15:10 | 29/04/2016 Economy- Society
(VEN) - Together with sales of around US$102 billion in 2015, the Vietnamese retail market is forecast to achieve good growth in the coming years and foreign investors will continue to enter the market. In addition to opportunities, domestic retail businesses will face more difficulties due to fiercer competition from foreign retailers.
The Vietnamese retail market is forecast to achieve good growth in the coming years
Vietnamese shopping centers, supermarkets and stores currently account for 25 percent of market share. This figure is low compared to 33 percent in the Philippines, 60 percent in Malaysia, 34 percent in Thailand, 90 percent in Singapore and 51 percent in China.
The VietinBank Securities Company’s Research Center Deputy Director Dang Tran Hai Dang said that the Vietnamese retail market reached around US$102 billion in sales in 2015 and is expected to increase to US$179 billion by 2020.
The Vietnamese market is an attractive destination in the eyes of foreign retailers. Many large groups such as the Republic of Korea’s Lotte and Emart, Japan’s Aeon Mall, Thailand’s BJC and Power Buy have increased their presence in the market in recent years. For example, Aeon Mall bought a 49 percent stake in Citimart and 30 percent in Fivimart.
In addition to free trade agreements promoting investment and trade activities, Vietnam is opening the doors with policies to loosen foreign ownership regulations against listed and unlisted firms.
Domestic businesses will be compelled to improve their services to strongly develop in the coming time. Having a thorough knowledge of the domestic market and large distribution network is seen as an advantage. However they lack management skills and capital to compete with foreign retailers.
GfK Retail and Technology Market Research Vietnam Limited’s Retail Department Director Huynh Phuoc Cuong said that opportunities for domestic retailers remained huge. However foreign retail businesses with larger capital and deep-rooted experience will be a major challenge. Therefore, improving service quality is seen as an important factor in the current context.
Mobile World Investment Corporation Chairman and CEO Nguyen Duc Tai said that opportunities are equally pided among everyone. Domestic businesses must develop more effective management and human resources to compete with foreign retailers.
GfK Retail and Technology Market Research Vietnam Limited’s Retail Department Director Huynh Phuoc Cuong said that foreign groups have actively searched for opportunities to participate in the Vietnamese retail market through mergers and acquisitions. Along with opportunities, Vietnamese retailers will also face the risk of being acquired by foreign partners.