Local players lead the race in Vietnam’s potential retail market

Recent survey of Bao Viet Securities Company showed that VinMart is dominating retail market in Vietnam, accounting for 53% of the share, much higher than its two domestic rivals Bach Hoa Xanh and Co.opmart with 13% and 12% market share respectively.

With the desire to affirm position in domestic market, Vingroup has an agressive expansion strategy.

Thanks to strong financial power, the group has acquired a series of domestic and foreign brands. It bought Ocean Mart supermarket chain, 39 Vinatexmart stores in 19 provinces and cities of Vietnam Trade and Fashion Company, 23 stores of Fivimart.

Recently, it received 87 Shop & Go stores for just... $1.

As of September 2019, Vingroup is a market leader with more than 100 supermarkets and 2,346 convenience stores, followed by Bach Hoa Xanh and Saigon Co.op with about 500 stores and 460 stores respectively.

"It is expected that by 2025, the system will have more than 300 VinMart supermarkets, nearly 10,000 VinMart + stores in 63 provinces and cities nationwide," said Thai Thi Thanh Hai, general director of VinCommerce Company.

Photo: Vietnambiz

Saigon Co.op, the long-lasting retailer in local market, have deployed its tactics by acquiring French retail chain Auchan. It is also developing new sales channels to meet customers' demands.

“Mini supermarket and the convenience store are very flexible, allowing us to quickly cover the market. In Northern region, we face difficulties in opening large models such as hypermarkets or supermarkets, ”said Tran Lam Hong, deputy general director of Saigon Co.op.

In 2012, Saigon Co.op was market share leader of supermarkets and convenience stores. Now, Vingroup increased their market share to 27% and Saigon Co.op’s market share decreased to 47%.

Besides VinMart, other retailers are joining the market. In August, Mobile World Group deployed strong expansion in the market with several Bach Hoa Xanh stores. This chain currently has 322 stores in 15 provinces in the Southern region.

Is there "room" left?

According to the Q&Me report, retail sales in Vietnam market reached $142 billion in 2018, the highest level ever recorded and it is expected to reach $180 billion by 2020. Annual compound growth rate is 13%.

In particular, Hanoi and Ho Chi Minh City are the two cities with the strongest growth in modern sales channels.

Vietnam's modern retail sector is expected to grow rapidly in the next five years, especially with “not-a-square-meter” stores using e-commerce.

Average annual growth rate of 25.8% during 2018-2023, double that of any other country in the region, According to McKinsey.

Although there are still rooms, elimination in Vietnam retail market in recent years has led several domestic and foreign enterprises to leave the market.

A series of withdrawals of European supermarket groups in Vietnam over the past 5 years such as Casino Group of France, Metro Group of Germany, recently Auchan is the clearest evidence.