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Q & Me Report: Vingroup Dominates The Retail Market In 2019

Monday 11, 11 2019
The Q & Me report on the overall picture of the retail market in 2019 is changing rapidly with the strong growth
Q & Me Report: Vingroup Dominates The Retail Market In 2019
Market research reports from Q & Me show that Vingroup is leading the rise in modern commercial sales, with a dominant market share in shopping malls, convenience stores, and supermarkets.
 

The Q & Me report on the overall picture of the retail market in 2019 is changing rapidly with the strong growth of modern channel stores along with the sales of big corporations, in which Vingroup has completed many acquisitions of convenience store chains, mobile phone stores, department stores, etc.

Retail Sales Increased The Most Ever, With Vingroup Accounting For The Majority

According to the Q & Me report, retail sales reached $ 142 billion in 2018 - the highest ever recorded and expected to reach $ 180 billion by 2020. The compound annual growth rate (CAGR) is 13%. In particular, Hanoi and Ho Chi Minh City are the two cities with the strongest growth in modern sales channels. Ho Chi Minh City and Hanoi alone account for one-third of total revenue (Ho Chi Minh City is 22% more than double Hanoi's 11%).

However, in the MT segment, there is a tendency to thrive in cities other than Hanoi and Ho Chi Minh City. The growth of the supermarket segment in Hanoi and Ho Chi Minh City is only 10%, the department store is 11% while the other cities are 23% with the supermarket segment and 34% in the department store.

In particular, Vingroup leads the increase in modern trade, with a dominant market share in department stores, CVS and supermarkets. Vingroup's market share in supermarkets is 33%, convenience stores are 51% and department stores account for 70%.

 Q & Me Report: Vingroup Dominates The Retail Market In 2019

Forecasting for the compound growth rate (CAGR) of convenience store retail sales in the period of 2017-2021, Q & Me stated that the number of CVS will continue to increase. The CVS sales are expected to increase by 37.4% CAGR until 2021.

Vietnam is expected to surpass its neighbors in terms of retail sales of convenience stores. The growth rate of Vietnam is 37.4%, while the Philippines is only 24.2%, Indonesia 15.8%, Malaysia 10.5%, India 10.3%, China 7.1%, and Thailand 6.6% and Japan 5.5%.

To gain market share, CVS developers in Vietnam aim to develop thousands of stores over the next 8-10 years across the country. The 7-eleven CVS chain currently has only 27 stores but aims to have 1,000 stores by 2027. B’s mart currently has 125 stores and aims to have 3,000 stores by 2027. Family mart currently has 151 stores and aims to have 1,000 stores by 2020. Ministop plans to increase the number of stores from 115 to 800 stores by 2028, Vinmart + currently has 1,465 stores and aims to increase to 4,000 stores by 2020. Another unit, GS25 - a Korean convenience store chain that has just launched a franchise program in Ho Chi Minh City in November, is also expected to increase the number of stores from 50 to 2,500 by 2028.

There Will Be More Mergers Or Withdrawals From The Market

A report from Q & Me said that although the trend of growing MT stores is increasing, the fierce competition has led to many M&A deals with large corporations taking place. Besides, some units chose to exit the market.

Typically, Fivimart used to belong to Aeon but has now been acquired by Vingroup. Shop & Go's operations were also taken over by Vingroup in 2019. Or the telecom chain A, established in 1997, was also acquired by Vingroup in 2018.

Along with the fierce competition in the market share of the retail industry, the Auchan chain of French giants developed in 2015 also had to withdraw from the Vietnamese market. After a long, unprofitable journey, the unit decided to sell 18 stores in May 2019 and say goodbye to consumers.

Regarding the shopping trend of users, Q & Me predicts that the MT channel will continue to be popular among upper-class customers, while the GT segment is the first choice of the customers who prefer cheap items.

When the 4.0 era ascended, technology was also used in retail to provide customers with new shopping experiences. In which Vingroup is the most active unit.

In the future, CVS system developers will apply modern technology to open virtual stores to meet customers' anytime and anywhere shopping needs. At that time, users only need to sit in one place to download the App, scan the QR code of the product printed on the catalog, proceed with payment and then wait for the goods to be received.

Learn more: 
The Ministry of Finance estimates that public debt will reduce to 52.7% of GDP by 2022

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