Vietnam’s retail market: Growing trend of convenience stores and minimarts
In 2017, the Vietnam’s retail market is back to the 6th rank in top 30 world’s most attractive retail markets.
Along with this is the increasing presences of convenience store, minimarts and the focus on technology investment. With the GDP amounts to 220 billion USD, population of 92 million at the golden age, Vietnam is becoming a high potential retail market. According to the Global Retail Development Index (GRDI) released by the A.T Kearney market consulting firm (US), Vietnam for many years has been in the top 30 world’s most attractive retail market since 2008, and has recently back to the 6th rank in 2017.
Convenience stores and minimarts are the fastest growing segment in Vietnam.
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Especially, according to the A.T Kearney report, convenience stores and minimarts are the fastest growing segment in Vietnam. As of present, Family Mart has 100 stores and is expected to have 800 stores by 2020. 7-Eleven of Japan is planning to open 100 stores in the next 3 years and 1,000 stores in 10 years. For Vinmart+, this chain is expected to increase from 1,000 stores in 2016 to 2,500 stores in the end of 2017.
The growth rate of convenience stores and minimarts in recent years have been impressive. According to the study of Kantar Worldpanel in previous year, there are more than 1/3 households in Vietnam has shopped in convenience stores or minimart for once, and with the frequency of 10 times per year. Nielsen showed that the growth rate of modern distribution channels from April 2016 to March 2017 is 7.7%, higher than the growth rate of 6.1% of the traditional distribution channels; the growth rate in value of modern distribution channels are 6.3%, more than 1.34 times of traditional distribution channels.
Despite this segment has been fast growing, it has been under pressure, such as from super markets with excellent shopping experience, diversified goods, while from traditional markets with convenient factor. In reality, modern retail in Vietnam has been slowing down compared to previous forecast, which contributed to 25% of the total retail sector. High rental fee, expensive product price and the customer habit of shopping in traditional markets are reasons why customers still hardly go to convenience stores and minimarts, which require retailers to develop appropriate investment strategy to develop this segment.
At present, the trend of industrial revolution is growing around the world, which set up the requirements for innovation and improving production methods for corporation and enterprises, or face the risks of being left behind in competition. As such, finance is not the only segment required investment, but also technology. Even a small enterprise is planning to invest in technology to increase efficiency in management, which lay the foundation for better growth. The Gioi Di Dong, one of the top 10 retailers of Vietnam in 2017, has spent 13 years to build a modern management system, which is considered as the knowhow for the company to operate a retail system with 1,500 super markets in 63 provinces/cities with 31,000 staffs and 4 separate brands.
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