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Convenience stores thriving in Vietnam

Xinhua, August 12, 2015 Adjust font size:

Vietnamese consumers are making their way from traditional markets into air-conditioned, brightly-lit convenience stores, local online newspaper Thanh Nien (Young People) News reported Wednesday.

Vietnamese conglomerate Vingroup is expected to hire 10,000 employees to serve its expansion of supermarkets and convenience stores this year. The company says it will launch about 50 supermarkets and 360 convenience stores.

But it is foreign investors that are driving the growth of the local convenience store market. In February, U.S. chain Circle K opened its 100th outlet in Ho Chi Minh City. It has planned to launch 150 convenience stores in Vietnam this year.

Singaporean Shop&Go has opened 126 stores since its arrival in 2005, becoming the leading convenience store chain in Vietnam. More competition is expected as 7-Eleven, a major Japanese company, has also announced plans to enter the market in 2017.

Another Japanese retailer, FamilyMart has already established a foothold in Ho Chi Minh City.

Dinh Thi My Loan, chairwoman of the Association of Vietnam Retailers, said convenience stores expand in the context that local people, with higher income, have a stronger demand for higher quality of goods and services, compared to a few years ago. They often opt for convenience stores instead of small grocery shops and traditional markets for their shopping, Loan said.

According to a recent report of Nielsen, consumers have shifted away from wet markets and traditional trade stores in recent years.

The share of wet markets and traditional grocery stores respectively declined 5 percent and 17 percent in 2014 compared to 2012. Customers' visit frequency also decreased, said the report. Meanwhile, the need for convenience stores continues to grow, especially in urban areas in Vietnam.

Convenience stores rose from 147 stores in 2012 to 348 in 2014, while mini-supermarkets increased from 863 outlets in 2012 to 1, 452 in 2014. Nielsen attributed the growth in a large part to the increase of "time-poor and predominantly young shoppers" in the country.

Retail and consumer services sales grew 6.3 percent last year to 138.2 million U.S. dollars, outpacing the 5.6 percent growth in 2013, according to official data. Endi