The competition in the Vietnamese retail market has been consistently hot over the last decade.
Following Maximark, Ocean Mart and Metro AG, Fivimart closed in October. In the last six weeks, 23 Fivimart supermarkets have merged with Vinmart and were renamed Vinmart.
The deal is part of the plan to expand Vinmart network to every residential quarter.
VinCommerce now owns the largest retail system with 100 Vinmart and 1,400 Vinmart+ convenience stores. The plan of the retailer is to open 200 supermarkets and 4,000 convenience stores by 2020.
Saigon Co-op, the retail chain dominating the southern market, has opened a new supermarket in An Giang province, raising its total number of supermarkets throughout the country to 99. About four to five Co-op Mart and Co-opXtra, and 10 Co-op Food shops are expected in Hanoi and HCMC by the end of the year.
Foreign retailers are also rushing to scale up their operation in Vietnam. Central Group, which runs Big C supermarket chain in Vietnam, inaugurated the GO!My Tho shopping mall in My Tho City of Tien Giang province. The group announced it would pour another $500 million into Vietnam to open 500 more points of sale in the next five years.
Meanwhile, Aeon from Japan and Lotte Mart from South Korea plan to open 20 and 60 supermarkets, respectively, by 2020.
In the convenience store market segment, Vinmart is now leading in a number of retail points, followed by Bach Hoa Xanh chain of The Gioi Di Dong with 405 shops and 500 by the end of the year. 7-Eleven and GS25 plan to open thousands of shops in the next 10 years. Family Mart, which has 130 shops in Vietnam, is planning to open 700 more by 2020.
In 2010, the total retail turnover was $88 billion. In 2015, the figure increased by twofold to $146 billion. The figure of $170 billion was reported for 2017 and is expected to reach $180 billion by 2020.
The rapid expansion and retailers’ ambitious plans may cause people to think that Vietnam has many supermarkets. In Hanoi and HCMC, convenience stores are seen everywhere.
However, a report found that modern retail channels only make up 25 percent of total distribution channels in Vietnam.
Vu Vinh Phu, a renowned trade expert, said that Vietnam still lacks modern distribution facilities. Most supermarkets and convenience stores are located in Hanoi and HCMC.
Phu said the volume of goods queuing up to enter supermarkets is much higher than the demand from retailers. Thus, retailers require high discount rates when choosing goods for their distribution chains.
According to a report on Vietnamnet