Central Retail, Thailand's largest retailer, plans to invest some 50 billion Thai baht (US$1.45 billion) in Vietnam over a five-year period to boost its local operations.

A customer buys oranges at GO! Thang Long supermarket in Hanoi. Photo: Hoai Nam/The Hanoi Times

Thai company could increase the number of retail stores in Vietnam to 600 with two million square meters of floor space in 57 provinces and cities by 2027.

From 2012-2022, the retailer invested more than 10 billion Thai baht (US$290 million) in expanding its business in Vietnam.

It operates 340 stores with a total floor area of 1.2 million square meters in 40 provinces and cities nationwide.

In 2014-2021, the company's sales increased significantly in Vietnam from 300 million baht ($8.7 million) to 38.6 billion baht ($1.1 billion).

According to Central Retail's CEO Yol Phokasub, Vietnam is a potential market as the country has maintained constant economic growth in recent years.

It values the Vietnamese retail sector at about US$49.7 billion and forecasts average annual growth of 10-12%.

The retailer also projects that sales in cities and urban areas will account for 13% of its total revenue in 2027, up from 8% in 2016, as Vietnam is undergoing a strong urbanization.

In addition, Central Retail forecasts that international visitor arrivals to Vietnam will increase to the pre-pandemic level of 19 million in 2023 and 21 million in 2025.

Olivier Langlet, CEO of Central Retail Vietnam, attributed the positive outlook for the Vietnamese economy to its continued expansion amid global uncertainty.

He expected Vietnam's economy would grow 6.7%-7.2% in 2023 and 2024, which is high in comparison to Thailand's average growth rate of 3.5% during the same time.

He said that such a growth pace will make Vietnam the fastest-growing economy in Southeast Asia.

The Thai enterprise plans to expand food sales in Vietnam and strengthen its leading status in the Vietnamese supermarket industry.

Central Retail, in March 2021, renamed its supermarket chain BigC to GO! and increased the number of Tops market and Mini go! Outlets by 8-10 stores.

Central Retail Vietnam's CEO Olivier said the company targets to set up a customer-friendly business, improve the quality of services, and increase the number of transactions from 66 million deals recorded in 2022.

Strong retail market recovery

According to the Ministry of Industry and Trade, the Vietnamese retail sector will be valued at US$350 billion in 2025, and retail sales will account for 59% of the State budget revenue.

According to the General Statistics Office (GSO), total sales of goods and services in 2022 gained two-fifths on-year to nearly VND5.7 quadrillion (US$240 billion). In January 2023, the figure was VND544.8 trillion (US$23 billion).

Retail expert Vu Vinh Phu said the sector had reached its pre-pandemic level after showing signs of slowing down because of the pandemic.

"Increasing income, recovery of the tourism sector, the rebound of economic activities such as transportation, and inflation control are having good impacts on the retail sector," he said.

Tran Duy Dong, Director of the Domestic Market Department under the Ministry of Industry and Trade, said that the ministry encourages the development of a shared economy, night economy, tourism, circular economy, and e-commerce, as well as modern distribution channels.

"The ministry will also work with the Ministry of Agriculture and Rural Development to stabilize the market prices and ensure the quality and origin of products by international standards," said Dong.