HO CHI MINH CITY: International retail brands are eyeing up expansion in Vietnam, where modern trade channels account for a quarter of retail business and new opportunities are opening up as trade agreements remove barriers.
The country is on the brink of a convenience store boom, Inside Retail Asia reported, noting the rapid growth of such stores in the past couple of years.
The speed of development becomes apparent in the figures cited for local retailer VinMart, which has almost 700 convenience stores and is opening them at the rate of two a day across the country.
The fastest-growing chain in Ho Chi Minh City is Circle K, the US franchise whose local rights are owned by Vong Tron Do company, which can boast two or three stores in every residential quarter, usually less than 600m apart.
Other local names like C-Express and Co-op Food have been joined by Japan's Family Mart and Thailand's B'smart. And 7 Eleven is due to open its first store next year with a total of 1,000 planned over the coming decade.
In the supermarket sector, South Korean chains have also set their sights on Vietnam, with Lotte Mart planning to open 60 stores by 2020, while Emart has opened its first hypermarket and more are planned.
Faced with this prospect, local retail organisations have called on the government for help in improving competitiveness and in securing prime locations.
Dinh Thi My Loan, chairwoman of the Association of Vietnam Retailers, noted that the government offered support packages for the real estate sector and programmes for industrial and agricultural extension, but there was no equivalent for the retail sector.
"We want the Government to consider providing the retail sector with capital support," she told a recent retail industry workshop, which also heard pleas for authorities to protect the rights of local retailers by properly enforcing an "economic needs" test for foreign retailers.
Young people and professionals are the main users of modern retail outlets, according to researcher Nielsen, with 23% of students and 36% of white-collar workers/professionals often shopping at supermarkets and convenience stores.
Data sourced from Inside Retail Asia, VietnamNet; additional content by Warc staff