
“What will we do? We still don’t know. But at least we have ideas about this. Wish us good luck! Good luck to Vietnam!” he said.
The moves taken by the two ‘big guys’ have been described as wise steps to improve Vietnam’s retail industry’s strength.
Nguyen Ngoc Hoa, chair of the HCMC Finance and Investment Company, commented that the synergy will create a turning point, forming an alliance between an enterprise that produces a large amount of consumer goods, and a retail company with the highest number of retail points in the market.
All operations of Vingroup’s e-commerce platform Adayroi stopped since yesterday (December 17) evening.
Foreign retail groups undoubtedly are a powerful influence in the domestic market. However, Vietnamese retailers are vowing to ‘play big’ to gain the upper hand in the home market.