French Decathlon starts Vietnamese retail chain

French Decathlon takes the first step of its Vietnam strategy

This first Decathlon supermarket is only the start for a series of 50 supermarkets nationwide in Vietnam, according to Decathlon’s general director Lionel Adenot.

At a meeting with Nguyen Thi Thu, Deputy Chairman of the Ho Chi Minh City People’s Committee, Adenot said that Decathlon’s long-term strategy in Vietnam was to expand its current activities from manufacturing and distribution to developing a chain of supermarkets.

Decathlon is a group which specialises in the manufacturing and distribution of sports equipment. The firm has been present in Vietnam since 1995, and the country is now the second-largest manufacturing base for the corporation, with more than 200 million products every year, creating jobs for 75,000 labourers and 300 white-collar staff.

According to Adenot, the incoming supermarket will combine a space for retail with a free “playground” for customers’ sporting activities.

The Vietnamese retail market has seen increasing interest from foreign investors recently. Before Decathlon, Sweden’s Hennes &Mauritz (H&M) also announced that it will open its first outlet in Hanoi in 2017. Meanwhile, Zara from Spain opened its first outlet last year, joining its competitors US-based Gap and compatriot Mango.

Japanese investors have also joined the Vietnamese retail market, with famous brand name Aeon that opened a chain of supermarkets in Hanoi and Ho Chi Minh City.

Takashimaya, another giant, opened its first shopping centre in Ho Chi Minh City last year. According to Tatsuo Yano, managing director of Takashimaya Singapore, the Ho Chi Minh City unit was the third overseas department store for the Group.

“This development has come about through years of cultivated retail experience between Japan and Singapore. We aim to create a store that will become a sought-after shopping destination for customers in Ho Chi Minh City,” Yano said.

“The retail store expansion in global markets, mainly the Southeast Asian countries, is an integral part of our development strategy,” he added.

Meanwhile, Korea’s Lotte Group is planning to increase its number of 13 supermarkets in Vietnam to 60 by 2020.

According to the latest report issued by The Economist Intelligence Unit (EIU) earlier this year, a large number of foreign investors are showing interest in the Vietnamese retail market.

EIU forecast that foreign companies will continue expanding their business activities in the coming years. The country’s retail sector receives increasing attention as it posted a strong growth of 13 per cent per year in 2012-2016, according to EIU.

The report also forecasts local consumer spending to rise sharply in the next five years, as Vietnam has a population of around 94 million people, one-third of whom are aged under 35 years.

According to EIU, per capita spending—an important figure for retail growth—will rise from $1,450 last year to $1,840 in 2021.