Customer focus key to retail success

How do you assess Vietnam’s retail market and how well do think foreign retailers have done?

There’s been a lot of change in the retail sector in Vietnam over the last decade or so. What’s especially impressive to me is just how much modernisation the sector has experienced. A number of the large malls that I visited in Hanoi certainly wouldn’t look out of place in other major cities in Asia or even Europe. I also think that there are a lot of foreign retailers with a considerable interest in Vietnam as a place to invest in and to grow in. Certainly, in the UK we’re very aware of the potential in Vietnam. Yours is a country that’s rapidly modernising and many Vietnamese shoppers are clearly wanting to shop in modern environments and buy modern brands and products.

I’m also impressed, certainly in Hanoi, by how many young people are using mobile phones and want to get information from their mobiles. Again, this is something that we’re very familiar with in Europe. So I feel I can start to see the development of internet shopping emerging in Vietnam over the next few years.

Foreign retailers such as Big C, Aeon, Lotte and more recently Central Group and BJC have developed operations in Vietnam. What is your opinion of competition among the foreign players and the impact on domestic retailers? What’s your assessment of Vietnam’s retail market share?

I think that BigC, Aeon, Lotte, Central and BJC are all impressive businesses which have developed a very strong presence in their home markets where they are highly regarded and trusted by a lot of shoppers. All of these businesses have to be respected as very skilled retailers and, as such, they will be formidable competitors wherever they operate.

The challenge for established local Vietnamese retail businesses is to work out how they need to change in order to compete effectively and what parts of their business they can use or leverage in order to improve their competitiveness. If you use the entry of formidable foreign retailers to raise your own competitiveness, then this can be a great opportunity for established Vietnamese retailers.

It’s also the case that when you’re in a market which is growing as quickly as Vietnam, there can be room for everybody. I certainly don’t take the view that growing competition from foreign retailers has to be bad news for Vietnamese retail businesses. There’s also often interesting opportunities for local businesses to supply products to the foreign retailers, and this too can be a strong source of growth.

In your opinion as a retail industry expert, what trends are likely to affect Vietnam’s retail market?

From my European and US perspective, I feel that it is the rapid growth of technology which is the defining feature of how the retail industry is being changed.

One of the most important developments in the UK, Europe and the US right now is the huge growth in enthusiasm for shoppers to buy products remotely using their mobile phones and tablets and without going into stores at all. For many shoppers it’s a lot more convenient for them to shop this way than to battle their way through traffic to get to a store. I know enough about Hanoi to know that traffic in this great city can be a real challenge, too!

So, in the UK as a case in point, many retailers are now seeing 20, 30 or even 40 per cent of their sales being made online rather than in store. This is very exciting and it creates a lot of opportunities. But it also raises important challenges too.

So this is something that I urge retailers in Vietnam to keep a very close eye on. I feel too that the experience in Europe and the US, as well as in other parts of Asia, is that shoppers want ever-better experiences in their stores and shopping centres.

They expect better service, more interesting products and more engaging displays of merchandise. They also expect there to be a lot of enjoyment in their trips to shopping malls. Retailers and property developers need to think constantly about how they can create better experiences for shoppers.