09:31 | 29/07/2019 Trade
(VEN) - Saigon Co.op recently took over 15 retail outlets, an e-commerce site and more than 200 employees of Auchan in Vietnam. Before that, Vingroup acquired 87 Shop&Go convenience stores. These deals show the development potential of Vietnamese retailers.
A decade ago, Vietnam opened the domestic retail market to foreign investors in keeping with its international integration commitments, despite fears that foreign companies with strong financial capacity and marketing experience would overwhelm domestic retailers. These concerns have now turned to hope and pride.
Ministry of Industry and Trade data show that total retail sales of goods and revenue from services increased 10.5-10.9 percent annually from 2015-2017 and reached nearly VND4,400 trillion in 2018, up 11.7 percent compared with 2017. In the first six months of 2019, the result was more than VND2,391 trillion, up 11.48 percent compared with the same period last year.
Many foreign retail giants have given their market share to domestic retailers. Saigon Co.op has taken over all operations of the French-based Auchan group; and Vingroup has acquired 87 Shop&Go convenience stores.
Attesting to this trend, a Shop&Go spokesperson said while the potential in the Vietnamese retail market is still great, “the competition is more intense than we imagined; that is why we’ve decided to leave. We have sold our stores to Vingroup so it can continue to develop them.”
Dinh Thi My Loan, President of the Vietnam Retailers Association, said there was concern in the past that modern retail stores would push out traditional small-scale shops. However, small traders and traditional retail channels have successfully competed with modern retailers to carve out their market niches, currently holding an 80 percent market share of the domestic retail market.
Studies by Kantar Vietnam, a market research company, show that many consumers like such shopping option variety, including internet applications, requiring retailers to develop different retail channels to meet consumer demand.
Consumers can seek information about products on the internet and buy from shops, or vice versa. They will choose suitable retail channels for a better and more convenient shopping experience. With this in mind, Vinmart has launched its Scan&Go virtual store model to meet consumer demand.
According to retail sale expert Vu Vinh Phu, information technology application will help retailers increase labor productivity and change shopping habits. In his opinion, retailers should be aware of this to apply advanced technologies in business management.
Retail sale expert Vu Vinh Phu: The coming period will be a time of multi-channel sales, including direct selling,
online sales, shopping malls, and selling goods combined with services such as entertainment, food, beverage and