The Vietnamese retail market, worth billions of dollars, is attractive to foreign investors. One of the effective solutions is merger and acquisition (M&As), which Central Retail from Thailand has often engaged in.

The powerful Thai group reportedly plans to buy a domestic shipping mall and invest 50 billion baht ($1.45 billion) in Vietnam from now to 2027 to increase its presence here.

However, the domestic shopping mall chain has denied this with VietNamNet.

Central Retail is the most important business field of Central Group owned by the Thai billionaire family Chirathivat. According to Forbes, the billionaire family has total assets worth $10.6 billion.

Central Retail joined the Vietnamese market in 2012 as a fashion retailer, with just several branches. To scale up its business in Vietnam, it spent billions of dollars on M&A deals.

In April 2016, Central Retail took over Big C Vietnam from the French Casino Group in a deal worth 920 million Euros, or $1.05 billion.

In 2021, Central Retail completed the renaming of supermarkets to Tops Market and hypermarkets to Go!, eliminating the Big C brand in Vietnam after 22 years. 

Central Bank has been expanding its network of smaller-scale food stores which directly compete with traditional markets and convenience stores.

In 2015, Central Retail acquired Lan Chi Mart, the chain that is mostly present in northern rural areas. The value of the deal remains a secret. Lan Chi mart was established in 1995, comprising 24 stores. The current legal representative of the supermarket chain is a Thai citizen.

In another deal, the Thai billionaire spent VND2.6 trillion to acquire Nguyen Kim, a household appliance retail chain. The owner and operator of the chain was NKT Company, established in 2014 with charter capital of VND800 billion. Nguyen Kim once led the Vietnamese household appliance retail market segment as it was the first to appear in the market.

Through Nguyen Kim, Central Group also acquired the e-commerce website Zalora Vietnam from the German Rocket Internet in May 2016. One year later, Central Group stopped Zalora and turned it into Robins.vn.

The group also owns two fashion shopping centers named Robins in Hanoi and HCM City, which display mostly international brands, with the majority Thai products.

To date, Central Retail Vietnam has 340 business points with total retail premises of 1.2 million sq m in 40 cities/provinces. 

Central Retail is the largest international retailer in Vietnam, leading the hypermarket segment, and ranks second in terms of shopping center market share.

Ambitious plan

According to Yol Phokasub, CEO of Central Retail Corporation (CRC), Vietnam is an important market for the retail group. Central Retail Vietnam has set a goal of becoming the No 1 omni-channel food retailer and No2 in number of shopping centers in Vietnam by 2027.

Regarding business results, Central Retail Vietnam saw revenue jump from 300 million Baht ($8.7 million) in 2014 to 38.592 million Baht ($1.12 billion) in 2021. In 2022, sales made up 25 percent of the total revenue of Central Retail.

Olivier Langlet, CEO of Central Retail Vietnam, noted that Vietnam’s economy continues its growth momentum with GDP predicted to grow by 6.7 percent in 2023 and 7.2 percent in 2024, while the figure is just 3.5 percent for Thailand for the next two years. 

As such, Vietnam will be the fastest growing market in Southeast Asia.

The Vietnamese retail market is estimated to have value of $49.7 billion a year, which means the growth rate of 10-12 percent per annum. 

The urban population has been increasing, while the number of foreign travelers is predicted to increase again with 19 million travelers this year, and 21 million by 2025. 

The group plans to account for 13 percent of the total Vietnam retail market by 2027.

The largest retailer in Thailand plans to invest $50 billion Baht in Vietnam from 2023 to 2027. 

Central Retail Vietnam plans to double its number of stores to 600 in 57 cities/provinces by that time with 2 million sq m of floor area. The investment capital for 2023 alone would be 6 billion Baht.

Central Group has not mentioned any M&A deal, but experts believe the expansion through M&A deals is likely to happen. 

Though the group has powerful financial capability, not all of its business deals in Vietnam have been successful. In 2019, it had to shut down Robins.vn.

Duy Anh