Econ
Convenient stores dominating Vietnam’s retail market
The wave of convenient stores is taking the Vietnam’s retail market by storm with diversified products, reasonable price and service quality
As such, customers can now 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.
A kind of retail revolution is taking place in Vietnam convenience-store sector, as stores find a competitive edge by adjusting product offerings based on time of day, and offer a level of service on par with regional and international standards. Such efforts are helping bring prosperity to the country's convenience-store business.
Take the VinMart Plus chain of stores operated by Vietnamese property developer Vingroup. Since 2016, when the company began opening stores in earnest, the number of VinMart Plus stores has increased rapidly, topping 1,000 as of September. That is well ahead of the second-largest convenience store chain, Japan's FamilyMart, which expects to have 150 stores by the end of this year. Many of the stores in Hanoi and Ho Chi Minh City are tiny and narrow, occupying less than 100 sq. meters.
A VinMart Plus outlet on the Le Duan street in Ho Chi Minh City is a good example. It was opened after the renovation of a rental photography studio. The store is only 3-4m wide, a space unlikely to be used for a convenience store in Japan. The narrowest aisle is just 90cm, much less than aisles in stores in Japan and other advanced economies. Although customers cannot even pass one another in this cramped space, they do not seem to mind, as most stores in Vietnam are small.The staircase and the second floor have been converted into a warehouse. The store is, in principle, managed by two employees, with 10 or more security cameras to monitor customers.
The most distinctive feature of VinMart Plus stores, including the one on Le Duan street, is the product display, which changes according to the time of day. Since August, VinMart Plus stores have been switching merchandise on displays from vegetables and processed foods to ready-to-eat foods after 4 p.m., which the company calls the "golden time for housewives." After 4 p.m., the section highlights simple fare, such as fried spring rolls, stir-fried bitter gourd and other dishes that are finding popularity among housewives in Vietnam.
At the same time, the stores give 10-20% discounts on some products. These methods are proving successful, luring customers from traditional markets and supermarkets into the VinMart Plus store. Evidently, the number of housewives who regularly use VinMart Plus store has increased significantly.
Daily sales at the Le Duan outlet come to about 16 million dong ($700). The top-selling categories are alcoholic drinks and beverages, snacks and ready-to-eat food, as well as vegetables. Delivery services for homes within a 700m radius of the company's 22 outlets in Hanoi began on Oct. 5, with the number of customers rising sharply. Vingroup plans to increase the number of VinMart Plus outlets to 3,000 by 2018 and 10,000 by 2019.
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).
Convenient stores dominating Vietnam’s retail market.
|
A kind of retail revolution is taking place in Vietnam convenience-store sector, as stores find a competitive edge by adjusting product offerings based on time of day, and offer a level of service on par with regional and international standards. Such efforts are helping bring prosperity to the country's convenience-store business.
Take the VinMart Plus chain of stores operated by Vietnamese property developer Vingroup. Since 2016, when the company began opening stores in earnest, the number of VinMart Plus stores has increased rapidly, topping 1,000 as of September. That is well ahead of the second-largest convenience store chain, Japan's FamilyMart, which expects to have 150 stores by the end of this year. Many of the stores in Hanoi and Ho Chi Minh City are tiny and narrow, occupying less than 100 sq. meters.
Many of the stores in Hanoi and Ho Chi Minh City are tiny and narrow, occupying less than 100 sq. meters.
|
The most distinctive feature of VinMart Plus stores, including the one on Le Duan street, is the product display, which changes according to the time of day. Since August, VinMart Plus stores have been switching merchandise on displays from vegetables and processed foods to ready-to-eat foods after 4 p.m., which the company calls the "golden time for housewives." After 4 p.m., the section highlights simple fare, such as fried spring rolls, stir-fried bitter gourd and other dishes that are finding popularity among housewives in Vietnam.
At the same time, the stores give 10-20% discounts on some products. These methods are proving successful, luring customers from traditional markets and supermarkets into the VinMart Plus store. Evidently, the number of housewives who regularly use VinMart Plus store has increased significantly.
Daily sales at the Le Duan outlet come to about 16 million dong ($700). The top-selling categories are alcoholic drinks and beverages, snacks and ready-to-eat food, as well as vegetables. Delivery services for homes within a 700m radius of the company's 22 outlets in Hanoi began on Oct. 5, with the number of customers rising sharply. Vingroup plans to increase the number of VinMart Plus outlets to 3,000 by 2018 and 10,000 by 2019.
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).
