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The golden age of supermarts
Vietnam, for the first time, has become the most attractive retail market in the world, topping AT Kearney’s GRDI ranking.
Retail system needs to be upgraded
The three factors that create the attractiveness of Vietnam’s retail market are high economic growth rate (8% in the last few years), moderate competition among retailers, and abundance of young consumers (65% of the population) ready to spend a lot of money to satisfy their needs.
In 2007, Vietnam ranked fourth in AT Kearney’s ranking of the most attractive retail markets in the world, which the group began announcing in 2001.
In 2007, the total retail turnover was over $45bil. If the average growth rate of 20%, which was seen in the last few years, can be maintained in 2008, Vietnam will have the gross retail turnover of $54bil this year.
The Ministry of Industry and Trade has drawn up a project on raising the proportion of retailing via modern trade forms (supermart, trade centres and convenience stores) to 20% by 2010 and 60% by 2020.
Realising the high growth rate of the retail market, investors are injecting money in building more and more supermarts. It seems that supermart and trade centre projects are underway in all cities and provinces.
In 2005, according to the Ministry of Industry and Trade, Vietnam had 200 supermarts, 30 trade centres and nearly 1,000 convenience stores in 30/64 provinces and cities. The number of supermarts had doubled by April 2008, and it is estimated that by 2010, Vietnam will have 700-750 supermarts, 150 big-scale trade centres and tens of thousands of convenience stores.
The age of supermarts
By May 2008, Vietnam had over 10 supermart chains owned by domestic investors. All of the supermarts have been flourishing with the growth rate of 30-45% per annum. Each of the supermart chains has 5-30 trade points on average, and they are trying to enlarge the coverage in localities.
The supermart network in Vietnam which has the biggest turnover is Co-op mart with 30 supermarts and 100 self-service stores. Nguyen Ngoc Hoa, General Director of Saigon Co-op, said it will have 50 supermarts by 2010 and 100 supermarts by 2015.
Vinatextmart is the second-biggest supermart chain with 45 operational supermarts. Nguyen Thi Hong Huong, Vinatextmart General Director, said that there will be 80 supermarts in the chain by 2010.
Hapro, which now has 11 supermarts, 16 convenience stores, will have 5 hypermarkets and trade centres, 70 supermarts and 800 convenience stores by 2010.
Phu Thai retail group has announced a plan to develop 100 supermarts, 5,000 wholesale agents and 50,000 retail shops nationwide.
Hoa of Co-op mart chain in the south said that in the current conditions, it is more and more difficult to find big and suitable premises to set up supermarts. In order to have 50 more supermarts in two years, Co-op is trying to open new supermarts in the east of the southern region, western provinces, central region and in the north. After opening Co-op supermarts in the central city of Hue, the network will march towards Da Nang and Hanoi.
Meanwhile, Fivimart Hanoi is trying to find opportunities in the south. Nguyen Thi Ha, General Director of Fivimart, said that investors have only several more years to develop the supermart chains before giant retailers jump in. If domestic investors hesitate to open new supermart chains, they will lose their positions in Vietnam’s market. It is now the time of supermarts.
VNN
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