New players sprout up in City’s fresh-food chain market

Fresh-food chains are mushrooming in HCM City, with many new players entering what they think will be a promising industry.

The first shop exclusively for fresh foods was set up by Saigon Co.op, the country’s largest supermarket chain, in District 5 as recently as in 2008.

Since then, the company has opened 17 more around the city.

Bui Ngoc Chau Bau, deputy director of the Saigon Co.op Food Company, said the chain was aimed at working women who generally prefer to buy fresh food at clean places that guarantee hygiene, and do so on their way home from work.

But Saigon Co.op now has competition from chains opened by companies like Vissan, CP, Phu An Sinh and My Duc-Binh Dien, The Bach Hoa Moi limited liability Company, and trading company Saigon Trading Corporation (Satra), Saigon Economic Times reports.

Bach Hoa Moi has set up a chain of fresh food stores called New Cho with two outlets now in Districts 3 and Phu Nhuan.

Satra is a late entrant with its SatraFoods but is very hopeful of business growth thanks to the market’s huge potential and its existing network of outlets.

A Satra executive revealed that the company expected to open at least 10 fresh-food outlets this year.

The chains believe the business model has many advantages since the outlets are often located in residential areas and have a large range of essential food items.

Saigon Co.op is committed to the expansion of its Co.op Food stores and targets having around 100 outlets within the next five years.

Satra said it planned to expand to major cities around the country.

Nguyen Trung Thang, chairman of Masso Group, a marketing company, said the model had great potential since Viet Nam was one of the world’ most lucrative retail markets.

Though the economy was mired in difficulties, the country’s retail market grew at above 25 per cent last year, he said, quoting a report by global management consulting firm AT Kearney as saying the market would be worth US$88 billion by next year.

Last year alone 85 markets, 86 supermarkets, and 11 shopping malls opened in Viet Nam as consumers began to get familiar with modern shopping trends. — VNS

A recent survey found that 70 per cent of consumers prefer to shop at supermarkets and 80 per cent prefer to use modern shopping channels.

Thang said, however, that to become popular food chains should develop brands and scrupulously fulfil quality commitments to consumers.

Ensuring supply of food products is a big challenge for Vietnamese retailers since output of clean agro-products remains small, meaning both output and prices are unstable, he said.

To ensure stable supply, food stores themselves would have to get into the supply chains, he pointed out.— VNS

Tags: fresh-food chain market, vietnam retail industry, Vietnam retail market