return icon

Innovation the name of the game for retailers

Applying technology in the retail industry is the next step in its evolution and will enable the offering of new experiences for customers while, conversely, retailers that are sluggish to update and innovate face being left behind. 



Along with traditional payment methods in retailers, there are now even quicker options to save on queue times



Technology is contributing to the convenience of shopping activities in movement and in payments. In 2019, retail chains VinMart and VinMart+ launched their Scan&Go function, which is integrated on the VinID application to remove long periods for payment, remote shopping, and delivery.

Employing VinMart Scan&Go, instead of putting every product into a basket and queuing to pay, customers can start the VinID application, scan the barcode on the products, and pay at a priority desk. Customers can also pay at the shop and the goods will be delivered within two or four hours later.

As using Scan&Go takes around 30 seconds, up to 90 per cent faster than usual, technology apps like these are contributed significantly towards the convenience of shopping, as well as enabling new experiences for customers.

Recently, convenience stores are becoming a popular segment for numerous foreign brands like Circle K, K-mart, and Shop&Go, in addition to local names like VinMart+ and Bach Hoa Xanh, which are rising in Vietnam in a way that was fairly rare only five years ago. Besides their dense store network, these stores also provide delivery services and online shopping.

These modern convenience store chains have reported remarkable growth over recent years. The retail segment of conglomerate Vingroup before being recently acquired by Masan Group increased the number of stores to nearly 2,200 for VinMart and VinMart+, while it was 1,800 at the end of 2018. Moreover, there were 241 VinPro and Vien Thong A stores, with growth of revenue at 16 per cent from VND13 trillion ($565.2 million) in 2017 to VND19.5 trillion ($847.8 million) in 2018.

The development of modern models combined with technology is contributing to strangling the traditional retail chains. In addition to grocery stores and wet markets, supermarkets like Big C, Lotte Mart, and MM Mega Market are also struggling with new rivals.

As one of the oldest supermarkets in Vietnam, Big C was always traditionally popular as one of the biggest retailers. However, its market share has been struggling, with some of its supermarkets reporting negative or very low growth over the last few years, including the Big C stores in Thang Long, An Lac, Haiphong, Binh Duong, and Dong Nai.

Another player entering Vietnam as early as Big C, Metro Cash & Carry Vietnam, which was in early 2017 changed into Thailand’s MM Mega Market Vietnam, has been operating quietly after the acquisition in 2016. A favourite shopping destination at the weekend for families, MM Mega Market is being competed by modern commerce centres including Japan’s AEON Mall. As a result, the chain’s expansion plan to add five new centres each year has been left open.

Meanwhile, some retailers are exploring niche market in residential areas. In recent years, Saigon Co.op has been promoting small-scaled Co.op stores specialising in fresh and frozen food. The retailer has already set foot in the north with three Co.op Food stores at the end of 2018, three Co.opmart SCA supermarkets (after acquiring the French Auchan chain) in Hanoi, and 72 Co.op Smile grocery stores targeting teenagers.

Worldwide, retailers are being forced to close stores because they cannot adapt to new trends. Sears Holdings, a 125-year-old US retailer, went bankrupt at the end of 2018 due to the fierce competition of e-commerce.

According to statistics from Coresight Research, a US-based research and advisory firm, over 9,300 stores closed in 2019, considered another bruising year for many American retailers. This is the highest number for seven years.

Thousands more store closings could be on the way in the coming years as online shopping continues to replace purchases at physical stores and eat into retailers’ profits. High debt levels and rent have also burdened traditional retailers.

Online sales make up around 16 per cent of retail sales today, but they will rise to 25 per cent by 2026, according to a report from Switzerland’s UBS, a global firm providing financial services. That could force up to 75,000 more stores to close by 2026, including more than 20,000 clothing stores and about 10,000 consumer electronics stores. Thousands of home furnishings and sporting goods stores will also need to shut as online shopping grows rapidly.

Enable overseas markets

Against the bruising situation of traditional retailers, online channels are evolving remarkably, especially Amazon, Alibaba, and some local platforms like Lazada, Shopee, and Tiki. Along with the evolution of the internet and youth tech knowledge, e-commerce is a useful bridge for the retail industry and even small- and medium-sized enterprises (SMEs) to touch overseas markets, especially in the integration process of Vietnam.

In addition to the support of technology platforms, Amazon Global Selling also established a dedicated team to better support Vietnamese SMEs in their cross-border e-commerce and business expansion activities, thanks to Amazon’s international customers. Amazon Global Selling provides professional knowledge related to the sales of products on the Amazon website to Vietnam’s retailers.

Meanwhile, the region’s biggest e-commerce platform Alibaba has co-operated with Fado to support SMEs reaching overseas markets. Pham Dat, CEO of Fado, said that Vietnam’s businesses could introduce their goods to 260 partners across 240 countries and territories. Based on this business-to-business platform, local retailers will find it easier to locate cross-border customers, increase orders, and exercise payments.

As a result, e-commerce platforms and the support of technology applications are expected to increase export volumes and create opportunity for local retailers to carry out directly export without expensive costs for renting offline stores.

James Dong, CEO of Lazada Vietnam and Thailand told VIR, “Probably very likely from next year, we’re going to empower a lot of Vietnamese to sell to other ASEAN countries through cross-border trading. Vietnam has a large manufacturing base, and it has a higher chance of being more successful than some other countries in terms of selling elsewhere in Southeast Asia.”

Time and money

In addition to competing with e-commerce platforms that impact offline retail, in order to develop a modern retail industry and catch up with the trend, traditional retailers could change the measures of shopping to bring new experience.

In Singapore, supermarkets without cashiers are quite popular. With some automatic cash registers, customers can pick all goods into baskets, scan their barcode and pay via card. Moreover, some cashless supermarkets in Singapore are being operated by robots.

There, customers buying 10 or fewer grocery items can use their smartphones to scan each item and pay using the Honestbee app.

According to Pauline Png, vice president and managing director at Habitat by Honestbee, a Singaporean delivery firm, by automating the checkout process, it frees them up from things like queuing, and they have an extra five or 10 minutes to maybe eat or get a coffee.

Besides a fully automated checkout system, Habitat by Honestbee also features 15 food stalls, where customers can have a meal while waiting for their groceries to be packed.

According to retail expert Vu Vinh Phu, the modern retail model makes up 26 per cent of market share only.

However, growth speed was 11 per cent in 2018, and is estimated at higher in the next few years. Meanwhile, traditional retail captures 70 per cent of market share but growth was at only 1 per cent.

“This opens opportunities for the leading players that research and apply high-tech into management, operations, and sales to lure more customers,” said Phu.

As a result, traditional retail and online retail are evolving in parallel, and removing borders step by step.

Experts have said that in the context of Industry 4.0, two factors which can determine the development of the retail industry are technology and innovation.

Without these, retailers in Vietnam will not be able to maintain market share if overseas retailers enter and attract customers through new and innovative experiences. VIR

Ha Vy

Japan’s retailers reaching out to Vietnam’s market

Japan’s retailers reaching out to Vietnam’s market

Japanese retailers are increasingly amplifying business activities in Vietnam as the country’s middle class expands amid market conditions in their home country slowing down.

M&A situation turns around: VN billionaires take over foreign retailers

M&A situation turns around: VN billionaires take over foreign retailers

Foreign retail groups undoubtedly are a powerful influence in the domestic market. However, Vietnamese retailers are vowing to ‘play big’ to gain the upper hand in the home market.


Foreign travel website suggests 10 best things when visiting Vietnam

Kayaking in the waters of picturesque Cat Ba island and taking a food tour to sample delicacies around Ho Chi Minh City are among the 10 best things to do in Vietnam, according to UK-based travel website Time Out.

Vietnam’s coconut kingdom protects organic coconut areas by biological methods

When the trend of consuming organic products is increasingly popular, the development of organic material sources has become an urgent requirement. Protecting these sources has become a great concern of producers in many countries around the world.

Electronics industry capacity must keep up with increased investment

Vietnam needs policies to enable the electronics industry to ready its supply chain as the country becomes ever more attractive for investment, Deputy Director of the Industry Agency under the Ministry of Industry and Trade Pham Tuan Anh said.

VN central bank shifts up interest rates to combat US Fed adjustments

After the State Bank of Vietnam implemented the new operational interest rate on September 23, all joint-stock commercial banks, with the exception of state-owned ones, have adjusted the deposit interest rate for most terms.

HCM City targets international cruise tourists

Ho Chi Minh City has great potential to attract international cruise tourists as part of an effort to speed up tourism recovery post-pandemic, experts said.

Waste criteria lacking for nation’s IPs

Vietnam’s industrial parks are in the process of transitioning to more ecological models, but are struggling due to a lack of regulations on reusing treated waste and wastewater.

Vietnam experiences solid rise in production

The Vietnamese manufacturing sector rose solidly inside growth territory at the end of the third quarter of the year.

VN-Index bounces back from two-year low

The benchmark VN-Index on Wednesday regained the 1,100-point landmark after falling to a two-year low, but low liquidity may threaten the market recovery in the next sessions.

Sexual-assault victims choose to remain silent amid backlash on social media

Many travelers have told VietNamNet that they had been victims of sexual assault but later decided not to report their cases for fear of being ridiculed and blamed.

'South Korean street’ in HCM City deserted as business people leave

Amid business decline, some South Korean businessmen have gone bankrupt or shut down their business and left for their home country. It’s unclear if they will come back.

Foreign tech firms scale up operations in Vietnam

Molex, the world’s leading electronic component and connection device manufacturer, has announced a plan to expand its production facility in Hanoi with a total production area of 16,000 sq m.

Vietnam’s veggie, fruit imports from China surge

Vietnam spent some US$473 million importing vegetables and fruits from China between January and August, surging by 74% year-on-year and accounting for 38% of the country’s total veggie and fruit imports.

Legal move towards fair competition in pay TV market

A new decree on the use and management of broadcasting services aims to create an impartial playground between domestic and foreign pay TV service providers.

79 villas to be pulled down in Phu Quoc for construction violations

Authorities in Phu Quoc Island in the southern Kien Giang Province are removing 79 villas that were illegally built in Duong To Commune.

Vietnam needs large domestic shipping lines

The lack of domestic shipping firms has caused difficulties for export companies.