Vietnam’s retail market has seen fierce competition as both domestic and foreign brand names have striven to search for expansion, according to Dinh Thi My Loan, general secretary of the Vietnam Retailers Association.
Loan said Vietnam’s retail market had 21 wholly foreign invested businesses which had rapidly expanded their market share. In addition, modern retail channels, including hypermarkets, supermarkets, and small self-service stores, accounted for only 20 percent of the market, leaving big opportunities for businesses.
Vietnam has targeted to increase the percentage of modern retail channels to 45 percent by 2020. By the end of last year, the country had 130 commercial centers, 700 supermarkets, and more than 1,000 self-service stores. Many foreign brand names now have a presence in the country such as Big C, Metro, and Lotte.
Nguyen Thi Hanh, general director of Sai Gon Co.op told Vietnam Investment Review the current trend in Vietnam is to develop hypermarkets and shopping malls together with traditional supermarkets.
With a staggering year-on-year retail growth record already in the books, Vietnam is certainly poised to more than double its retail channels in the next 7 years. The massive opportunity, fueled by an emerging middle class and change in lifestyle, has certainly caught the eye of the world’s largest, most progressive retail brand owners.
Since foreign brands have set the bar so high, it’s going to be a huge challenge for smaller domestic businesses to stay competitive.
They should increase connections with producers and distributors to provide professional services as they prepare to face fierce competition.