Illustrative image (Photo: VNA)Hanoi (VNA) - Catching up with new retail trends to bring a newshopping experience to customers will help Vietnamese retailers seize the lion’s share of the market, especially after a numberof foreign players have shut up their shops, according to insiders.
Domestic retail market heating up
An expandingmiddle class and higher incomes will see Vietnam’s retail and services revenuerise 1.6-fold against 2020 to 350 billion USD by 2025. The country’s retailmarket is therefore thought to have become an attractive destination forforeign investors.
Posting solid growth of 6.8 percent last year amid COVID-19, the local market hasconsiderable potential but is marked by fierce competition that requires companiesdevelop sensible retail sales models to win customers.
Vietnam’s retail market has witnessed substantial changes in market share over recent years, with an array of merger and acquisition (M&A)deals clinched. Most recently, on March 1, retail chain Big C, thelong-standing supermarket chain run by Thailand’s Central Group, had its brandidentity changed to Tops Market and Go! after 22 years in Vietnam. Last year,the Republic of Korea’s largest supermarket chain, Emart, decided to pull outof Vietnam after five years of trying to expand its network since it opened the firstoutlet in HCM City.
Five years ago, foreign investors held more than 50 percent of the market share.Domestic retailers are now gaining the upper hand, however, scaling up outlets nationwide.
According to the Ministry of Industry and Trade’s Domestic Markets Department,Vietnam has some 1,085 supermarkets, 240 shopping malls, and nearly 2,000convenience stores, 70-80 percent of which are operated by Vietnameseretailers. In the past, local companies made efforts to consolidate theirmarket share in large cities and provinces while working to expand ruralmarkets. Experts described this strategy as sensible, since it meets customerdemand.
Appropriate retail sales models needed
Vietnamese retailers should develop retail sales models that are suitable fortheir target markets, experts have said, explaining that this is a decisivefactor in success.
The local retail market changed dramatically in 2020, especially consumershopping habits, and these changes are here to stay.
E-commerce is expected to boom this year as more consumers have moved to shoppingonline due to COVID-19. According to the Ministry of Industry and Trade’sE-Commerce and Digital Economy Agency, online retail sales reached nearly 12billion USD in 2020, a year-on-year increase of 18 percent, or 5.5 percent ofthe country’s total retail sales and services revenue.
Local firms need to develop multi-channel retailing to meet the diverse demandsof customers. They should also take advantage of technology to gain a competitiveedge over their foreign rivals./.
Five years ago, foreign investors held more than 50 percent of the market share.Domestic retailers are now gaining the upper hand, however, scaling up outlets nationwide.
According to the Ministry of Industry and Trade’s Domestic Markets Department,Vietnam has some 1,085 supermarkets, 240 shopping malls, and nearly 2,000convenience stores, 70-80 percent of which are operated by Vietnameseretailers. In the past, local companies made efforts to consolidate theirmarket share in large cities and provinces while working to expand ruralmarkets. Experts described this strategy as sensible, since it meets customerdemand.
Appropriate retail sales models needed
Vietnamese retailers should develop retail sales models that are suitable fortheir target markets, experts have said, explaining that this is a decisivefactor in success.
The local retail market changed dramatically in 2020, especially consumershopping habits, and these changes are here to stay.
E-commerce is expected to boom this year as more consumers have moved to shoppingonline due to COVID-19. According to the Ministry of Industry and Trade’sE-Commerce and Digital Economy Agency, online retail sales reached nearly 12billion USD in 2020, a year-on-year increase of 18 percent, or 5.5 percent ofthe country’s total retail sales and services revenue.
Local firms need to develop multi-channel retailing to meet the diverse demandsof customers. They should also take advantage of technology to gain a competitiveedge over their foreign rivals./.
VNA
