E-mart ready to play the retail game

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The retailer, which has 127 stores across its home country and 25 stores in China,  late last week signed a joint venture contract with Binh Duong province-based U&I Investment Corporation to jump into Vietnam.

E-mart will be the second  Korean retailer to enter Vietnam after Lotte Mart.

Under the $80 million contract, E-mart will contribute 80 per cent of the capital and the rest from U&I.

E-mart is set to open its first convenience store in Hanoi in 2012 and expand its stores in Vietnam to 52 before 2020.

Japanese retailer AEON Co Ltd, well known for it Jusco supermarket chain, also plans to enter Vietnam by 2013. With annual gross revenues of around $15 billion, AEON expects to become one of the three leading retailers in Asia in 10 years, in which Vietnam would become AEON’s fourth foreign market after China, Thailand and Malaysia.

Steven HL Goh, director of Retail Asia Publishing, said that compared to other retail markets in the region, which were already saturated, there were still numerous development opportunities for Vietnam’s retail market. 

He noted along with big names such as Hong Kong’s Dairy Farm, Korea’s Lotte  and Netherlands’s Guoco Group, which have formed large-scale shopping centres in Vietnam, many world-leading retailers have also carried out investment cooperation programmes to invest in Vietnam.

In late 2010, Japanese company Ministop, which manages a convenience store chain, decided to cooperate with Trung Nguyen Company to open about 500 retail stores in the next five years.

Singaporean brand NTUC FairPrice has signed a cooperation agreement with Saigon Co.op to build a chain of hypermarkets.

A survey conducted in the fourth quarter of 2010 by Grant Thornton Vietnam showed that 70 per cent of correspondents considered retail as a more fascinating and promising investment field than others such as education, real estate and healthcare.

Vietnam’s retail sale and service revenue is predicted to increase to more than $85 billion in 2012.