Convenience stores, groceries vie for turf
08-06-2015 14:35:16+07:00
Convenience stores, groceries vie for turf
Though foreign investors continue to pour more money into convenience stores in Vietnam, traditional variety stores still prosper.
Hien, a HCM City resident who lives on Tran Xuan Soan Street in District 7, often goes to Co.op Food, just tens of meters far from her home, on the weekend.If her office runs out of ballpoint pens, she goes to Circle K, a convenience store near her office. And when she has free time on the weekend, she goes shopping at Lotte Mart, where she can find all the things she needs. And her daughter has large space to play.
Hien, like many urban women who have to spend time at work, tends to go to convenience stores to buy food.
A report from Nielsen, a market survey firm, showed that modern retail now plays increasingly important roles in Vietnamese lives. At least 34 percent of surveyed consumers said they often go to supermarkets, and 29 percent said they go to supermarkets more often than in the past. Meanwhile, 22 percent said they more often go to convenience stores.
Convenience stores are defined by Nielsen as shops open 24 hours a day and 7 days a week such as FamilyMart, B’s mart, Circle K, Shop & Go and Mini Stop.
Another survey conducted by Nielsen showed that in 2014, the number of convenience stores in Vietnam increased by 34.4 percent over the year before to 348, while the number of mini supermarkets increased by 34.2 percent. The growth rates are nine times higher than the growth rates of hypermarkets and supermarkets.
Also according to Nielsen, convenience stores still have more opportunities to develop in Vietnam because the ratio of consumers to one convenience store is 69,000 consumers per store, much higher than 37,000 in the Philippines and 21,000 in China.
The FMCG (fast moving consumer goods) report released by Kantar Wordpanel in the first quarter of 2015 showed that modern retail channels (supermarket, convenience store, mini supermarket) account for 19 percent of the retail market, while the number of convenience stores and mini supermarkets has increased by 15 percent compared with the same period the year before.
Grocery stores still busy
The Kantar Worldpanel, while noting the considerable growth rate of convenience stores and mini supermarkets in the four biggest cities of Vietnam, found that groceries still make up 60 percent of the retail market.
According to the Ministry of Industry and Trade, there are about 500 groceries nationwide.
A branding expert said groceries would still exist together with modern supermarkets because groceries are small shops which don’t require high operation costs, and they can offer goods at competitive prices.
