Vietnam’s retail sector is forecast to be stable in the coming years (Photo: VNA)
Hanoi (VNA) – Vietnam’s retail sector is forecast to be stable in
the coming years, attracting investment from many foreign enterprises thank to
its large population, brighter economic outlook and greater purchasing power.
This was announced by experts participating
in a survey of Vietnam Report Company (VNR), released in Hanoi on October 31.
Another study by HSBC, titled “ASEAN
Connected 2016”, showed that Vietnam’s middle class has the fastest growth
rate in Southeast Asia and is expected to increase to 33 million by 2020.
Consumer spending is on the rise thanks to
an increasingly open economy with rising employment, business and income
opportunities. Vietnam is currently ranked the sixth largest economy in the
ASEAN region, following Singapore, Malaysia, the Philippines, Indonesia and
Thailand.
The General Statistics Office said Vietnam’s
retail revenue in 2016 increased by 10.2 percent, faster than the 9.8 percent
in 2015. According to the Trade Research Institute under the Ministry of
Industry and Trade, in the 2016-20 period, Vietnam’s retail trade growth rate
will reach 11.9 percent per year and market size will be some 179 billion USD by
2020.
In addition, the Government’s permission to
foreign retailers to establish businesses with 100 percent foreign capital
since 2015 has made Vietnam one of the world’s leading investment attractions,
especially in the field of modern retail.
In recent years, large developers such as
Aeon (Japan), Lotte (the Republic of Korea) and Central Group (Thailand) have
expressed great interest, gradually expanding their presence through MA
deals and announcing long-term plans for the market.
However, the local retail market has seen
fierce competition and domestic firms have been forced to adopt new strategies
to maintain market share and improve their reputation to compete with
international competitors who have superior advantage in terms of capital,
technology, experience and personnel.
The demand of consumers in the future is
expected to change significantly (towards high quality products with smarter
spending), which is also a difficult issue for retailers. Retailers need to pay
attention to product diversification to meet the needs of different customer
groups.
According to VNR’s online survey, the
majority of consumers said diversification of goods was what attracted them to
certain retailers.
Retailers are changing the way they sell
goods — from traditional to modern and online channels — to serve growing
consumer needs. Targeting the customer and developing a compatible business
strategy requires retailers to invest a lot of resources. However, with proper
investment, retailers can take advantage of opportunities, build and protect
their reputation, thereby attracting customers and indirectly improving
business results in the future.
This was VNR’s assessment, under its Vietnam
Retail Sector 2017-20 Research Project Phase 1.
As part of retail industry research, the
top 10 most reputable retailers ranking is built on three main criteria —
financial capacity, media credibility and online survey.
Accordingly, Big C, Vinmart and Co.op Mart
are three most frequently mentioned retailers. Saigon Co.op is known as the
retailer with the largest supermarket chain in Vietnam but is concentrated
significantly on developing in the South, while Big C is expanding its brand in
all three regions and developing equally. Vinmart, a new entrant, is developing
impressively, opening hundreds of convenience stores and dozens of supermarkets
in just over two years after entering the market.
In the section of durable goods, such as
electronics, refrigeration and jewellery, there are a number of big names such
as Dien May Xanh (25 percent), Nguyen Kim (17 percent) and PNJ (13 percent) in
consumers’ minds. In 2017, the race of retailers in electronics, gold and
precious stones in particular and the durable goods market in general has
become fiercer. Several companies have implemented plans to expand the market,
opening more sales points in many provinces and cities in Vietnam.-VNA