In 2011, the Vietnamese distribution market received two more big brands – Japanese Aeon and Hong Kong’s Giant. As such, Vietnam just needs British Tesco and the US Wal-mart to gather enough the world’s biggest distributors.

“Big fishes” whisk the tails

The distribution sector can be classified into two types, wholesale and retail. However, the two types can exist under different names such as hypermarkets, supermarkets, convenience stores or shopping malls, depending on the goods structure and the scale and the targeted clients.

The Japanese Aeon Group has recently decided to invest 101 million dollars in the Vietnamese market. In the immediate time, Aeon would build a shopping mall and a supermarket chain which bears Jusco brand in HCM City.

The Japanese distributor began considering Vietnam the target market in South East Asia in 2009. Nagahisa Oyama, Chief Executive Officer of Aeon, noted that the turnover growth rate of the Vietnamese retail industry at 20.6 percent per annum from 2000 to 2008 was really a very attractive figure. He also said that together with Russia, China and India, Vietnam has been listed in the most four attractive retail markets in the world.

Going ahead of Aeon, but only in December of 2011, did Hong Kong’s Dairy Farm join forces with Hanoi ACB Investment Company opened the first Giant supermarket in Vietnam, located at Crescent Mall in HCM City.

Most recently, Glyn Hughes, CEO of A Chau Investment and Trade Company, the investor of Giant chain, said that Welcome is the first step in its plan to penetrate the Vietnamese market. “The Giant chain would be expanded in the future,” he said.

Commenting about the appearance of the big guys in the distribution sector in Vietnam, Nguyen Thanh Nhan, Deputy General Director of Saigon Co-op, which is considered the biggest Vietnamese retail chain, said that the existence of rivals proves to be inevitable, and noted that this would make the market more competitive.

Saigon Co-op still holds big advantages in comparison with foreign retailers, because it is operating on the home market and has deep knowledge about Vietnamese customers. The distribution chain now has a very large distribution network which would continue expanding in the time to come. Co-op now has 57 supermarkets, while it plans to open six more in 2012.

More and more distribution giants have arrived in Vietnam. However, the number of the giants here remains modest if compared with other regional markets. For example, two of the 10 leading retailers in the world in terms of turnover – Wal-mart and Tesco – have been present in India, while they have not entered Vietnam. 

The Chinese market has gathered all the biggest retailers, such as French Carrefour, German Metro Cash & Carry, Tesco and Wal-mart. In nearer markets, such as Thailand, all Carrefour, Metro and Tesco are operating.

Convenience stores mushrooming

In this market segment, analysts say, there would be the appearance of the big guys from Japan, MiniStop and FamilyMart, two of the four Japanese leading retailers in terms of convenience store development have been present in Vietnam. Meanwhile, 7-Elevent and Lawson are also believed to come to Vietnam in 2012.

According to Hashimoto Yuji, a senior executive of FamilyMart Vietnam, a joint venture between Vietnamese Phu Thai Group and Japanese Itochu and Family, said that FamilyMart has had 16 stores, and it plans to open 27 more in 2012.

Other big guys have also been trying to increase their presence in Vietnam. Shop&Go chain now has 68 stores, while the company would continue expanding the chain through franchising.

Amy Wu. CEP of the Red Circle, which is running Circle K Vietnam chain, has said that the chain would increase its number of stores to 40 by 2012, and create a chain of 500 stores in the next five years.

Source: SGTT/ VNN