VietNamNet Bridge - What is the future for Vietnamese goods when foreign goods, following foreign retailers’ steps, penetrate the Vietnamese market?

 

Fivimart is well known as the retail chain that prioritizes to distribute Vietnamese goods, with more than 90 percent of goods displayed made in Vietnam. 

However, since early 2015, after 30 percent of its stakes were transferred to Aeon, the retailer from Japan, Fivimart, has reserved an area in the supermarket to display the Japanese partner’s goods with the Top Value brand.

Many other supermarkets, which mostly sold Vietnamese goods in the past, now also distribute foreign products because of changes in ownership.

Many other supermarkets, which mostly sold Vietnamese goods in the past, now also distribute foreign products because of changes in ownership. The struggle for the seats on the shelves at supermarkets has become stiff.

Vu Thi Hau, deputy general director of Nhat Nam JSC, which runs Fivimart, also noted that Vietnamese goods bear pressure amid the massive arrival of foreign retailers.

Aeon Long Bien Shopping Mall, which only began operation in 2015, attracts 50,000-60,000 visitors a day. Ninety percent of goods displayed there are made in Vietnam, while Japanese goods are mostly made in third countries such as Hong Kong. Meanwhile, 10 percent of foreign goods there are also available at Aeon global and they are attractive in style, design and prices.

Tadahiko Ishikawa, director of Aeon Long Bien, said Aeon plans to open 16 shopping malls throughout the country, including six in Hanoi.

Metro, Lotte, Big C, Parkson and BJC have also geared up with their plans to expand the networks. 

Meanwhile, E-mart, Wal-Mart, Seven & I Holdings and Takashimaya are considering entering the Vietnamese market.

To exist in the new circumstances, Vietnamese retail chains, which are small and lack experience, have to sell shares to foreign investors and expand their networks.

Fivimart has sold 30 percent of stake to Aeon. Citi Mart has sold 49 percent of stake also to Aeon. S.mart has become French Auchan Super Simply Mart. Tran Anh has sold 31 percent of shares to Nojima Corporation, while Nguyen Kim has transferred 49 percent of stake to Central Group.

The presence of foreign investors in the Vietnamese retail market has raised concerns about the fate of Vietnamese goods.

“There is no reason for the new owners to maintain the same distribution mechanism after taking over a retail chain,” an analyst said, adding that foreign investors, as the new owners, will decide what to sell at their chains.

Ngo Tri Long, a renowned economist, said that Vietnamese manufacturers, in order to exist, have no other choice than to become more competitive in quality and price.

“Retailers, no matter Vietnamese or foreign, will have to sell the products consumers want and can buy,” an analyst said.


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