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Foreign businesses poised to swoop in, domestics expand
Domestic retailers plan to expand operations to compete with international retailers, who are poised to enter the local market due to Viet Nam’s commitment under the World Trade Organisation’s rules.
Nguyen Thi Tranh, deputy general director of the HCM City Union of Trading Co-operatives (Saigon Co-op), said Saigon Co-op would open two more department stores in Binh Phuoc and Ba Ria-Vung Tau in southern region this month.
On May 19, Dong Xoai Co-op Mart opened with an investment of more than VND61 billion (US$3.5 million), while Ba Ria Co-op Mart will open on May 22 at a cost of over VND73 billion ($4.2 million).
Since the beginning of the year, Saigon Co-op has built four new department stores and expects to open another 12 in cities and provinces across the country the by the end of the year, valued at a total of VND500 billion ($29.4 million).
Other distributors such as Maximark and Citimart are rushing to upgrade distribution networks in anticipation of an onslaught of foreign competition.
According to Nguyen Anh Hong, director of Maximark supermarket chain, Maximark plans to build a new store in the central resort city of Nha Trang and upgrade and expand its store in HCM City with total investment of VND150 billion ($8.8 million).
The executive director of the Citimart chain, Nguyen Anh Hoa, said the company was negotiating with partners to seek 10 locations for expansion.
Finding land and a suitable location is the most time-consuming and costly tasks, according to retailers.
Maximark, which often chooses central districts or new urban areas for its department stores, spent four years negotiating with partners to reach agreement on a 6,000sq.m location.
Foreign-owned corporations such as Lotte Mart, Big C and Parkson also plan to increase their market share in the Vietnamese market.
The Republic of Korea-based group, Lotto Mart, is preparing to open its second department store in HCM City, which follows the first one built in District 7 last year with a total investment of $75 million.
In July, Big C will open its ninth store in central Thua Thien-Hue Province at a cost of about $17 million.
Nguyen Thi Hong Huong, director of Vinatex Mart chain, said it would co-operate with Saigon Co-op to compete with foreign rivals.
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