Mega-markets to wage mega-battle

Can you explain the  venture’s mega-supermarket model?

The joint venture, with the chartered capital of $6 million of which 64 per cent was contributed by the local partner, will develop two mega-supermarket chains throughout the country under the brand names Co.opXtra and Co.opXtra Plus.

We are expected to annually launch one to two mega-supermarkets of the two brands in big cities. The first Co.opXtra Plus worth $9 million put into operation in Ho Chi Minh City’s Thu Duc district last week marking a Saigon Co.op’s new step forward with mega-supermarket model.

The Co.opXtra brand model is similar to Big C that is for individual consumers and households, while Co.opXtra Plus is like Metro Cash & Carry and targets corporate buyers like enterprises, factories, schools, restaurants and hotels. The wholesale customers will get lower prices.

Is the time right for the  mega-supermarket model?

I think that it is the right time to open mega-supermarket based on characteristic of local residents, customers’ demand and the domestic economic situation. Vietnam, with the population of around 90 million now, still shows lots of potential.

The standard of living in Vietnam is improved significantly in the recent years. Vietnamese customers’ demands, hence, become bigger and bigger.

Vietnam’s retail market is getting hotter with both foreign and local retailers who continue enlarging its market share and diversifying its models from supermarkets, mega-supermarkets, distribution centres and multi-brand-retails.

The development is not only confined to the store number of each model, but also stretches to professionalism level in the face of stiff market competition.

Existing retail models are far from enough. Vietnamese customers should be given a chance to enjoy new retail models with goods in abundance at affordable prices where they would get interesting shopping experiences with a range of entertainment and relaxing services such as cinemas, game areas, coffee shops, food outlets and restaurants.

At present, serviced buildings, trade centres, high-rises, and mixed-use complexes are mushrooming, particularly in some major cities such as Hanoi and Ho Chi Minh City.

A 4,000 to 10,000 square metre mega-supermarket, with around 30,000 to 50,000 products on display, would be a stunning venue to individual consumers and households. Besides, at mega-supermarkets, customers would be served with diverse entertainment and relaxing services.  Meanwhile, a 9,000 to 10,000sqm mega-supermarket, mostly wholesale, will meet the demand of diverse customer groups from households to factories, schools, restaurants and hotels.

Considering the likes of  Big C, Metro Cash & Carry, Lotte Mart and newcomers such as France’s Auchan or Japan’s Aeon, how do you assess  the competition now?

Vietnam’s retail market still has great room to develop. The market has tremendous potential and has made for competition increasing fiercely among retailers, even veteran ones. Besides, the retailers have also tried to diversify business models to effectively tap diverse market segments.

Modern retailing in Vietnam like supermarkets and shopping malls only accounts for around 20 per cent of the market, according to the Association of Vietnam Retailers. The country expects to double this rate by 2020. At present, this figure in Indonesia is 43 per cent, Thailand 46 per cent, Malaysia 53 per cent and China 64 per cent.