The competition in the Vietnamese retail market between domestic and foreign players goes beyond price, into the realm of customer experience and service quality as players are vying to offer green and fresh goods.
The retail market has been recently picking up heat as giants began focusing on long-term strategies.
Vincom Retail has just introduced three new Vincom Mega Malls, including Vincom Mega Mall Ocean Park, Vincom Mega Mall Smart City, and Mega Mall Grand Park.
Vincom Mega Mall Ocean Park is located at the Vinhomes Ocean Park township, with unique utilities like a saltwater lake and sea inside the capital, as well as 62 hectares of parking space and water surface, 100 picnic spots, and six BBQ parks.
Vincom Mega Mall Smart City has “Vietnam’s very first Japanese garden” with eight utility parks attracting young and dynamic customers with high incomes.
Vincom Mega Mall Grand Park in Ho Chi Minh City has 48,000 square metres of commercial floor space spread out on five floors and a basement.
It is noteworthy that all these three complexes are designed green with smart functions, focusing on customer experience. Richard Wood, director of Concept-I, the design unit of the three shopping centres, said, “The difference is quite clear in design between the three mega malls. Vincom Mega Mall Smart City was inspired by the digital wave, the future technology trend. Vincom Mega Mall Grand Park started from the idea of a space for the community. Meanwhile, Vincom Mega Mall Ocean Park was inspired by the underground flows and the blue coastline.”
Utilising the advantages of nearby ecosystems to create a distinct speciality is a powerful marketing tool among the young generation nowadays. Vietnam has a young population, therefore “green design”, “smart operation”, and constantly breaking the limits of customer experience are almost mandatory trends.
Businesses have been introducing unprecedented experiences in the retail segment such as combining natural factors with the lighting system as well as deploying interactive games and applying modern technologies to bring convenience to customers. In addition, a series of community-based programmes are deployed to protect the environment.
The revenue of the Vietnamese retail market over the last eight years has been increasing. This indicates that Vietnam is becoming one of the most attractive retail markets in the region.
Nguyen Thai Dung, general director, BRG Retail stated that the retail market – even though growing fiercer by the day – still has a lot of space. According to a report from Nielsen, in 2018, the Vietnamese retail market witnessed the opening of thousands of new points of sale by Saigon Co.op, VinMart, Lotte Mart, and Big C.
However, only a quarter of goods flow through modern trade channels, while this is 90 per cent in Singapore and 50-60 per cent in China and Thailand. This is the reason for distributors’ focus on Vietnam.
Vietnamese retailers and foreign giants have found a new area, that of quality and lifestyle, to one-up one another. Many housewives said they gave up shopping at the Big C system because the group’s focus on cheap prices has gone at the expense of quality and freshness.
Dung moved to BRG Retail after working nearly 20 years at Big C. He believes that financial potential is only one of the conditions for long-term success. There are other important factors to help retailers hold on to and grow their foothold.
For instance, BRG’s edge is a retail system with numerous operating channels that are capable of serving a diverse customer base. Meanwhile, Hapro focuses on small shops located in residential areas, conquering customers with convenience and friendliness.
Intimex’s supermarkets are at least 1,000sq.m each and are flexing on their wide range of products, while Fujimart is gunning for high-end customers who are willing to pay more to experience professional Japanese service.
Being customer-oriented and digging up a unique operating model for each brand, however, make it challenging to synchronise and standardise operations across a brand ecosystem as each system has different culture, history, characteristics, and management methods.
“We have embarked on building and standardising each model, with job descriptions for each position such as supermarket manager, sales leader, or cashier,” Dung shared. Having professional operating standards for each model helps BRG Retail quickly expand its network in the appropriate locations.
According to Dung, the race to open new stores was in full swing in the second half of last year, requiring players to have strong financial potential as well as professional organisation.
With a history of decades, foreign corporations have the advantage in all aspects. On the other hand, while Vietnamese businesses are hard-pressed, they approach their battles methodically, with good synergies and fair competition. VIR
Forced to pay high rent for retail premises, many F&B chains have had to shut down.
Local retail businesses should focus on developing their own brands, improving the product quality and diversifying products in order to enhance their competitiveness in the domestic market.