Retailers under pressure as more foreign peers predicted to come

Foreign retail businesses who came and introduced modern trade methods, technology together with professional management skills, have posed a big challenge to Vietnamese retailers.
Retailers under pressure as more foreign peers predicted to come ảnh 1Foreign retail businesses who came and introduced modern trade methods, technology together with professional management skills, have posed a big challenge to Vietnamese retailers (Photo: VNA)
HCM City (VNA) – Foreign retail businesses who came and introduced modern trade methods, technology together with professional management skills, have posed a big challenge to Vietnamese retailers.   

They have so far dominated Vietnam’s retail landscape through merge and acquisition (M&A), joint venture and foreign direct investment (FDI) activities.

Japanese retail giant Aeon bought 49 percent of Citimart’s shares and 30 percent of shares of Fivimart convenience stores. Meanwhile, conglomerate Lotte from the Republic of Korea acquired 70 percent of the Diamond Plaza shopping mall.

Thai retailer Berli Jucker Plc completed the purchase of Metro Cash & Carry Vietnam as part of its plan to become a leading player in the region. It also bought the Family Mart convenience store chain and changed its name to B’s Mart in 2013.

Another Thai retailer, Central Group, acquired 49 percent stake in NKT New Solution and Technology Development Investment Joint Stock Company, which owns Nguyen Kim, one of the largest electronics shopping centres in Vietnam. Apart from opening Robin Department Stores in Hanoi and Ho Chi Minh City, the group also owned Big C Vietnam after offering 920 million euros (1.05 billion USD) to France’s Casino Group.

France’s Auchan supermarket and Japan’s Seven Eleven have entered the Vietnamese market with five and nine stores, respectively.

Experts said that more foreign giants will continue to join Vietnam’s retail sector given the country is working to carry out its integration commitments.

Meanwhile, Vietnamese distributors are working hard to tackle their limitations in financial capital, purchasing power, infrastructure, professional workforce, and global ties.

Ho Chi Minh City is housing 207 supermarkets, 56 percent of which is owned by domestic retailers and the remainder by foreign rivals.

Nguyen Phuong Dong, Vice Director of the municipal Department of Industry and Trade, said that Vietnamese firms still hold advantages in the number of supermarkets and convenience stores with proportion of 79 percent and 70 percent.

However, sweeping solutions should be deployed by both local authorities and firms to protect domestic retailers from foreigners’ dominance as foreign distributors have sustainable supply of goods, said Le Thi Thanh Lam, Vice Chairwoman of Food and Foodstuff Association of Ho Chi Minh City.-VNA

VNA

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