Retail industry gets a big boost in Vietnam
Updated at Sunday, 10 Jun 2018, 10:24
The Hanoitimes - Double digit growth in revenue has made Vietnam’s retail sit atop the list of sectors with the highest number of newly-established enterprises to date this year.
According to the General Statistics Office (GSO), the country’s total revenue from retail sales and services in the first five months of this year maintained a high growth since the beginning of the year, rising by 10.1 percent year-on-year to VND1.75 quadrillion (US$76.4 billion).
Vietnam also received more than 6.7 million international tourist arrivals in the period, up 27.6 percent year-on-year, which also greatly contributed to the rise in total retail service revenue.
Total retail service revenue hit more than US$15.73 billion in five months of 2018.
Seeing high returns from the retail industry, about 17,800 enterprises were established in the wholesale and retail sector in the five-month period, accounting for 33.9 percent of the country’s total newly-established enterprises.
Besides, many existing major retailers have also decided to expand their operation in the country during the months. Japan’s AEON Group has recently commenced to build a US$180 million mall in the northeastern city of Hai Phong. The 9.3ha project is expected to become operational in 2020.
Earlier, the Japanese retailer also began construction of its mall in Hanoi’s Ha Dong district, with total capital of about $90.4 billion. This is the second AEON mall in Hanoi, and the fifth in Vietnam.
Besides AEON, Vietnam’s giant retailer Saigon Co.op also started the construction of its supermarket Phan Ri Cua in the south-central province of Binh Thuan’s Tuy Phong district. This will be the third supermarket of Co.opmart in Binh Thuan, covering 7,000 square meters and costing VND70 billion ($3.1 million). The project is expected to be put into use later this year.
Earlier, the Vietnamese leading retailer also put into operation its 88th supermarket in Vietnam – Co.op Mart Chu Van An in Ho Chi Minh City’s Binh Thanh district.
Owning 130 stores in Vietnam, Japan’s Family Mart is also planning to open another 700 stores by 2020.
The same move is also seen with Japan’s 7-Eleven, which plans to open 100 stores in three years and 1,000 stores in the coming decade in Vietnam after entering the market mid last year.
South Korea’s Lotte Mart plans to open 60 stores in Vietnam by 2020 while its fellow-countryman GS25 also plan to open 2,500 stores in ten years in the Southeast Asain market after launching its first shop in Ho Chi Minh City in late 2017.
Vietnam has been one of the world’s most attractive markets for retail investment, ranking sixth in the Global Retail Development Index (GRDI) of A.T. Kearney.
According to trade expert Vu Vinh Phu, there remains large potential for the future growth of Vietnam’s retail market.
Vietnam has a population of 96 million. There are currently 1,765 convenience stores in Vietnam. That is to say, there is approximately one convenience store per 54,400 Vietnamese citizens. To put this into perspective, there is one convenience store per 24,900 persons in China, one per 2,300 persons in Japan and one per 2,100 persons in South Korea as at the end of 2016.
Mapping out the country’s trade development, the Ministry of Industry and Trade said that the annual growth rate (excluding the price factor) of the total revenue from retail sales of goods and services for the period from now to 2020 will average at 13 percent per year, and rise to 14 percent in 2021-2025, reaching $5.8 quadrillion ($255.5 billion) by 2020 and over VND11 quadrillion ($484.58 billion) by 2025.