Retailers rush to expand convenience store chains
Many local retailers are rushing to expand their retail store chains, resulting in convenience stores mushrooming across the country, mainly in HCMC, even though some European retailers have withdrawn from the local market.
Vingroup on a single day of December 31, 2018, put into operation 117 more convenience stores in the three regions, including northern, central and southern Vietnam, taking its total number to 1,700 VinMart+ stores at the time. VinMart+ now owns 1,900 stores nationwide.
Vingroup has set a target to own 4,000 VinMart+ stores by 2020, according to the group.
Meanwhile, Mobile World Investment Corporation, known in Vietnamese as The Gioi Di Dong, inaugurated 46 Bach Hoa Xanh stores in March. As of April 30, Bach Hoa Xanh operated 512 stores across the country. Each store covers 150-250 square meters of space on average.
The Gioi Di Dong is looking to expand its retail store chain, raising the total number of stores to 800 this year.
Saigon Co.op is also jumping on the bandwagon to expand its retail store chain in the country.
The company, which owns 34 Cheers convenience stores, is planning to open one more store this week. The retailer also operates 360 Co.op Food stores and 70 Co.op Smile convenience stores, which cover 20 to 200 square meters of space each.
Enhancing the reach of Satrafoods stores is also a key project of Saigon Trading Group (Satra) this year. Satra currently has 214 Satrafoods stores in HCMC and 10 others in the Mekong Delta city of Can Tho.
Speaking at a meeting to review its 2018 performance in January, a representative of Satra said that in 2019, the retailer would open 60 more Satrafoods convenience stores to raise the number to 277 stores and will have 330 operational stores in 2020.
Further, Vietnamese meat processor Vissan has 55 Vissan stores and plans to open five more this year.
In the context of the fast-growing presence of convenience stores in the local market, many people said that the retailers are grappling with heavy losses to beef up their market shares. However, convenience store operators appear to have gained ground in the local market.
According to statistics from Vingroup, the retailer earned revenue of VND19.3 trillion from retail services at the VinMart, VinMart+ and VinPro chains in 2018, surging by 48% against the figure seen in 2017.
A representative of Bach Hoa Xanh also stated that the revenue from stores inaugurated prior to April 1 amounted to VND1.3 billion per month each, doubling the figure in January.
Bach Hoa Xanh saw its first two stores hitting the highest level of VND4 billion per month for revenue earned in April.
Some economic experts said the withdrawal of certain foreign retailers has made it easier for domestic retailers to dominate the local market. The retail store sector still has great potential for further development.
A report from Nielsen showed that the number of convenience stores in Vietnam soared by 45.5% last year against the figure seen in 2017 due to the rising demand.