Although foreign retailers have increasingly expanded their store chains in the Vietnamese market, domestic firms remain dominant, especially in the fast moving consumer goods (FMCG) sector, said Nguyen Huy Hoang, commercial director of the market research firm Kantar Worldpanel Vietnam.
At a seminar on retail trends in the Vietnamese market by 2020, held in HCM City on November 7, Hoang noted that local retailers held the lion’s share of Vietnam’s FMCG market and had left a 27% share to their international rivals as of last quarter.
Giant foreign retailers have mainly served customers in large cities, including HCM City, Hanoi, Danang and Can Tho, and their market share in the FMCG sector is only 32%, well below 68% held by domestic retailers.
Nevertheless, Hoang and retail experts agreed that the local retail market has potential as the country is benefiting from the stable macroeconomy and the high economic growth as well as rises of people’s disposable incomes.
At the seminar, Bob Hayward from international consulting group KPMG remarked that the Vietnamese retail market has reported fast growth but is still attractive to foreign investors.
Among retail business models, convenience stores and minimarts have reported the highest growth rates.
According to property consultancy Savills Vietnam, HCM City is now home to more than 1,000 minimarts and convenience stores of various brands, such as Family Mart, B’s mart, Circle K, Ministop, Shop&Go and Vinmart.
The penetration of 7-Eleven and GS 25 into the domestic market has also made the market more competitive.
Therefore, Hayward urged retailers to employ advanced technologies in their business activities to provide consumers with new shopping experiences and better services.
Jason Moy, managing director of Boston Consulting Group, suggested retailers develop digital marketing and online shopping apps.