Thai companies may dominate Vietnam’s retail landscape

January 14, 2016 | 10:11

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The Vietnamese retail landscape may be dominated by Thai companies if Big C is sold to Central Group.

After Thai company TCC Group, the largest investor of Berli Jucker PCL (BJC), completed the purchase of Metro Cash & Carry Vietnam from German Metro Group earlier this month, rumours started flight that Central Group would finish the purchase of Big C from Casino Group in the first quarter of 2016.

Representatives of Central Group and Big C both denied the rumour. “Following the information that the parent company Casino Group planned to sell Big C Vietnam, we have not got any leads on what the next step would be,” said Ho Quoc Nguyen, director of public relations at Big C. A representative of Central Group also dismissed the gossips as sheer rumour.

The ripples started off after Central Group’s continuous expansion in Vietnam since 2013. The company’s investment wave started with Robinson Department Store (Vietnam) Joint Stock Co opening the first Robins department store in Hanoi and the second in Ho Chi Minh City in 2014.

Last January, Central Group bought 49 per cent of Nguyen Kim through its electronics retail arm Power Buy. Central Group CEO Tos Chirativat said in a statement that he expected Nguyen Kim's network to help Power Buy establish a foothold in the country, paving the way for it to become the leading electronics retailer in Southeast Asia.

Chirativat also expressed plans to make Vietnam become Central Group’s key market in the ASEAN. Big C, which started operation in Vietnam in 1998, is now very popular with 32 supermarkets and shopping centres. Buying into such an established name would prove to be a good strategy to strengthen Central Group’s position in Vietnam, enforcing the efforts of building a brand name from scratch like Central Group did with the two Robins stores.

Last year, it was rumoured that Central Group was negotiating to buy electronics retail chain Pico, but earlier this month the deal fell through, as was declared by Pico.

If Central Group buys Big C, the Vietnamese retail sector may be poised for gradual domination by Thai companies.

In 2013 BJC bought the Family Mart convenience store chain, then belonging to Phu Thai Group and Japanese company Family Mart, and changed its name to B’s Mart. BJC now has 123 B’s Marts in Vietnam.

Earlier this month TCC Group, the main investor in BJC and owned by Thai millionaire Charoen Sirivadhanabhakdi, announced the purchase of Metro Cash & Carry Vietnam for €655 million ($879 million). The purchase is part of BJC’s plans to become a leading regional player covering the entire value chain and to position itself for the ASEAN Economic Community (AEC).

BJC and Metro started negotiating on the sale in August 2014. Aswin Techajareonvikul, managing director and chairman of BJC, said in September 2014 that the Metro deal was BJC’s first of many steps in Vietnam.