The growth rate of retail industry is always half or twice higher than the GDP growth, and the proportion of this industry is very large, therefore, investing in retail means investing in the future of Vietnam’s economy. The model of traditional small shops currently accounts for 65% market share but with the successful presence of electronics, mobile phone and department stores in rural areas, the market share of this segment will gradually decrease to make room for modern types of retail.
However, 2019 is considered a turbulent year for the modern retail segment, especially department store retail. Of the total retail industry which is worth USD 142 billion (accounting for 59% of GDP), department stores account for the largest value with about USD 60 billion, the mobile phone, watches, pharmaceuticals, jewelry, and electronics retail segment accounts for a very small proportion while USD 70.65 billion is the value of other retail segments.
In early 2019, the Watsons cosmetic retail chain (one of the largest and fastest growing pharmaceutical cosmetic retail chains in the world with about 6,800 stores in 12 markets in Asia and Europe) was about to open stores in Vietnam. The store is located at a trade center in District 1, Ho Chi Minh City.
Ryohin Keikaku, the parent company of the retail brand MUJI, also said it had decided to establish MUJI Vietnam Co., Ltd. to develop its business in Vietnam. As planned, this company would be established in August, headquartered in Ho Chi Minh City and 100% owned by Ryohin Keikaku. The first MUJI store will be opened in early 2020 in Ho Chi Minh City.
Uniqlo - Japanese fast fashion brand - officially opened its first store in Vietnam in December 2019. This store has the largest scale in Southeast Asia with a sales floor of more than 3,100m2 located at Parkson Saigon Tourist Plaza (District 1, Ho Chi Minh City). Right on the opening day of the store, it attracted thousands of people lining up from early morning to noon waiting to buy products of this fashion brand.
After acquiring a series of brands such as Vien Thong A, Fivimart, GM Vietnam, Shop & Go, Queenland Mart, etc., VinGroup made many people believe that this group was preparing a plan to "dominate" Vietnam's retail industry. However, on December 3, 2019, VinCommerce General Trading Joint Stock Company (directly managing Vinmart, Vinmart + and a member of Vingroup) officially announced the merger into a subsidiary of Masan Group. Accordingly, VinCommerce, VinEco and Masan Consumer Holding will merge to form Vietnam's leading consumer goods and retail group.
According to these two businesses, this deal aims to optimize the strength of each party's operation with the ambition to create a new group of consumer goods - retail with outstanding competitiveness and leading scale in Vietnam. In addition to manufacturing, the new company owns a network of 122 VinMart supermarkets and 2,600 VinMart + stores in 50 cities and provinces. And yet, shortly after, Vingroup announced the dissolution of VinPro supermarket along with stopping the e-commerce site Adayroi.com, which would be merged into the VinID application.
Pure Vietnamese retailer Saigon Union of Trading Co-operatives (Saigon Co.op) continued to accelerate the chain opening speed in all models: Co.opmart, Co.op Food, Co.op Smile. In June, Saigon Co.op took over all 15 stores of Auchan supermarket as well as its E-commerce activities and online platforms.
In December, Saigon Co.op officially launched a new business model: Finelife supermarket. Target customers are the “premium” whose income is in the top A and B, and live in residential areas or apartments in large urban areas. This retailer also introduced Scan & Go application in some supermarkets and hypermarkets, and cooperated with Momo to deploy payment by Momo e-wallet at its stores.
Thai retailer MM Mega Market, after acquiring Metro Cash & Carry (licensed for wholesale operations), officially opened the first MM retail supermarket in Vietnam in Hanoi in December, 2019.
In July, Central Group (owner of Big C Vietnam system) opened a supermarket named GO! MARKET in Hanoi, which is the first market under this name in Vietnam. Earlier, in 2018, Central Group had launched the GO! Mall in My Tho (Tien Giang).
However, in 2019, the Big C system also got into trouble when it temporarily suspended the sales of garments of hundreds of Vietnamese suppliers. The case was only resolved when the Ministry of Industry and Trade worked with this retailer.
>> Industry forecast: inevitable trends of Vietnam's retail industry
Compiled by VietnamCredit