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Foreign retailers increase presence in Vietnam
Many foreign distributors are eagerly implementing their plans to expand their operations in the promising Vietnamese market at a time when the country is preparing to fully open its retail market in January 2009, pursuant to the WTO’s commitments.
One of Japan ’s five largest electronics retailers, Best Denki, is preparing to establish a joint venture in Vietnam in November.
The group has previously selected Ben Thanh Marketing Company, which owns the group’s Best Carings brand, as its partner for franchising.
According to Best Denki’s Singapore-based Regional Marketing and Business Development Director C. J. Raj, the group has plans to open 10 more electronics supermarkets in several big cities in Vietnam , in addition to the current ones in Hanoi and the southern city of Can Tho . The move is aimed at winning 5 percent of Vietnam ’s electronics market, which is worth a total of 3 billion USD annually, by 2012.
Vietnam ’s largest foreign distributor, Metro Cash & Carry, was granted permission to open its ninth outlet in Bien Hoa city in the southern province of Dong Nai in August. The group has announced plans to open a further 12 outlets in Vietnam .
Since it began operations in Vietnam six years ago, Metro Cash & Carry has invested 120 million USD in eight wholesales centres across five cities and provinces.
The Republic of Korea (RoK)-based supermarket group, Lotte, is preparing to open a trading centre in Ho Chi Minh City ’s South Saigon area, while another RoK group, GS Retail, plans to build 10 shopping centres in southern Binh Duong province in the next two years.
Meanwhile Thai Charoen Pokphand (CP) Group, which is famous for producing fresh and processed food, has moved quickly to open a chain of Fresh Mart outlets in Ho Chi Minh City .
In this context, domestic firms are bracing themselves against stiff competition from better equipped foreign investors.
With the aim of establishing a popular supermarket chain for consumers from all walks of life, last weekend the Saigon Trade Corporation opened one of 20 stores it plans to build in the country between now and 2010.
Saigon Co.opmart of the Saigon Co.op has joined forces with the BMC Construction Materials and Construction Installation, which specialises in real estate, to open supermarkets in BMC’s trading centres.
According to the Vietnam ’s Retail Association, social retail sales for the 2003-2007 period increased by between 18-22 percent per year, far exceeding the 8-10 percent figure recorded in the previous period. In the first nine months of this year, the country’s total retail sales value reached 694 trillion VND, a year-on-year increase of 30 percent.
Vietnam is home to 400 supermarkets, 60 trade centres and 2,000 convenience stores. The country expects to have 700-750 supermarkets, 150 trade centres and thousands more convenience stores by 2010.
VNA
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