Retailers urged to keep up with customer demand
The rapid growth of the digital economy in the past few years has speeded up the evolution of the retail industry and changed consumers’ shopping behaviours, requiring retailers to continue to innovate to better serve customers’diverse needs, a seminar heard in HCM City on Wednesday.
Le Thi Thuy Trang, head of retailer vertical at Nielsen, said traditional retail remained Viet Nam’s dominant distribution channel but is growing at just 1 per cent a year. The modern trade channel had expanded to account for 26 per cent of retail sales, and is growing at 11.8 per cent.
“There is still great potential for the modern trade channel to develop,” said Trang.
With rapid urbanisation and smaller households, there is a need for smaller pack s and greater demand for convenience, she added.
Besides, according to Nielsen’s research, adding amenity services is also a factor in attracting customers and enhancing customers’experience at stores, she said.
With increasing incomes, consumers were tending to buy more high-grade products and those good for health such as natural and organic products, she said.
"The number of connected customers in Viet Nam would increase from 35 million now to nearly 40 million by 2025. Producers and retailers need to adopt appropriate measures to attract them in future," she said.
Shoppers tend to buy from many channels - online, offline, a combination - and so retailers need to adopt a fully-integrated approach to commerce that provides shoppers a unified experience across online and offline channels, she said.
She also talked about future customers (Generation Z aged between 13 and 19 now).
"This group had been estimated to number around 15 million by 2025, representing 25 per cent of the country’s workforce, and would have a significant impact on the consumer market by then," she said.
It has large requirements for products and services, but its loyalty to brands is low compared to previous generations because of its curiosity and impulsiveness, she said.
As the purchasing power of these young people continues to grow, marketers and advertisers should develop more effective campaigns to approach these consumers in future, she said.
Nguyen Huy Hoang, commercial director at Kantar Worldpanel, said there is bruising competition between local and foreign retailers.
The latter focus more on the convenience store and mini supermarket segment and mainly in big cities, and as a result local retailers still account for a relatively high market share, he said.
For the past five years local retailers, especially Saigon Co.op, have grown at a rapid rate and dominate the supermarket and mini supermarket segments, but face great competitive pressure in the hypermarket and convenience stores segments, he said.
The seminar also discussed future retail technologies.
It heard that many retailers seek to adopt new technologies to retain their customers.
Nguyen Anh Duc, its permanent deputy general director, said it would remain a co-operative and strive to maintain its position as the country’s leading retailer.
It plans to further diversify its retail models to cover all customer segments and adopt modern technologies to offer customers a unique shopping experience, he said.
It has seven different brands now, including Co.opmart supermarkets, Co.op Food stores, Co.opSmile convenience stores, and Cheers 24/7 stores, he said.
Next year it plans to launch three more, including one targeting high-income consumers, he said.
It would continue to fulfil its social responsibility, he said.
Organised by Saigon Co.op, the conference titled “Viet Nam’s Retail Market Trend in the 2018-20 and Development Orientation of Saigon Co.op” attracted more than 300 local and foreign delegates.