Retail awaits breakthrough

January 21, 2023 | 19:00
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Many retailers have announced strategies to expand and increase brand influence in 2023, with the retail sector deemed to have more prospects for stronger development.

Mobile World Investment JSC (MWG) announced its 2023 business direction last month, identifying positive growth in revenues and profits as the most important goal instead of focusing on increasing the number of new stores, as in the previous two years.

MWG’s retail chains will only open new stores in areas with strong potential to bring in profits within three months of opening. Although it has not set a specific target for the number of new stores, it will focus on increasing revenue at each, and controlling operating costs to increase profit.

Retail awaits breakthrough
Shoppers at a supermarket (Photo: VNA)

The corporation is the largest retailer in Vietnam based on size, revenues, and profit, and currently operates three retail chains – Mobile World, Dien May Xanh, and Bach Hoa Xanh, with nearly 4,000 stores.

However, the retailer has not achieved total success as Bach Hoa Xanh, specialising in fresh food and essential consumer goods in the southern market, is struggling. Last year, the chain was forced to close more than 400 stores. The brand encountered problems with unclear selling prices and questions about product quality, which angered customers and saw profits drop sharply.

Meanwhile, Masan Group has not announced a development plan this year, but the local retailer has said it would continue to expand its scale and improve its profit margin by upgrading product quality.

WinCommerce is the bright spot in Masan’s retail system with its outstanding advantage in market share and as the only retail platform that develops supermarket and multi-convenience store models. WinCommerce occupies top position in the Vietnamese market, with approximately half of small supermarkets and convenience stores nationwide.

In 2022, WinCommerce opened 477 new Winmart+ stores and four Winmart supermarkets, bringing the number of Winmart and Winmart+ supermarkets to 132 and 3,000, respectively.

The development of The CrownX is also a way for Masan to expand its influence in the retail sector. Last year, Masan launched nearly 100 Win Life stores under a new model, integrating products from WinMart, Techcombank, Phuc Long, and Dr. Win, contributing to increasing the monthly revenue of stores under the new model by approximately 20 per cent.

The company plans to open more than 1,500 new points of sale, bringing the scale of the whole chain to 5,000 supermarkets and stores in 63 cities and provinces in 2023. If successful, WinCommerce will surpass MWG to become the largest retail platform in Vietnam by the end of this year.

Nguyen Thi Phuong, deputy general director of WinCommerce, said, “Towards the goal of serving 100 million Vietnamese consumers, we will continue to expand our coverage and develop WinMart+ stores in suburban areas and the Win Life ecosystem in urban areas.”

Meanwhile AEON, a retailer from Japan famous for its slow and steady strategy, has also begun new changes. First is the standardisation and expansion of the AEON MaxValu supermarket system, followed by the opening of a new compact general merchandise store model and promoting AEON in-house brands manufactured in Vietnam.

“Our vision is to become an indispensable retailer for local consumers as a Vietnamese enterprise,” said AEON Vietnam general director Furusawa Yasuyuki. “AEON is also focused on digital transformation, especially through our A-Point system, which integrates with other AEON affiliates and our e-commerce website.”

By the end of 2022, AEON boasted around 200 stores in Vietnam, including six shopping centres and supermarkets. The company plans to triple the number of trade centres in Vietnam by 2025.

Meanwhile, Thai giant Central Retail announced an additional investment of nearly $850 million in the Vietnamese retail market in the 2022-2026 period. Central Retail is pouring in capital to boost sales in Vietnam to $2.8 billion, aiming for an omnichannel business in the food and shopping mall sectors. Central Retail plans to expand points of sale in Vietnam from 40 locations to 55.

Contrary to some aggressive expansion plans, South Korean group Lotte has not made any special moves, although in the middle of last year, it declared Vietnam its third-most important market after its home country and Japan. Lotte currently owns 15 shopping centres and Lotte Mart supermarkets in Vietnam, and the group plans to open another Lotte Mall in Hanoi this year.

According to the General Statistics Office, retail was one of the industries with the fastest recovery last year, with a growth rate of 10.1 per cent in 2022. According to the Ministry of Industry and Trade, Vietnam’s retail industry has a market size of $142 billion and is forecast to increase to $350 billion by 2025, contributing 59 per cent of the country’s GDP.

Although experts forecast that the economy in 2023 will face many difficulties due to the economic downturn, Vietnam’s retail market has remained vibrant thanks to income growth, a strong recovery of tourism and related industries, and growth momentum from the consumer demand.

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By Oanh Do

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