JLL released a brief report on Asian and European retailers ready to penetrate the market of more than 90 million people.The report pointed out evidence of the expansion of foreign retailers in Vietnam’s market.
At the end of 2014, Berli Jucker Plc (BJC) acquired Metro Cash & Carry Vietnam at the cost of 655 million euros, the largest ever M&A deal at that time, which signaled the penetration into Vietnam’s retail market of Thai groups.
Shortly after, another giant from Thailand – the Central Group – acquired Nguyen Kim – one of the leading electronics retailers in Vietnam and then Big C.
In October 2015, Emart – Korean leading retailer – inaugurated a $60 million shopping mall in north Saigon, where another Korean retailer – Lotte Mart – has been successful with 11 supermarkets and expects to increase the number to 60 stores by 2020.
Most Japanese investors see the success of Aeon in Vietnam as a positive sign for foreign projects. Aeon has opened four trade centers in Vietnam and aims to increase the number to 20 in 2020. By July 2016, another retail giant from Japan – Takashimaya – opened at Saigon Centre.
Simply Mart openedthree more stores in Saigon; AuchanSuper – the retail brand from France – also plans to launch another 17 supermarkets by the end of next year in HCM City and 20 stores by 2020 in the north.
Major fashion brands like Gap, Mango, and Topshop have become the first choice of many young people in Vietnam. In early September this year, Zara opened its first flagship store in HCM City. At the same time, H&M is completing procedures to open its first store in Vietnam early next year.
According to JLL, a young demographic and high growth potential are the factors attracting foreign investors to Vietnam’s retail market.
With a population of over 90 million people and 70% of people aged from 15 to 64 and the anticipated annual growth rate of urban population of 2.6% in 2015 – 2020 period, the highest growth rate in Southeast Asia, Vietnam’s retail market is very attractive to foreign investors.
Increasing disposable income, urbanization rate and living standards have made Vietnam one of the most most dynamic emerging economies in Southeast Asia.
According to Boston Consulting Group, the upper and middle class in Vietnam are growing at the fastest pace in the region and this number is expected to double from 12 million in 2014 to 33 million in 2020. With income of VND15 million ($700)/month, the consumers of these classes are potential customers for retailers.
In addition, Vietnam’s e-commerce boom has also contributed to the growth of the retail market.
A Nielsen report said that that 9 out of 10 consumers in Vietnam (91%) owned smartphones, compared to 82% in 2014.
Na Son