VietNamNet Bridge – Thai, Japanese and South Korean retailers are rushing to enter the market in Vietnam, putting pressure on domestic manufacturers.

The Japanese Aeon retail group, for example, has recently received a license for the development of a shopping mall in Hoa Lam Shangri-La Hi-tech Park in Binh Tan District, HCM City.

With the project, it plans to pour another $128.5 million into Vietnam after investing $512 million to develop Aeon Tan Phu Celadon in HCM City, Aeon Binh Duong Canary and Aeon Hanoi Him Lam.

Unlike the other existing retailers from Europe like Big C and Metro Cash & Carry, which focus on distributing domestically made products (90 percent of products displayed at the chains have Vietnamese origin), Aeon obviously has been trying to boost sales of Japanese products.

Yasuo Nishitohge, general director of Aeon Vietnam, said that one-third of the goods to be distributed through the Aeon chain will be from Japan. The retailer possibly understands that Vietnamese favor Japanese goods, from technology products to clothes and cosmetics.

Japanese goods are displayed in advantageous positions which can easily catch customers’ eyes at Aeon Tan Phu Celadon. The retail shops that distribute Japanese goods also occupy the best positions in the shopping mall.

Analysts thought that Japanese goods would not sell well in Vietnam because of the high prices. However, at Aeon Tan Phu Celadon, the goods are at “reasonable price levels”, because they are made in China and Thailand.

In 2013, when Family Mart was ousted by Thai BJC from the 40-shop retail system in HCM City, people believed that the Japanese retailer would leave Vietnam soon.

However, in fact, as Kigure Takehiro from Family Mart said, the retailer has been looking for retail premises to develop a convenience store chain that could become the leader in the market in 10 years.

Meanwhile, Daiso, Hachi Hachi, Akuruhi and Tokutokuya, shops specializing in distributing Japanese goods, have been trying to strengthen their presence in many big cities in Vietnam.

Thai, S. Korean firms enter the fray

South Korean company Lotte plans to open 60 sales points by 2020 in Vietnam, while it now has less than 10 sales points. This shows South Korea’s ambitious plan of conquering the Vietnamese market.

Meanwhile, analysts commented, BJC has “taken a shortcut” when coming to Vietnam by taking over the existing retail chains. It has spent 655 million euros to take over the 19 Metro Cash & Carry’s distribution centers.

Central Group, the owner of a Robinson distribution chain, has also taken quick steps in Vietnam. After opening the first Robins in March, it is hurrying to put another one in HCM City into operation, slated for November.

Pham Chi Lan, a renowned economist, noted that Thai, Japanese and South Korean retailers will distribute products from their respective country’s manufacturers.

Lan, while emphasizing that distribution will determine production scale, has urged the government to apply necessary measures to encourage Vietnamese enterprises to open new sales points to help develop domestic production.

TBKTSG