Foreign investors are rushing to open convenience store chains in Vietnam, which is forecast to become the fastest-growing convenience store market in Asia by 2021.

Last week, the Republic of Korea (ROK)’s GS Retail announced plans to launch the first GS25 convenience store in Ho Chi Minh City this year. GS Retail and SonKim Group established a joint venture last month.

“We chose Vietnam as our first overseas market because its economy is growing very rapidly these days and those aged 35 or younger make up about 57% of its population,” said a GS Retail’s representative. “Our business in Vietnam is expected to lead to an annual profit of tens of billions of won, including royalties and dividend income.”

GS Retail’s future targets include China and Cambodia. This movement is part of the search for growth opportunities in the ongoing global market penetration of the Korean convenience stores. The size of the market topped 10 trillion won (US$8.9 billion) in 2011 and reached 20.4 trillion won (US$18.16 billion) last year.

FamilyMart, B’s mart, Circle K, and Vinmart+ are the best known convenience store names in the Vietnamese market. However, the market is expected to become even more crowded with the arrival of Japanese giant 7-Eleven, part of the Seven&I Holding Group.

7-Eleven, which opened its first store in Ho Chi Minh City two months ago, aims to launch at least 100 stores in Vietnam’s largest cities within the next three years. FamilyMart, Japan’s second largest convenience store chain, operates about 130 outlets in Vietnam, mostly in Ho Chi Minh City.

It recently confirmed plans to expand its network in Vietnam, despite recording losses for the first time.

Vietnam is forecast to become the fastest-growing convenience store market in Asia by 2021, according to new data released by international grocery research organisation Institute of Grocery Distribution (IGD).

Nick Miles, head of Asia Pacific at IGD, said in this year’s IGD report, “Convenience stores in Vietnam have become popular destinations for young consumers to shop and hang out, as the stores provide them with an air-conditioned environment, well-organized shelves and seating areas, high quality products, and, in some stores, free Wi-Fi.” He also explained that it is also easier to get licences for stores under 500 square metres, which is why retailers have been expanding to gain market share.

Dinh Thi My Loan, chairman of the Association of Vietnamese Retailers (AVR), told VIR that in recent years the venue for shopping in Vietnam has been changing from traditional channels like street markets to more contemporary models such as convenience stores and online shopping.

They often opt for convenience stores instead of small grocery shops and traditional markets for their shopping, Loan says that it is these emerging channels that represent the future of retail in Vietnam.

“Local players such as Vinmart+ are beefing up their presence,” Loan said. “This is considered a strong counterbalance to foreign corporations in this field.”

The VinMart+ chain plans to reach 1,000 convenience stores across Vietnam this year.

Loan added, “The convenience store will gradually replace the traditional market model. They are situated close to residential and commercial areas, providing a real convenience for consumers-especially for those that want to buy just a few items without going to the supermarket. That is the reason such stores can develop in tandem with supermarkets, perhaps even overtaking them.”

According to AVR, the shopping needs of Vietnamese people only account for 20-25% of consumer spending, much lower than those of the Philippines (33%), Thailand (34%), China (51%), Malaysia (60%), and Singapore (90%).

VIR