Retailing market 2014: Lots of prospects

In Vietnam market, modern retailing channels account for 20% domestic retailing market, and still have ability to continue increasing, expected to rise to 40% in 2014.

Statistics of Vietnam Report from the Biggest 500 businesses in Vietnam 2013 show that retailing sector ranks the 6th in terms of Return on Assets (ROA).

Thi truong ban le viet nam

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AT Kearney Consulting (U.S.) forecasts retailing revenue in Vietnam may increase by 23%/year. This means that Vietnam retailing market has a lot of chances, especially when consumers have trends to purchase in supermarkets and modern shops.

Therefore, a lot of foreign retailers such as International Retail Group BigC, Metro, LotteMart, Takashimaya, Index Living Mall… have expanded their investments in Vietnam.

In addition, the corporation between NUTC FairPrice (Singapore) and Saigon Co.op launched two hypermarket chains with brands Co.opXtra and Co.opXtra plus. The expansion of system and service quality improvement of Co.opMart, HaproMart, FiviMart, Maximart, OceanMart, BigC, Vien Thong A, Fahasa, Nguyen Kim, Pico… is a prove for the special attraction of Vietnam retail market in next time.

Positioning domestic businesses

Domestic businesses have faced with competitive pressure from foreign competitors having advantages in capital and management competence. However, this pressure still has a positive impact on the market that has not been fully exploited in Vietnam. It forces domestic businesses to invest, to adapt to change. The more competitive the market is, the more types of products and services will become professional and profitable for purchasers.

Although the retail market share of foreign businesses accounts for nearly 70% total revenue in 2013, domestic businesses have gradually developed in both quality and quantity to position in the country.

Mr. Nguyen Thanh Nhan, Director of Co.opmart supermarket chain, said domestics businesses in Vietnam retailing sector have dramatically changes in operation model in order to improve their positions in domestic market.

An example for this is Saigon Co.op. Now it has developed 69 supermarkets nationwide (including 27 ones in Ho Chi Minh City and 42 in provinces). Revenue in recent 2 years has had an average growth at 20%.

Besides, in order to diversify retailing activities, Co.op mart has had a plan to develop retail channel thorough the country to bring Vietnamese products directly to consumers, including remote areas. Improving service quality and convenience for customers is what Co.op mart retailing system put at the first priority.

Apart from expanding the supermarket system,  Co.op mart has also applied modern types of sale to facilitate consumers such as implementing a number of online marketing tools - typically launching a Fanpage of Co.opmart; television shopping, internet or telephone shopping; delivery service, etc…

In the field of culture, Fahasa is emerged and known as the biggest publisher in the country specializing in providing and publishing cultural products with sales of over VND 1,500 billion, is in the Top500 leading retailer in Asia and Top10 leading retailer in Vietnam, and has 56 book stores nationwide.

According to Mrs. Nguyen Thi My Loan, Deputy General Director of Fahasa; however, in order to develop retailing channel sustainably, domestic retailers should improve their serve and marketing activities apart from investing in expansion and extension of distribution system to influence the purchasing decisions of consumers.

In line with Vietnam’s commitment to WTO, from 11 January 2015, foreign retailers are allowed to establish an 100% foreign owned business in Vietnam instead of the maximum of 50% as current regulation. It seems that it couldn’t be more appropriate time for domestic retailers to adapt their business strategy to attract customers and increase market share other than this time, when the year 2014 has just begun.