Illustrative image (Photo: VNA)Le Hoang Long, manager of Nielsen Vietnam’s retail chain consulting, said the COVID-19pandemic has boosted online shopping and more consumers would choose to shoponline even after the pandemic ends.
“The modern trade channel saw strong evolution last year due to new addedchains.”
As of December there were around 8,500 stores nation-wide, including 453supermarkets and 5,566 minimarts with the rest being convenience, health andbeauty, drug, and cash & carry stores, he said.
There is a fierce competition in the retail market, and so each chain has toidentify its strengths to retain competitiveness, he said.
“Supermarkets should embrace the model of shopping associated withentertainment. That is the strength of supermarkets compared to others such asminimarts and convenience stores.”
He said the customer base is changing, with an increase in the number of customersaged between 50 and 65.
“Therefore, supermarkets must make changes in terms of services and goods tomeet the needs and experiences of this emerging customer group.”
According to the Ministry of Industry and Trade, average retail sales and consumerservices revenue per capita increased from 19.3 million VND in 2010 to 51.2million VND in 2019, accounting for 8 percent of GDP.
E-commerce, supported by electronic payment, has grown especially strongly inrecent years, averaging over 27 percent growth, it said.
Nguyen Phuc Khoa, deputy general director of the Saigon Trading Group (Satra),said, “The modern retail market in Vietnam has great potential for development,mainly thanks to its large population size, a high ratio of young people and anaverage annual increase of 10.5 percent in household spending.”
The number of internet users reached 68.17 million last year, with more than145 million mobile devices connected, which would fuel the growth of onlinebuying, he said.
“Vietnam’s retail market has great potential but not everyone can grasp theopportunity.
“Some big brands like Auchan, Parkson and Shop&Go pulled out of the marketcompletely or contracted their network, which shows it is not an easy market.”
He also mentioned other difficulties facing the retail market.
“Commercial infrastructure is developed but is still weak and out of date insome areas. Retail commercial infrastructure such as markets, supermarkets,commercial centres, convenience stores, and specialised stores have increasedrapidly, but are mainly concentrated in cities and towns.
“E-commerce infrastructure has not developed comprehensively, and there is alack of connectivity and support services for e-commerce such as payment andlogistics infrastructure.”
Long said retailers have actively adopted new technologies and tied up withe-commerce platforms and cashless payment solution providers to offer moreconvenience and new services to shoppers.
As a leading consumer retailer, Saigon Co-op would in 2021 continue to embracedigital transformation to adapt to the changing market and consumer behaviour,Nguyen Anh Duc, its general director, said.
Private label products
“Private label products offer a great competitive advantage to retail chains,”Long said, adding that consumers prefer them.
In countries with developed modern trade channels such as the EU, revenues fromprivate label products account for 40 percent while the global average is 16.5percent.
The ratio of private label products in Vietnam remains modest, offeringretailers the opportunity to exploit this segment, he added./.
VNA
