Retail market: Attempt to thriving enterprises during COVID-19

Retail market: Attempt to thriving enterprises during COVID-19

Making it among the most attractive retail markets worldwide, Vietnam’s retail market is witnessing a breakthrough by businesses having the capacity to turn risks into opportunities after the economy was hit by the COVID-19 pandemic.

Over the past years, Vietnam’s retail market has attracted many big retailers from the region and the world. An industry expert attributed this to “golden” factors such as the big population (nearly 100 million people), young population structure (60 per cent of the population aged 18-50); 10.5 per cent annual increase in household expenditure on average; and high urbanisation ratio.

Meanwhile, the coverage ratio of modern retail networks is lower than in many countries in the region. Specifically, the coverage ratio is just 25 per cent of Vietnam’s total retail value, whereas it is 33 per cent in the Philippines, 34 per cent in Thailand, 60 per cent in Malaysia, and 90 per cent in Singapore.

Vietnam’s retail market has attracted many big retailers regionally and globally

Along with expanding in scope, Vietnam’s retail sector has maintained double-digit growth over the past years. According to data from the Ministry of Industry and Trade, in the past four years (2016-2019), total commodity retail sales and consumer service revenue increased rapidly, estimated at 11.2 per cent per year.

From 2016 to 2018, the average growth rate of total commodity sales was 1.5-2 times higher than the average GDP growth rate in the same period. Also, according to the Ministry of Industry and Trade, the presence of foreign enterprises and the fast growth of some big domestic businesses have contributed to modernising the domestic retail industry over the past years.

Since early this year, amid the impacts of the COVID-19 pandemic, the domestic retail market has changed to meet new shopping demands. Retailers have invested substantially in technology, shifting from traditional and modern sales channels to online sales channels. After a lacklustre period due to COVID-19, the retail market has been bustling again with many connectivity and consumption stimulus programmes launched by big distributors.

According to the General Statistics Office, the total commodity retail sales and consumer service revenue reached VND1,305.8 trillion ($56.8 billion) in the third quarter of 2020, up 14.4 per cent from the previous quarter and 4.5 per cent from the same period last year.

Businesses’ efforts to stride forward

As remarked by industry experts, such a positive growth rate in the current context comes from the proper strategy of the management authorities and the great efforts of big retail brands to turn risks into opportunities, including MM Mega Market Vietnam, a brand that was launched in Vietnam four years ago by BJC/TCC Group of Thailand after acquiring the Metro Cash & Carry supermarket chain of Germany.

Thanks to the renovation strategy of the Thai group, MM Mega Market has undergone a facelift to be more modern and sustainable vision to meet the shopping habits of Vietnamese customers in the 4.0 era.

Bruno Jousselin, managing director of MM Mega Market Vietnam, said, “We want to focus on developing the O2O (online to offline) model. E-commerce is developing by leaps and bounds and everything is moving quickly. We have to approach customers through all possible channels. As a result, MM Mega Market is making big investment in e-commerce.”

Despite difficulties due to the impacts of COVID-19, the leading retailer of Thailand is splashing out on diversifying its sales channels to get the best access to customers. Specifically, MM Mega Market is building some depots at famous tourism destinations such as Phan Thiet city and Phu Quoc Island and many other localities in the coming time.

The initiative of selling countryside specialties on MM Mega Market trucks has helped sell several Vietnamese fruits, the output of which has been affected by COVID-19 to public dismay.

Together with expanding business, MM Mega Market is highly evaluated for its attempt to go hand in hand with the government in stimulating consumption through programmes launched in the local market, expand the export market for Vietnamese agricultural products, and assist enterprises in commodity sales in the new normal.

Recently, the retailer has organised the “Vietnamese Goods and OCOP Week” and signed a MoU with the departments of Industry and Trade of 14 provinces to help sell OCOP (One Commune, One Product) products in the chain of MM Mega Market supermarkets nationwide. In addition, MM Mega Market continues to boost the export of Vietnamese agricultural products to Thailand and Singapore, and some more markets in the region.

MM Mega Market of TCC Group has risen to the third position in the top 10 prestigious retail companies in 2020

Given its ceaseless effort in a year of unprecedented disruptions, MM Mega Market of TCC Group has risen to the third position among the most prestigious retail companies in 2020, joining the ranks of veteran retailers in Vietnam.

The retail market is forecast to be impacted by the COVID-19 pandemic, but according to Tran Duy Dong, director general of Domestic Market Department under the Ministry of Industry and Trade, the Vietnamese retail sector is looking at promising long-term development prospects. Prestigious brands that can win the confidence of customers like MM Mega Market will surely continue to stand strong in the market.

VIR