Econ
Convenience stores: future of modern trade in Vietnam
The leading convenience store chain with more than 62,000 selling points in the world, 7-Eleven has recently set foot in the Vietnamese market.
Together with the development of other major retail brands that have already operated in the market, many predicted that the convenience stores would gradually replace grocery stores which have been familiar to many Vietnamese consumers for years now.
Increase market share of convenience store
Survey results by Kantar Worldpanel Vietnam, a market research firm, shows street shops including small grocery stores with a scale of under 50m2 and medium ones with scale of over 100m2 in urban areas are profitable, totally not overshadowed by modern shopping channels. Meanwhile, the traditional markets (green markets) received the heaviest impact and decreased its share from 14% to 10%. The modern megamalls and supermarkets increases by 3 percentage points in 10 years, reaching up to 12.8%. Even though online shopping channels have been developing drastically for the past few years, they only earn 0.4% of the share.
According to this survey, convenience stores and minimarts in residential areas are expected to thrive, since Vietnamese consumers are increasingly fancying convenience while shopping. This is the reason why convenience store chain is booming in Ho Chi Minh City and Hanoi. From stores of international brands operating round the clock Shop&Go, Circle K, B’s mart, FamilyMart, MiniStop to Vietnamese convenience stores including Co.op Food, Satra Foods, Vinmart+, each has grown to hundreds of stores and is continuing to expand.
In addition, the data of Kantar Worldpanel on fast consumption sector shows that the share of this sector in four big cities (Ho Chi Minh City, Hanoi, Da Nang and Can Tho) increases from 2% to 3%. In addition, the value (turnover) of the FMCG sector increased by 36% compared to 2015 (only for home consumption). According to the evaluation of this market research firm, the small and convenient retail model is the major driving force for the retailing market growth.
Gradually take advantage
The requirement for convenience stores is to bring all consumer needs for a personal life into a small place, from food, beverages to needles, threads and brushes, toothpaste, stationary or phone memory cards. In addition, they must be organized in an orderly manner.
Customers can even pay their bills, book tickets and withdraw money at a convenience store. On the other hand, most of convenience stores are using part of the store area to sell fast foods. This proves quite an advantage for young customers for quick and diversified service, while it would take a lot of time for lining in queue for payment in supermarkets. While customers merely buy at grocery stores, at convenience stores, customers can enjoy food or sit for hours with laptops connected to wifi. These convenience stores and minimarts are seen as very flexible and quickly adapt to any changes in the customer’s behavior. In addition to its competitive selling prices, they have a good relationship with customers providing a ranges of services from consulting to quick service. However, this kind of business model could only succeed with a large network, thus it is no doubt that the expansion of convenience store chain will continue in the coming time.
Consulting firm A.T Kearney (U.S) has recently published its survey result, in which revealed the model of convenience store and minimart are the fastest developing segment in Vietnam retail market. This year, Vietnam has jumped 5 spots to the 6th place in the Global Retail Development Index (GRDI). In this context, the race for convenience store/minimart expansion is not only involved foreign investors, but also local enterprises such as Co.opFood, Co.op Smile, SatraFoods, Vinmart+, Hapro, Vissan.. Even mobile phone retailer The Gioi Di Dong has entered this market with chain stores named Bach Hoa Xanh (Green grocery store).
On the contrary, grocery stores despite being quite popular due to the shopping habit of a portion customers, but is forecasted to experience a slump in revenue against new trends of shopping in the near future.
Increase market share of convenience store
Survey results by Kantar Worldpanel Vietnam, a market research firm, shows street shops including small grocery stores with a scale of under 50m2 and medium ones with scale of over 100m2 in urban areas are profitable, totally not overshadowed by modern shopping channels. Meanwhile, the traditional markets (green markets) received the heaviest impact and decreased its share from 14% to 10%. The modern megamalls and supermarkets increases by 3 percentage points in 10 years, reaching up to 12.8%. Even though online shopping channels have been developing drastically for the past few years, they only earn 0.4% of the share.
Customers buying goods at a minimart in Thai Thinh Street, Dong Da District.
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In addition, the data of Kantar Worldpanel on fast consumption sector shows that the share of this sector in four big cities (Ho Chi Minh City, Hanoi, Da Nang and Can Tho) increases from 2% to 3%. In addition, the value (turnover) of the FMCG sector increased by 36% compared to 2015 (only for home consumption). According to the evaluation of this market research firm, the small and convenient retail model is the major driving force for the retailing market growth.
Gradually take advantage
The requirement for convenience stores is to bring all consumer needs for a personal life into a small place, from food, beverages to needles, threads and brushes, toothpaste, stationary or phone memory cards. In addition, they must be organized in an orderly manner.
Customers can even pay their bills, book tickets and withdraw money at a convenience store. On the other hand, most of convenience stores are using part of the store area to sell fast foods. This proves quite an advantage for young customers for quick and diversified service, while it would take a lot of time for lining in queue for payment in supermarkets. While customers merely buy at grocery stores, at convenience stores, customers can enjoy food or sit for hours with laptops connected to wifi. These convenience stores and minimarts are seen as very flexible and quickly adapt to any changes in the customer’s behavior. In addition to its competitive selling prices, they have a good relationship with customers providing a ranges of services from consulting to quick service. However, this kind of business model could only succeed with a large network, thus it is no doubt that the expansion of convenience store chain will continue in the coming time.
Consulting firm A.T Kearney (U.S) has recently published its survey result, in which revealed the model of convenience store and minimart are the fastest developing segment in Vietnam retail market. This year, Vietnam has jumped 5 spots to the 6th place in the Global Retail Development Index (GRDI). In this context, the race for convenience store/minimart expansion is not only involved foreign investors, but also local enterprises such as Co.opFood, Co.op Smile, SatraFoods, Vinmart+, Hapro, Vissan.. Even mobile phone retailer The Gioi Di Dong has entered this market with chain stores named Bach Hoa Xanh (Green grocery store).
On the contrary, grocery stores despite being quite popular due to the shopping habit of a portion customers, but is forecasted to experience a slump in revenue against new trends of shopping in the near future.
