Foreign firms heat up domestic retail market

France-based Auchan, one of the world’s largest hypermarket chains, plans to invest 500 million USD over the next decade in Vietnam, after many years absent from the country.

Economists have described the group’s return as tinder that fuels the country’s hot retail market.
France-based Auchan, one of the world’s largest hypermarket chains,plans to invest 500 million USD over the next decade in Vietnam,after many years absent from the country.

Economists have described the group’s return as tinder that fuels the country’s hot retail market.

Founded by Gerard Mulliez, one of the wealthiest people in France ,Auchan has presence in 15 countries across the world and is expanding inChina, Russia and Eastern Europe, according to Business Week.

Earlier this year, E-mart, a subsidiary of Shinsegae –one of the leading retailers of the Republic of Korea (RoK),partnered with U&I Group in southern Binh Duong province to set up ajoint retail venture in Vietnam worth 80 million USD.

The RoK group expects to establish 52 supermarkets and outlets by 2020 with total investment amounting to 1 billion USD.

E-mart Sales Director Ja Young Heo describes Vietnam as an idealdestination for RoK investors, especially in the fields of retail,logistics and household utensils.

Last year, the groupimported over 7.88 million USD worth of products from Vietnam, shesaid, noting that the group’s online sales turnover in Vietnamreached 89 million USD in 2012.

Last year also saw an influx of investment from Japanese companies Aeon and Takashimaya.

Aeon is building Celado Shopping Mall, which will be the largesthypermarket in Ho Chi Minh City , and another hypermarket in BinhDuong province at the same time.

The group has also worked with Trung Nguyen Group to set up 13 Ministop convenience stores in HCM City.

Takashimaya, a leading Japanese retailer, will operate on a site of 15,000 square metres in the Saigon Centre in 2015.

Other retailers that have gained a firm foothold in Vietnam suchas Metro Cash & Carry, Big C and Lotte are also devising plans toexpand their operations in the country.

With 17commercial centres running successfully in Vietnam over the past tenyears, Metro strives to open another 30-35 stores in the next 3-5years.

Domestic firms are also seeking ways tocompete in the modern retail market, which is traditionally dominated byforeign groups.

Co.opmart has joined hands withNTUC FairPrice of Singapore to establish a chain of hypermarkets calledCo.op Xtra Plus in Ho Chi Minh City.

According toSaigon Co.op General Director Nguyen Thi Hanh, the move marks animportant milestone in the group’s retail market development strategy.

Maximart, which has been operating in Vietnam for 17 years, is also working with Dairy Farm of Hong Kong.

Sharing successful experiences in Vietnam, foreign firms placespecial emphasis on geographical location, advantages in business andstrong partners.

Vietnam now has 717 modernretail outlets and 8,600 traditional markets. However, the percentage ofretail stores in the country remains below 20 percent, much lower thanthat it other countries in the region such as Indonesia , Thailand ,Malaysia and China.

The Ministry of Industry andTrade expects that by 2020, the country will have 1,200 supermarkets,157 shopping centres and 180 trade centres.

Registering a growth rate of 14.8 percent in 2007-2012, the country’spurchasing power was forecast to attain a value of 89.7 billion USD byearly this year.

In 2013-2015, retails revenues are forecast to grow 8.5 percent a year averagely.-VNA

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