Number of retailers soars in first five months

The domestic retail market’s spectacular growth in the first five months of the year has encouraged major retailers to launch new investment projects.

According to the Ministry of Industry and Trade, the national total retail sales of consumer goods and services in the last five months reached VND620 trillion (US$32.6 billion), a year-on-year increase of 26.9 per cent. The figure is estimated to increase by 20 per cent to VND1.44 trillion (US$75.8 billion) by the year-end.

Dinh Thi My Loan, vice chairwoman of the Viet Nam Retailers Association, said the domestic retail market had grown rapidly, as shown through the number of new trade centres and supermarkets opening every year in cities and provinces nationwide.

The country is expected to have about 850 trade centres and supermarkets as well as thousands of convenience stores by the year-end.

At least 15 major foreign retailers, including Wal-Mart, Carrefour, Tesco, Circile, Metro Cash&Carry, and Casino, have set up business or plan to do so in HCM City.

The US-based A.T. Kearney Alliance said the market was expected to have a turnover of US$85 billion by 2012, with many domestic and foreign retail firms intensifying investments in hope of expanding market share.

The Citimart chain owned by the Dong Hung Company typifies the trend. The company has just bought four Family Mart supermarkets from Parkson Viet Nam, increasing its total supermarkets to 30. This is the first time in Viet Nam that a domestic retail company was a franchise buyer from a foreign company.

Citimart General Director Nguyen Aùnh Hoa said Citimart decided to buy the Family Mart supermarkets of Parkson since most customers of the latter are high-income earners.

Many other retail enterprises have also focused their investments and expanded retail systems. Sai Gon Co.op plans to open 10 new supermarkets this year, increasing its total number to 50, with a yearly turnover of about VND11.5 trillion ($605 million).

Metro Cash&Carry will construct two new supermarkets in the provinces of Binh Duong and An Giang. Parkson Viet Nam also plans to open two new trade centres in Ha Noi and Da Nang. Japan’s Family Mart retail company is due to increase its network to 100 in Viet Nam, with the first five new convenience stores in HCM City.

The VND1.8 trillion Crescent Trade Centre of the Phu My Hung Joint-Venture Corporation will make its debut with about 200 stores by the end of 2011.

The strong development of retail systems in the country has led to higher prices for retail space in HCM City, where the price has risen by 3 per cent downtown and 4 per cent in District 7 and Binh Thanh and Tan Binh districts.

A.T. Kearney Alliance said Viet Nam’s modern retail system accounted for only 18-20 per cent of the domestic retail market’s structure.

Tags: Vietnam retail market, Vietnam retailers