Retail sector sees foreign-Vietnam M&A

The Vietnamese retail market has seen some mergers and acquisitions (M&A) between foreign and Vietnamese enterprises.

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As part of its commitment to join the World Trade Organisation, Viet Nam has allowed the establishment of 100 per cent foreign retail companies since 2015. Viet Nam's membership of the ASEAN Economic Community officially operate since 2016 will allow goods, financial resource, human resource and material… freely move during the Community. Besides, thanks to the Trans-Pacific Partnership Agreement, more than 10,000 kinds of goods from 12 member countries at zero tariffs will flowed to Vietnam boosting the development of Vietnam retail market.

In this context, the current modern retail channel of supermarkets and stores account for only 25 per cent of the market share in Viet Nam, much lower than in the regional countries, such as 33 per cent in the Philippines, 34 per cent in Thailand, 51 per cent in China, and 60 per cent in Malaysia, besides 90 per cent in Singapore. It is foreseen that, Vietnam will increase the modern retail channel of supermarkets and store up to 45%. Therefore, Vietnam retail market could be regarded as productive land to invest.

The local retailers that run modern shopping channels are Co-opmart with 77 supermarkets, Fivimart with 20 supermarkets in Ha Noi, Citimart with 27 supermarkets, and Hapro with more than 20 stores.

Thai retailer Berli Jucker, which acquired Metro Cash & Carry in Viet Nam, has announced plans to buy French retail casino group Casino Viet Nam, which owns more than 30 Big C supermarkets across the country.

Not only did foreign retail giants use M&A to enter the local retail market, local firms such as real estate developer Vingroup did the same. Vingroup has made consecutive M&A deals in the retail sector so far. It bought the Ocean Mart in 2014, renamed it Vinmart and expanded the chain. Then it bought 100% shares of Vinatextmart from the Viet Nam Textile and Garment Group, ending up with 39 Vinatextmarts in the country.

The group has also bought an 80 per cent stake in Hop Nhat Company, renaming it Vinlinks, and using it as the delivery for Vingroup's retail segment.

                                                                                                Source: VGP news