Thailand’s Central Group and its local partner Nguyen Kim Trading Company have finally won the fierce battle for ownership of Big C Vietnam after offering 920 million euros (US$1.05 billion) to France’s Casino Group.

Thai companies are gradually acquiring major wholesale and retail companies in Viet Nam – it was Metro first, then Nguyen Kim and now Big C, all within a short period.

Central Group announced its success but did not disclose details about the capital structure. Electronics and appliances retailer Nguyễn Kim is 49 per cent owned by Central Group.

There were 20 suitors for Big C Vietnam, most of them big players like Aeon of Japan, Lotte of South Korea, BJC and Central Group of Thailand and Saigon Co.op and Masan of Vietnam.

Big C’s revenues last year were worth 586 million euros. It is second only to Co.opmart in terms of number of stores, meaning the acquisition of Big C Vietnam is expected to help Central Group save several years it would otherwise have spent in developing in the Vietnamese retail market.

The presence of many foreign retailers in the country, including from Thailand, will mean a wide range of high-quality goods at reasonable prices for consumers.   

The flip side is that Vietnamese producers and suppliers are apprehensive. After all, despite being opened up only recently, over 50 per cent of the retail market has already been captured by foreign retailers.

Significantly, many of them have ambitious plans to produce right here in Việt Nam.

Central Group’s commitment to continue using local products, maintaining strong relationships with Big C customers, employees and local authorities, and sourcing local goods for Big C stores has not allayed the apprehensions.

Thai companies are gradually acquiring major wholesale and retail companies in Việt Nam – it was Metro first, then Nguyễn Kim and now Big C, all within a short period.

According to the General Statistics Office, in 2015 Việt Nam imported US$8.3 billion worth of goods from Thailand. The figure was $1.8 billion in the first quarter this year.

The General Department of Customs said Thai goods imported into Việt Nam are becoming more diverse, ranging from vegetables, fruits and consumer goods to high-value products such as automobiles.

The number of autos imported from Thailand has risen very quickly: last year Việt Nam imported 26,700 vehicles from China, 26,500 from South Korea and 25,000 from Thailand, but this year Thai auto imports have overwhelmed the others with 7,800 compared to 3,500 and 2,260 for China and Korea.

Analysts said the Vietnamese retail market, since it has opened up, cannot avoid foreign players especially since it is worth dozens of billions of dollars.

Foreign retailers like Metro and Big C not only have prime locations in cities and provinces but also have experience promoting themselves to Vietnamese consumers.

Thai enterprises, for instance, use several tricks.

Metro, though still distributing Vietnamese goods, uses the best spots in its stores to display Thai goods in addition to offering promotions on them with big discounts of 4-15 per cent.

Vietnamese suppliers, unable to sustain the competition, have to gradually reduce selling to Metro.   

The problem for Vietnamese businesses is that for a long time they have focused on exports and neglected the domestic market.

The lack of co-operation between domestic businesses also makes them weak and unable to compete with foreign rivals.

Analysts also said Việt Nam still lacks a specific and transparent economic needs test (ENT) for foreign retailers to protect domestic suppliers. This, along with their deep pockets, has enabled foreigners to win prime positions.

Not only Central Group, which now has 100 stores with about 6,600 employees in Việt Nam, but also many other foreign retailers such as Ministop and Aeon of Japan, Lotte of South Korea and Auchan of France are expanding their presence in the country.

Inversely proportional to the expansion of foreign investors is the slowdown of domestic retailers such as Hapromart, Sapomart and G7 Mart. Even Saigon Co.op and Winmart have a struggle on their hands.

Vietnamese goods sold in Metro have reduced from 10 per cent of the total to 1-2 per cent now. A similar situation is expected at Big C in future.