Vietnam’s retail sector is forecast to be stable in the coming years (Photo: VNA)Hanoi (VNA) - Vietnam’s retail sector is forecast to be stable inthe coming years, attracting investment from many foreign enterprises thank toits large population, brighter economic outlook and greater purchasing power.
This was announced by experts participatingin a survey of Vietnam Report Company (VNR), released in Hanoi on October 31.
Another study by HSBC, titled "ASEANConnected 2016", showed that Vietnam’s middle class has the fastest growthrate in Southeast Asia and is expected to increase to 33 million by 2020.
Consumer spending is on the rise thanks toan increasingly open economy with rising employment, business and incomeopportunities. Vietnam is currently ranked the sixth largest economy in theASEAN region, following Singapore, Malaysia, the Philippines, Indonesia andThailand.
The General Statistics Office said Vietnam’sretail revenue in 2016 increased by 10.2 percent, faster than the 9.8 percentin 2015. According to the Trade Research Institute under the Ministry ofIndustry and Trade, in the 2016-20 period, Vietnam’s retail trade growth ratewill reach 11.9 percent per year and market size will be some 179 billion USD by2020.
In addition, the Government’s permission toforeign retailers to establish businesses with 100 percent foreign capitalsince 2015 has made Vietnam one of the world’s leading investment attractions,especially in the field of modern retail.
In recent years, large developers such asAeon (Japan), Lotte (the Republic of Korea) and Central Group (Thailand) haveexpressed great interest, gradually expanding their presence through M&Adeals and announcing long-term plans for the market.
However, the local retail market has seenfierce competition and domestic firms have been forced to adopt new strategiesto maintain market share and improve their reputation to compete withinternational competitors who have superior advantage in terms of capital,technology, experience and personnel.
The demand of consumers in the future isexpected to change significantly (towards high quality products with smarterspending), which is also a difficult issue for retailers. Retailers need to payattention to product diversification to meet the needs of different customergroups.
According to VNR’s online survey, themajority of consumers said diversification of goods was what attracted them tocertain retailers.
Retailers are changing the way they sellgoods -- from traditional to modern and online channels -- to serve growingconsumer needs. Targeting the customer and developing a compatible businessstrategy requires retailers to invest a lot of resources. However, with properinvestment, retailers can take advantage of opportunities, build and protecttheir reputation, thereby attracting customers and indirectly improvingbusiness results in the future.
This was VNR’s assessment, under its VietnamRetail Sector 2017-20 Research Project Phase 1.
As part of retail industry research, thetop 10 most reputable retailers ranking is built on three main criteria --financial capacity, media credibility and online survey.
Accordingly, Big C, Vinmart and Co.op Martare three most frequently mentioned retailers. Saigon Co.op is known as theretailer with the largest supermarket chain in Vietnam but is concentratedsignificantly on developing in the South, while Big C is expanding its brand inall three regions and developing equally. Vinmart, a new entrant, is developingimpressively, opening hundreds of convenience stores and dozens of supermarketsin just over two years after entering the market.
In the section of durable goods, such aselectronics, refrigeration and jewellery, there are a number of big names suchas Dien May Xanh (25 percent), Nguyen Kim (17 percent) and PNJ (13 percent) inconsumers’ minds. In 2017, the race of retailers in electronics, gold andprecious stones in particular and the durable goods market in general hasbecome fiercer. Several companies have implemented plans to expand the market,opening more sales points in many provinces and cities in Vietnam.-VNA
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