VF Franchise Consulting

Five trends in Vietnam retailing

Jul 22, 2015

Aeon

Vietnam’s retail market is set to grow by 8.4 per cent by 2020, making it one of the fastest-growing markets in south-east Asia.

Against a backdrop of increased disposable income, rapid urbanisation and an appetite for change among younger shoppers, we take a look at five trends defining the marketplace for pan-Asian retailers right now.

Confident investment

January 2015 marked the first time non-domestic retailers could take full ownership of commercial property in Vietnam, following commitments made to the World Trade Organisation. Now, new trade agreements with Japan, Korea and the countries that make up the Association of South-East Asian Nations (ASEAN) look set to support further growth for international retailers in Vietnam:

International retailers in VietnamTailoring the best of international retail

Domestic retailers may have the advantage when it comes to local shopper knowledge but
international retailers are drawing on their own strengths to help them compete.

Dairy Farm, FamilyMart and Aeon have brought their expertise in loyalty schemes, private label and innovative marketing to their stores in the region.

Other points of difference include appealing to busy office workers with a fast food to go counter (seen at Family Mart and B Mart) and bringing an international flavour to the in-store hot food offer (Aeon Mall).

Alternative store concepts

Many retailers have established themselves in Vietnam with a hypermarket presence in one of the major retail hotspots like Hanoi or Ho Chi Minh City.

Lotte and hypermarket chain Aeon are appealing to families and experimental shoppers with department store formats that act as wider shopping and entertainment destinations. Aeon is also making its mark with a loyalty scheme that includes tailored offers for mums – such as birthday treats or discounts on babycare.

Membership card Aeon

In the convenience channel, Guardian is the first combined-format health, beauty and drugstore in Vietnam. The store is making waves with its clean layout, colourful signage, bold promotional activity and sales assistants offering a superior level of service.

Guardian

Product innovation for a changing market

A new concept in Vietnam, private label is appealing to young, experimental shoppers thanks to its lower prices and alternative products.

Aeon has introduced its TopValu private label range, which taps into the popularity of Japanese culture by offering authentic Japanese ingredients and home cooking kits. The retailer is now working with local suppliers to explore domestic production.

Aeon's product

An increasingly affluent middle class is also supporting demand for exclusive and imported novelties. Dairy Farm is well-known for attracting these shoppers with its packaged food, household, health and beauty ranges.

Expanding to national coverage

A priority for most retailers is to create a nationwide presence. Lotte has built a network of ten hypermarkets spanning six big cities across Vietnam, making them the first pan-Asian retailer to achieve such a spread of coverage. Meanwhile, Ministop (Aeon), Guardian (Dairy Farm) and Shop&Go are pushing their convenience format in retail hotspots.

Major retailers are seeing good growth from their franchise models, making partnerships, mergers and acquisitions hot topics.

Aeon has partnered with local retailers Citimart in the south of the country and Fivimart in the north. The domestic chains are helping Aeon speed up its expansion plans by using their existing store networks. In return, their own customers are benefitting from the retail giant’s private label ranges and investment in infrastructure.

Source: insideretail.asia

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