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Supermarkets proliferate into the provinces and suburbs
In recent years, suburbanites in the greater HCM City area have gotten used to shopping at a steadily growing number of ‘supermarkets.’
In cities and towns all over Vietnam, traditional open-front stores and market stalls face growing competition from the modern stores collectively termed ‘supermarkets.’ The latter range in scale from megastores like ‘Big C’ to medium sized stores to mini-marts. Their common denominator is that each practices ‘modern’ methods of merchandising and each carries as broad a product line as it can fit within its premises.
Megastores push out from the centre
After having established solid positions in Vietnam’s largest cities, Metro Cash & Carry, Co-op Mart, Citimart and Big C are establishing their chains in the provinces. In the first half of July, Metro opened its ninth ‘distribution centre’ in Bien Hoa City, east of HCM City. Right after that, Big C opened a store in Hue, and Co-op Mart opened a store in Phan Rang, the seat of Ninh Thuan province.
Currently, Metro is setting up another megastore in Quy Nhon City (Binh Dinh). By the end of the year, Co-op Mart will open supermarkets in Ha Tinh, Long An, Bac Lieu and Kien Giang, while Citimart is preparing feverishly to open a supermarket in Da Lat.
Smaller markets reaching out to the suburbs
Smaller than a megamart, larger than a minimart, privately-run supermarkets of from 2000 to 10,000 square meters’ selling space have been colonizing the suburbs.
Now in its third year of operation, Titanmart has become a familiar destination for shoppers in Wards 1, 4 and 5 of HCM City’s District 8 and adjacent Binh Hung commune in Binh Chanh district. In 2,000 square metres of sales area, the small supermarket stocks 30,000 items, including textbooks, teaching and learning aids, clothes, and consumer goods as well as food. It serves 1,000 customers per day.
Vu Van Trinh, General Director of Titanmart chain, is bullish about expansion. He said demand for essential consumer goods from suburbanites in the sprawling HCMC megalopolis is huge.
Other supermarkets and self-service stores with names like Foocomart, An Khang, Starmart, Co-op and Plentyday have appeared in these districts, directly competing with traditional foodsellers. The stores sell fresh and processed foods, soft drinks, beer and some essential goods.
The Thao Nguyen supermarkets in District 12 and Tan Phu district are doing better than expected, says Director Ho Mong Toan. His chain has been following a model which is a mix of Big C (discount pricing and heavy advertising) and Metro (wholesale pricing) strategies to attract clients. Toan estimated that up to 40 percent of the stores’ customers are the owners of small shops who purchase goods from here for resale.
Smaller yet are the minimarts, with an area of between 200 and 1,000 square metres, and stocking 5,000-10,000 products. Most are family run. Some are developing into chains, including Thu Va Tin (meaning ‘try and believe’) near Tan Binh Industrial Zone, Plentyday in District 8), and Skymart in Phu My Hung new urban area. They specialize in selling essential goods to area residents at medium price levels.
Living together with ‘the big guys’
Experts say that most businesses aren’t securely founded until they’ve operated for five years. Many smaller supermarkets in HCM City are less than four years old.
Unable to match the turnover of big retailers like Co-op mart or Big C (several tens of billions of dong a month), the smaller stores don’t get much cooperation from distributors when they seek to launch promotion campaigns, offer price discount or co-finance advertisements.
To keep prices down, these supermarkets have to tread a fine line, doing everything they can to save money by minimizing the number of staff and cutting out unnecessary expenses.
VietNamNet, VnMedia
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