Foreign Players Gain Wider Presence in Vietnam’s Retail Field

Foreign retailers are gaining increasing shares in Vietnam’s retail market, according to a report.


       Foreign players are gaining wider foothold in Vietnam's retail market. Photo: Brandview.com

Overseas players are occupying larger portions in the retail market in Vietnam, where the middle income and wealthy class is projected to reach 33 million by 2020, or one third of the population, compared to 12 million in 2012, thanks to a fast-growing economy.

According to a recently-released report by the Ministry of Industry and Trade, foreign retailers occupied a share of 70% of retail sales via convenience stores and 17% of the sales at trade centers last year.

In addition, their shares at mini-stores stood at 15% while a half of online sales is dominated by overseas players.

Domestic retailers are facing stiffer competition from foreign peers who have been growing in number and providing cheaper and higher quality goods, the report noted.

The presence of Made-in-Vietnam goods at foreign-controlled supermarkets is narrowing at their owners are putting on shelves goods of their own brands, it added.

A large number of foreign retail giants either have been landing on Vietnam or plan to enter this market soon as the country lowers barriers for goods from nations it has signed free trade agreements with.

Last year, Berli Jucker (BJC), a subsidiary of Thailand’s TCC Holding, acquired Metro Cash & Carry for 655 million euros ($879 million). BJC earlier bought out the Family Mart chain, owned by a joint venture between Phu Thai Corp and Japan’s Itochu, and renamed it B’s mart.

Joining the M&A spree, Central Group, also from Thailand, purchased the Big C grocery chain, for 1.05 billion euros. The group in 2015 spent some $100 million to acquire a 49% stake of Nguyen Kim Trading, a leading electronics retailer in Vietnam.

Retail sales of goods in Vietnam increased 10.2% year-on-year to 2,670 trillion dong ($118 billion) last year. Sales of the food and foodstuff group grew 13.6% while the growth of household appliances was 11.4%.

Sales of e-commerce were estimated at $5 billion in 2016, more than doubling $2.2 billion recorded for 2013, according to the report.

Tuan Minh / BizLIVE