Foreign retailers reinforce investment
Foreign retailers reinforce investment
Foreign brands are amplifying their investment in Vietnam in defiance of the health crisis lingering and denting consumers’ pockets.
Japan’s UNIQLO last month announced that it will open a large-scale store in Ho Chi Minh City’s Saigon Center in the next few months. With an area of more than 3,000 square metres, it will be one of the largest stores in Vietnam, playing an important role in the brand’s expansion strategy two years after entering the Vietnamese market.
Osamu Ikezoe, COO at UNIQLO Vietnam, said, “We expect that once the store in the Saigon Center is launched, customer volume will double, even triple, compared to other stores.”
Entering Vietnam in late 2019, UNIQLO is currently operating nine stores in large shopping malls. At the meeting with Prime Minister Pham Minh Chinh in November 2021, chairman Tadashi Yanai – who is also CEO of Fast Retailing, the owner of UNIQLO – said that the group has the ambition to open over 100 stores in Vietnam. By 2030, 30 of these stores will be operational.
Meanwhile, Vietnam’s largest and fastest-growing mother and baby retail network, Con Cung, is looking for prime locations for its expansion after launching its 2,000sq.m super centre in Ho Chi Minh City’s District 1 in January, following two more stores opened in District 5 and Phu Nhuan district.
The motivation for Con Cung’s was an investment worth $90 million from Quadria Capital, Asia’s leading healthcare investor, in late January.
The fund will be used to support Con Cung’s ambition to launch 2,000 local stores by 2025, expand its product portfolio, and launch a super app that provides personalised products and services for over the targeted five million Vietnamese mothers.
Robert Willett, operating partner at Quadria Capital said, “The retail industry is constantly evolving. It’s exciting to be a part of this sector and provide care and education to its customers through a personalised omnichannel experience that is powered by nimble online-offline expansion strategies and underpinned by AI.”
Willet expressed that he looks forward to supporting Con Cung and providing Vietnamese people with world-class products.
Tien Luu, CEO and co-founder of Con Cung, said, “We plan to open one supercentre per month with the goal of reaching 200-300 such stores across Vietnam. Transforming our store concept will better serve the ever-changing demands of young Vietnamese parents.”
Founded in 2011, the company currently operates over 600 stores across 45 cities and provinces in the country.
As Vietnam is a market of potential for retailers in healthcare, baby care, fashion, sports, and food and beverages, the expansion of many domestic and overseas retailers has been spurred. According to the 2021 Review and 2022 Outlook Highlighting Key Trends in Ho Chi Minh City, published in late January by CBRE, large corporations continued to expand last year. Both foreign and local brands were among these, including Decathlon, UNIQLO, Central Group, and AEON Group.
Retail lease manager at Savills Ho Chi Minh City Tran Pham Phuong Quyen said that numerous large retail groups are quietly bringing new international brands of fashion, lifestyle, accessories, and outdoor sportswear into Vietnam.
“International brands in cosmetics, accessories, and consumer goods have had ambitions to launch their brands in Vietnam since 2019, but many of their projects have been stalled. They are resuming their investment plans after international flights begin to operate again in the country this year,” Quyen said.
According to Savills’ forecast, multi-brand stores with an area of 350-1,000sq.m are expected to further expand thanks to diverse goods and prices, providing an integrated destination for local customers.
The trend of opening large stores will become stronger this year. This strategy is further promoted by Vietnam’s growing domestic consumption.
