Convenience stores have been developing rapidly

Vo Thi Khanh Trang from Savills HCMC said the first convenience stores were Vietnamese owned and appeared 10 years ago. However, the retail model did not succeed because the prices were unaffordable.

Today, convenience stores have witnessed a boom recent years thanks to increasingly high demand, especially from youth.

A survey by Savills showed that 17 percent of consumers liked to go to convenience stores in 2017, much higher than the 4 percent in 2015.

Meanwhile, the latest report of Nielsen on global shopping trends showed that Vietnamese consumers now visit traditional markets less regularly, but they go to convenience stores, mini marts, personal care product shops and drugstores instead.

Gaurang Kotak from Nielsen Vietnam said that as urbanites have less time, face traffic jams and live far from their offices, they need products with more convenience. 

The new consumption trend has led to a convenience store boom. The number of convenience stores and mini marts in Vietnam has been increasing by 200 percent a year. 

According to the HCMC Industry and Trade Department, in late 2014, the city had 326 convenience stores, while the figure rose to 1,144 in late March 2018. 

Vu Vinh Phu, a trade expert, commented that convenience stores sell fast food products at reasonable prices and attract young consumers. 

In addition, foreign investors can open retail shops with an area of less than 500 square meters without having to undergo an ENT (economic needs test). ENT is understood as a tool to help control the development of retail networks owned by foreign investors.

According to Kantar Worldpanel, the convenience store market segment is controlled by foreign investors who hold 80 percent of market share. 

The best known brands include Circle K with 297 stores, Family Mart with 160, B’s Mart, 168, Shop & Go, 110, and Ministop, 116.

Retailers have been expanding their convenience store networks. Family Mart, for example, plans to have 1,000 stores by 2020 and 7-Eleven 1,000 stores by 2027. 

Meanwhile, Vinmart+, a Vietnamese owned chain, has the ambitious plan of opening 4,000 stores by 2020. 

The Vietnam Retailers Association commented that modern retail channels only make up 20-25 percent of consumer spending, a low proportion compared with the Philippines (33 percent), Thailand (34 percent) and China (51 percent). This means that ‘room’ for convenience stores remains.

Analysts said convenience stores usually take a loss in the first three years or more of operation. 

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