Retail market warms up

Experts say the domestic distribution market will receive more big foreign retailers. Meanwhile, the existing distribution chains in Vietnam also plan to expand their investment scale.

Thoi bao Kinh te Saigon has quoted its source from the HCM City Planning and Investment Department as saying, that the Japanese leading retail group – Aeon – has applied for investment license in the distribution sector in HCM City.

The retailer with more than 180 subsidiaries plans to invest more than 100 million dollars to build a trade center that serves its business in Tan Phu district. Aeon is believed to be a redoubtable rival for any retailers, because it has good experiences and big financial capability.

Though the Japanese group’s project has just been put into the table of the state management agencies, Aeon is taking necessary steps in terms of the labor force to prepare to enter the Vietnamese market. Japanese Nikkei has reported that Aeon is taking hectic preparations to get ready to penetrate the Vietnamese market by 2014.

Also according to Nikkei, Aeon has signed an agreement on training cooperation and recruitment with the HCM City University of Social Sciences and Humanity, under which Aeon will interview the students with good learning results, who have interests in the retail sector and can speak Japanese, and recruit some 20 graduates a year. Also, Aeon will also set up a scholarship fund which allows to prop up the tuitions for university training of 60 students for 1-2 years.

Aeon plans to begin the recruitment by the end of 2011, before it brings the students to be admitted to Aeon system to internship courses at credit card firms and retail shops of the group. After finishing the courses, they will return to work at Aeon trade center in HCM City, which is expected to make debut in 2014.

Hong Kong’s Dairy Farm set foot in Vietnam earlier than Aeon, while it is in no way inferior to Aeon. According to Phu My Hung Joint Venture, the owner of the Crescent Mall project in Phu My Hung new urban area, Dairy Farm plans to kick off its business at Crescent Mall which is expected to open the next month. The retailer has leased 4500 square meter on the ground floor of Crescent Mall to open a supermarket, called Giant.

In fact, Dair Farm has been making its presence in Vietnam for the last 4-5 years through its subsidiary – Giant South Asia Vietnam – which has been running its first supermarket, Wellcome. The supermarket to be opened at Crescent Mall in district 7 of HCM City will be the first supermarket which bears Giant brand in Vietnam.

Meanwhile, South Korean retail group E-Mart has announced the cooperation with U&I Group in Binh Duong province to establish a joint venture that runs a retail shop chain which will have branches throughout the country.

As planned, E-mart Vietnam will have the initial investment capital of 80 million dollars, of which E-Mart holds 80 percent of stakes. The investment capital would be raised to one billion dollars which will be pumped into the establishment of the chain of 52 supermarkets and shops in big urban areas.

It is clear that the foreign investors who have been eyeing the Vietnamese retail market, have begun taking actions to increase their presence in Vietnam. This explains why Research and Markets, in its recent report on Vietnamese market, affirmed that Vietnam is one of the five markets which can bring the highest profitability to investors.

The foreign investors, who have been doing business in Vietnam in the last many years, are also considering expand their business.

South Korean Lotte Mart, for example, has said it has increased its investments in Vietnam. The retailer said the government of Vietnam has approved the plan to increase Lotte Mart’s investment capital to 50 million dollars. The HCM City Planning and Investment Department has confirmed that it has approved the additional investment capital proposed by Lotte Mart.

Lotte Mart established Lotte Vietnam Shopping, a joint venture with Vietnamese Minh Van Company in 2008, which has the initial capital of 15 million dollars, of which Lotte holds 80 percent of stakes.

The retailer has opened two big retail centers in HCM City.

Meanwhile, Metro Cash & Carry from Germany in September alone, opened two new distribution centers in Vietnam which have the total investment capital of over 33 million dollars. The retailer has revealed the plan to open one more center this year.

Source: TBKTSG

Tags: Vietnam retail, vietnam retail industry, Vietnam retail market, Vietnam super markets