Why did AEON decide to invest in Vietnam over a decade ago instead of a more dynamic or developed destination in the region at the time?
|Furusawa Yasuyuki, executive officer board member of AEON Co., Ltd. in charge of Vietnam Business, as well as general director of AEON Vietnam |
We started to research the Vietnamese market in 2009 before opening our first shopping mall in 2014. Now, we have eight companies in Vietnam covering shopping malls, retail, finance, services, and exports.
We realise that Vietnam is in a period of rapid and outstanding growth, which is similar to the previous development stage of Japan. Therefore, we believe with AEON’s experiences and know-how accumulated in Japan, we can apply and contribute to the development of Vietnam’s market.
How does AEON evaluate the investment environment in Vietnam?
Japanese businesses want to invest in Vietnam because of various attractive factors. Firstly, with fast population growth, especially in the middle class, Vietnam has high economic development potential. People’s living standards are gradually improving, and Vietnam has a much higher growth rate in comparison to other Asian countries, as well as Japan.
Secondly, Vietnam and Japan have a good diplomatic relationship, with a lot of effort from both sides in promoting strategic cooperation. Besides retail, there are many other fields in which Vietnam and Japan have a long history of cooperation.
The investment environment in Vietnam also keeps changing but, overall, we see more potential than challenges. As a result, Vietnam will continue to attract more foreign investors in the future.
In the next five years, the retail market in Vietnam has a lot of potential for development and, if retail businesses can respond to market changes, they will grow strongly.
What has been the highlight for AEON here over the years, and what role does the retail business in Vietnam play in the group’s global supply chain?
AEON Group has invested a lot in foreign markets, but in such a short time, Vietnam has seen a very high growth rate and high potential that we can expand upon.
Our biggest goal, which we are making every effort to realise, is to become a familiar brand to Vietnamese people as a truly local company that contributes to Vietnam’s development.
Around 90 per cent of products in AEON Vietnam’s stores are local products. Thus, AEON store expansions not only contribute to Vietnam’s commercial infrastructure development, but also promote the consumption of Vietnamese products through our store chain.
Moreover, we aim at providing high-quality products at reasonable prices to customers, along with contributing to the development of local talent in the Vietnamese retail sector.
Today, AEON Group in Vietnam boasts about 8,000 staff. Through our business expansion, we offer thousands of job opportunities to local talent. For example, every time a shopping mall opens, an average of 3,000 new jobs are created in the area, including AEON and tenants.
From 2017 to the end of last year, the total export of Vietnamese products through our retail system to Japan and other countries achieved more than $2 billion. Besides food products, AEON also exports apparel, household items, and health and beauty products from Vietnam to Japan and other countries.
While famous for its sustainable business philosophy, how does AEON Vietnam promote sustainable consumption through your business activities?
As a retailer, AEON identifies sustainable production and consumption as one of our key goals. To achieve this, AEON Vietnam has been implementing many initiatives, aimed at supporting customers and employees to raise awareness and create a habit of making sustainable consumption decisions.
Moreover, we have been coordinating with local suppliers to develop quality private brand products that arre environmentally friendly following AEON standards. These activities are to provide quality products at reasonable prices, to stabilise the supply chain, and to enhance product quality to meet export standards.
What are AEON’s upcoming goals and development plans in the near future?
From 2025 to 2030, we plan to accelerate the expansion of AEON’s network of stores and supermarkets.
In the next 3-5 years, we will still continue to open large-scale shopping malls. However, to meet changing customer behaviours, we will develop multi-formats that are appropriate for the needs of local communities and the actual conditions of local areas with flexible sizes.
AEON will continue to prioritise Hanoi and Ho Chi Minh City, but we will also expand to central areas and neighbouring provinces or cities. We will also continue to introduce Vietnamese products to international markets through our retail system.
In addition, AEON in Vietnam is cooperating with the group’s companies in Southeast Asia to produce Vietnamese-branded furniture. If the quality is stable and well received by the market, AEON will increase production and expand the export of these products.
What suggestions does AEON have to regulatory agencies to create a favourable environment for foreign investors and support the company in achieving its goals?
Depending on the business sector, investors will have different expectations. As a retailer, we understand that there will be differences in legislation in each country. Therefore, we also expect related procedures to be simplified so that we can accelerate our investment here.
As for Japanese businesses like AEON, we will actively work closely with local authorities and communities, as rapid decision-making in the region is essential.
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Vietnam remains an enticing business and investment environment for Japanese investors, especially in the retail sector. Furusawa Yasuyuki, general director of AEON Vietnam, explained to VIR’s Oanh Do how the company is making further efforts to develop its brand while also bringing the best value to customers.
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