VN a rising Asian retail market
HA NOI (VNS) — Viet Nam is on the way to becoming one of the most developed retail markets in Asia, a seminar heard yesterday in Ha Noi.
The Viet Nam Retailers Association (VRA) organised the Viet Nam Retail Forum 2015 with the theme of "Shopping centres and their development roadmap in Viet Nam". The event brought together officials, retail experts, domestic retailers as well as foreign retail firms.
According to Duong Duy Hung, Deputy Director General of the Ministry of Industry and Trade (MOIT)'s Domestic Market Department, total final consumption expenditure accounted for 70 per cent of Viet Nam's gross domestic product (GDP), of which 90 per cent is household consumption expenditure.
Hung added that the modern retail market is increasing its role as an engine of Viet Nam's retail sector's growth.
Before Viet Nam joined the World Trade Organisation (WTO), there had been concerns that the models of traditional and modern retail channels could collapse due to the open-door policies facilitating multinational retail corporations, Hung said.
But Viet Nam retail businesses have adapted step by step, enhancing competitiveness to survive, Hung said.
However, domestic retailers are also facing difficulties. Foreign retail giants have poured money into trade centres and supermarkets, worrying domestic retailers, Hung added.
VRA chairwoman Dinh Thi My Loan said Vietnamese supermarket and retail shop chains had been upgraded, but they still lacked professional factors, competitiveness in pricing, diversification in products and product quality control.
According to the Nielsen market research firm, the middle and affluent class (MAC) in Viet Nam, whose income is from VND15 million (US$714) and above a month, will triple in size between now and 2020 and will be a key group of potential customers for retailers.
According to a report by property services firm CB Richard Ellis (CBRE), Co.opmart supermarket chain owned by Saigon Co.op was named one of top 200 Asia-Pacific retailers in 2015.
However, in the Viet Nam's top 10 retailer 2015 list, the leading position belongs to Saigon Jewellery SJC, followed by Nguyen Kim electronic store chains and the national mobile phone retail giant The Gioi Di Dong (Mobile World).
This report also showed that the overall vacancy of Ha Noi's retail space saw the highest rate in the past five years (up to 20 per cent) while this rate for HCM City has been relatively low, just under 10 per cent. This directly affects average rent in the two cities.
As a result, average rent in Ha Noi has reduced while the figure for HCM City has increased. The rent in the central areas of Ha Noi and HCM City are very high, reportedly amounting to over $120 per sq.m per month in the third quarter of 2015, three times higher than other areas in the cities.
The report also said that 22 per cent of Vietnamese prefer to go shopping in convenience stores rather than in big shopping malls. — VNS