Last July, GS Retail set up a joint venture namely GS25 Vietnam with Son Kim Group, one of Vietnam’s leading privately owned retailers with plan to open 2,500 convenience stores in Vietnam in the next 10 years. As such, Vietnam will be the first foreign market of GS Retail, for which the company will look for opportunities in other markets after cementing its status in Vietnam.
First convenience store of GS25 will be launched in Vietnam on January 19.
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Son Kim Group is one of the top three lingerie and underwear retailers in Vietnam. The group is well-known for its underwear stores across the country. Since 2012, the group also partnered with GS Home Shopping to develop a home shopping channel. One of Son Kim's lingerie shops in Ho Chi Minh City has been converted into the first local GS25 store.
The growing trend in Vietnam for internet shopping is one of the reasons why Son Kim is converting its shops into convenience stores, as it moves to modernize its retail approach. E-commerce sales in the country were estimated to grow 25% in 2017, from $5 billion in 2016.
Meanwhile, GS Retail is one of the two largest convenience store operators in Korea. In addition to the GS 25 network, GS Retail also operates GS Supermarket, Watsons (drug store franchise in health and beauty sector) and Parnas Hotel (leading hotel brand in the world).
With population of 90 million in golden age, Vietnam is seen as one of the fastest growing retail markets in the Southeast Asian region, attracting interests from both domestic and foreign investors. At present, Vietnam’s retail market is expanding rapidly with two-digit growth rate annually. While the total revenue from the retail sector in 2010 was 88 billion USD, in 2016 this number has increased to 158 billion USD, far exceeding forecasts of market study companies.
Vietnam still has room for modern retail channels including convenience stores to grow, especially in second-tier cities and rural areas. The convenience segment is expected to account for 45% of total retail sales by 2020, from 25% currently, according to analysts. Statistics also showed the country's retail sales were $129.5 billion in 2017, an increase of 10.9% year-on-year. Based on estimation of the General Statistics Office of Vietnam, by 2020, the growth rate of the retail sector in Vietnam will reach 11.9% per year, with the market scale of 179 billion USD.
Convenience stores have been booming across Vietnam in recent years, with the aggressive expansion of foreign brands that now hold a combined 70% of the market share, including Circle K, B's Mart, Family Mart, Ministop and 7-Eleven.
