Aeon secures footing in Vietnam
Aeon secures footing in Vietnam
Japan’s largest retailer Aeon, in addition to building its own stores in Hanoi, Ho Chi Minh City, and Binh Duong, has recently expanded its presence in the Vietnamese market through the acquisition of two local retailers.
The retail giant announced last week that it had reached an agreement on a capital and business tie-up with two Vietnam’s leading domestic retailers of Fivimart and Citimart. Aeon president Motoya Okada was quoted by the Nikkei Asian Review as saying that Aeon would acquire a 30 per cent stake in Fivimart and a 49 per cent interest in Citimart. He did not say how much this acquisition would cost Aeon.
This is the latest move in the Japanese retailer’s “Shift to Asia” strategy under their 2014-2016 medium-term management plan.
“In order to achieve rapid growth in the Vietnamese market, we believe that partnerships with Fivimart and Citimart are of great significance, as these companies have strong business foundations in two of the largest cities in north and south of the country, as well as knowledge of the varying regionally-oriented customer needs,” Aeon noted in an announcement.
Fivimart is the largest supermarket chain in Hanoi, operating 20 stores in the capital. Advocating locally-based management, the company offers products that meet local needs. Furthermore, the products such as all-in-one plate of stir-fried or stewed dishes combined with matching sub-meals represent their product planning capabilities.
Citimart is the largest supermarket operator in southern Vietnam, operating 27 stores mainly in Ho Chi Minh City. The company boasts its strong suit as being freshness and quality of its perishable foods, and being able to offer a wide selection in products like cut fruits and items sold by weight.
Annual revenue at both companies ranges between $45.1 million to $47.6 million.
“Aeon, Fivimart and Citimart will co-operate closely in promoting their businesses which include comprehensive financial services and convenience stores that contribute to the modernisation of the retail industry, and the enrichment of people’s lives in Vietnam,” Aeon stated.
While working together to jointly develop the Aeon brand “TOPVALU,” Aeon will inherit local knowledge from these two companies, including product procurement and customer needs. Likewise, Aeon will provide them with know-how regarding logistics, IT, development of human resources, and quality control for ensuring safety and security in the supermarket business.
According to Aeon, towards the launch of the ASEAN Economic Community scheduled for the end of this year, Vietnam is making steady growth, which is backed by a population in excess of 90 million, and a high economic growth rate that has contributed to an expanding middle class.
In Vietnam, Aeon Financial Service Company in 2008 became the first Japanese company to engage in installment sales in the country, followed by MINISTOP, which launched its CVS convenience store business in 2011.
In January 2014, Aeon opened its first shopping mall in Vietnam – the Aeon Mall Tan Phu Celadon, in Ho Chi Minh City, which is one of the country’s largest shopping malls. This was followed by the Aeon Mall Binh Duong Canary, which opened in the southern province of Binh Duong in November 2014.
With plans to open the third mall in Hanoi this year as well as other proactive initiatives in the pipeline, Aeon looks set to continue broadening its business scope in Vietnam.
