Domestic retail sector presenting bright picture
Domestic retail sector presenting bright picture
The consequences of the pandemic seem to no longer haunt the domestic retail industry, as sales of consumer goods and services continuously record stellar growth.
According to data published by the General Statistics Office, Vietnam's total retail sales of consumer goods and services in the first seven months of the year increased by 16 per cent over the same period last year, reaching more than $139 billion.
Winmart is the largest domestic retail system in Vietnam with 127 supermarkets and more than 2,000 Winmart+ convenience stores
Winmart in the first half of this year achieved revenues of more than $608 million, an increase of nearly 6 per cent compared to the same period last year.
WinCommerce, a subsidiary of Masan Group in charge of developing Winmart and Winmart+, said the brand plans to open more than 700 new WinMart+ stores and more than 20 super- or hypermarkets by the end of 2022. It also wants to accelerate with the franchise model towards the goal of holding 10,000 points of ownership and 20,000 franchised stores by 2025.
"We consider this is the time to enter the phase of accelerating expansion after completing the successful rebranding and restructuring. Since the beginning of 2022, there have been more than 300 supermarkets and WinMart, WinMart+ stores newly opened nationwide," said Nguyen Van Quy, deputy general director of the WinMart+ chain.
In addition to expanding its network, the chain also opened a separate brand called Beng's, specialising in convenient, good-quality food at affordable prices.
Other retailers have also planned to expand their investment and system expansion to meet the needs of consumers.
Saigon Co.op, the domestic retailer that owns the Co.op Food, Co.opSmile, and Cheers chains, plans to open 80-100 new points of sale before the end of the year.
Nova Market is still a new name in the retail sector but has opened three stores in the form of small supermarkets selling food, drinks, and fresh vegetables. Its goal is to open 300 stores of various sizes across the country. By 2025, the business is expected to develop 2,000 vendors of sale to increase its presence in all localities.
Despite the market boasting strong development opportunities, not all retail businesses have impressive business results.
After a long period of losses, the Bach Hoa Xanh retail chain under Mobile World Investment Corp (MWG) was forced to close 400 stores in order to restructure.
Bach Hoa Xanh is also one of the domestic brands holding the largest market share in the retail sector. By the end of July, it had 1,735 stores, and revenues in the first 7 months of 2022 reached $660 million, down 14 per cent compared to the same period last year.
Nguyen Duc Tai, chairman of MWG, said that after the restructuring, the experience at Bach Hoa Xanh has improved markedly, and revenues and traffic have increased sharply. In the second quarter, the sales volume of the chain increased by 15-20 per cent and the number of customers coming to the shops increased by 20-25 per cent compared to the first quarter.
“Currently, Bach Hoa Xanh is self-supporting. It is expected that by the fourth quarter, the chain will be profitable," Tai said.
MWG has plans to sell 20 per cent of Bach Hoa Xanh shares to a foreign partner and the deal is expected to be completed in early 2023.
The results of a Global Consumer Insights Survey conducted by PwC in 25 countries and territories, including Vietnam in July, showed that more than 75 per cent of consumers are expected to continue to maintain or increase spending in the next six months, despite high inflation.
The EU-Vietnam Business Network also rated Vietnam third in ASEAN, after Indonesia and Thailand, in terms of retail size.
