Retail market remains attractive to investors in 2013

Aggregate retail sales in 2012 increased 16% in comparison with 2011; domestic and foreign investors increasingly invested and expanded supermarket chains.

Pessimistic predictions about the world economy in general and Vietnam economy in particular for the year 2013 have no impact on the expansion of retail chains by domestic and foreign investors.

Visible potentials

According to General Department of Statistics, aggregate retail sales and consumption services revenue in December rose 1.05% compared with the previous month and 9.5% compared with the same period in 2011. , Aggregate retail sales and consumption services revenue of 2012 reached 2.32 million billion VND, increased 16% compared with 2011. .

In which, business trade took the largest proportion with 1.87 million billion VND, increase of 14.8%; hotel and restaurant service increased 17.2% to 273.2 billion VND; services increased 19.6%; tourism accounted for the smallest proportion with the most rapid growth of 28.1%. These data partly illustrates the relatively high growth rate of Vietnam retail market despite economic difficulties as well as the decline of purchasing power.

Almost investors still put their great expectation on such potential market of 90 million people, in which the young population, who regularly shop in the modern retail channel, accounts for 50%.

According to Ms. Dinh Thi My Loan, General Secretary of Retailer Association, “Modern Retail Channel accounts only 20%; therefore, the opportunity to exploit this market is very huge. As the plan till 2020 of Vietnam, this ratio will increase to 45%. The difficulties of 2013 are unlikely to discourage investors from this market.

“Consumption demand is inevitable despite economical difficulties. The important point is how to stimulate the demand. Moreover, if domestic investors do not enter fast, this market will be dominated by the foreign investors who have the economic abilities and experiences in retailing”, said Ms. Nguyen Phuong Thao, Maximark representative.

Expansion acceleration by investors

Hyper market model is never a hindrance in business plans of Big C or Metro for the new year. Accordingly, Big C expects to increase the total number of its supermarkets from 19 in 2012 to 29 in 2013. Similarly, wholesaling supermarket Metro also plans to expand strongly in 2013.

Not staying out of the game, Vietnamese retailers is gradually expanding their chains. Only in the last few months of the year 2012, Telecommunication A released 9 smart phone centers. According to Ms. Hoang Ngoc Vy, CEO of the Telecommunication A, Telecommunication A will develop these centers into large systems to meet the need of consumers in 2013.

The attractiveness of the retail market leads to the emerging of a number of new brands. For example, the supermarket S.Mart of CT Group was launched in the end of December 2012. And in 2013 CT Group expects to develop this supermarket system across the country. Besides, retail development trend to countryside becomes more and more important to retailers.

Co.opmart is a typical example of this trend. According to the plan till 2015, Co.opmart will develop its supermarket chains across the country to 100 units. Nguyen Thanh Nhan, representatives of Saigon Co-op, said: “Vietnam’s retail sector is in a very strong growth, so enterprises should grab opportunities continuously”. The attractiveness of the market is also reflected by large investment amount that foreign investors decide to pour into Vietnam’s retail market.

Lotte Mart increases investment capital in Vietnam to 50 million dollar. Retail group Aeon (Japan) also has a considerable investment plans in Vietnam. The first project is a shopping center of 82ha in Celadon City in Tan Phu district, Ho Chi Minh City with investment capital of $ 109 million which is expected to be put into operation in 2014. Aeon Malaysia will open its second center in late 2014 in the city and its third center in Hanoi in 2015.

The expansion of investment in 2013 and the following years of domestic and foreign investors is a concrete evidence for the attractiveness of the Vietnamese retail market with annual retail sales growth of about 23%. Surely, there must be many difficulties for retailers in 2013 but they might have their own answer for the question of how to stimulate consumption demand hiding behind their decision of expansion.


Resource: – 03/01/2013 10:39