According to VNDirect's analysts, Vietnam’s retail industry in the last 6 months of 2022 will return to the growth trajectory and form 3 major trends.
In the first 5 months of the year, the total retail sales of goods and services increased by 8.2% over the same period. As of June, the visit of Vietnamese people to retail and entertainment locations has recovered to pre-pandemic levels, marking the return to a phase of consumption growth in Vietnam after 2 years of being affected by COVID-19.
In addition, VNDirect believes that Vietnam's inflation can be maintained at a lower level than that of other countries, especially European and American ones, and will not affect people's consumption much. That is also a supporting factor to help the industry get back on track.
According to VNDirect, three trends will develop in Vietnam's retail industry in the last 6 months of 2022.
Firstly, the shift to modern retail will be more obvious after the pandemic, helping modern department chains grow stronger.
Secondly, major retailers will constantly expand into retail markets such as pharmaceuticals or mother and infant markets.
Finally, retail real estate companies will recover thanks to services being restored.
According to Kantar data, after the pandemic, the market share of the mini supermarket channel reached 10% in the first quarter, double the pre-pandemic level. During the quarter, the value of FMCG consumption by mini-marts increased by 20% in 4 key cities and 32% in rural areas, indicating a shift to modern channels.
After the sales plummeted from the fourth quarter of last year, Bach Hoa Xanh started changing its operating system at the beginning of 2022. Last April, 460 out of 2140 Bach Hoa Xanh stores were upgraded to a new model to increase revenue by 10% compared to the old model.
Masan also integrates additional services such as Phuc Long tea and coffee system, Phano pharmaceutical chain, Techcombank payment service, and Joins Pro laundry service to Winmart+, turning Winmart+ into a chain of multi-convenience retail stores.
VNDirect cited IBM's market research, showing that the size of Vietnam's pharmaceutical market was about 7.7 billion USD in 2021, with a compound growth rate of 16.2% in the period from 2012 - 2021. Market size is expected to reach 16.1 billion USD in 2026, equivalent to a compound growth rate of 15.9% in the period from 2021-2026.
According to VNDirect, the scale of large modern pharmaceutical retail chains accounts for less than 4% of the total number of pharmacies nationwide, which shows the potential for developing pharmaceutical retail chains. As of June, the Pharmacity chain had the largest number of stores with more than 1,100 stores, ranked second was the Long Chau chain with nearly 630 stores, and An Khang ranked third with nearly 360 stores.
In addition to the pharmaceutical market, retail giants also target the children's products segment. According to Euromonitor, sales of baby products in Vietnam, including baby food, baby products, and children's clothing, will reach about 50,100 billion VND in 2021 and are expected to grow at a compound rate of about 7.3%/year in the period from 2021 - 2025. 80% of the market share will belong to small-scale stores.
The first test result of the AVAKids chain shows that monthly revenue per store can reach 2 billion VND, of which online sales revenue accounts for 25 - 30%. As of June 1, the number of AVAKids stores reached 50, marking the second phase of AVAKids testing.
According to VNDirect, in Vietnam's new normal state, the retail service sector has recovered strongly. Revenue from the accommodation and catering segment increased by 14.7%, and tourism services by 33.9% over the same period.
The number of visitors to Vincom's shopping centers recovered to 60% of pre-pandemic levels in the first quarter and recovered to pre-pandemic levels in the second quarter as the summer entered the peak season with fun activities. at shopping malls.
VNDirect said that Vincom Retail plans to expand about 1.4 - 2 million m2 of retail floor space within the next 4 years, aiming for a total floor area of 3.3 - 3.7 million m2 in 2026, about 2 times higher than in 2021.
According to VNDirect, in the second half of 2022, Vincom Retail may grow 95.5% to 2,569 billion VND, on the basis that the company does not add any support packages for tenants, combined with the expansion of floor space. The growth will be supported by the return of customers to shopping centers starting from the second quarter of 2022.
For Phu Nhuan Jewelry, VNDirect forecasts profit after tax to grow 60.5% YoY to 1,658 billion VND. PNJ's strategies can maintain the growth momentum of its retail segment in the next 5 years, including cooperation with other famous brands such as Pandora and focus on digitalization and multi-channel selling.
Compiled by VietnamCredit