Vietnam’s convenience store market not easy to exploit
While 7-Eleven expands its business in the Vietnamese retail market, Family Mart has decided to stop injecting more money into the chain in Vietnam because of losses.
A survey by Kantar Worldpanel found that one-third of Vietnamese households now buy goods at small supermarkets and convenience stores.
The retail model is favored thanks to a lot of advantages. Convenience stores provide essential goods for people’s daily use, while the products have clear origin.
Besides, the stores are located in residential quarters, thus making it easy for people to seek to buy things they need. Most of the stores open for 16-24 hours a day.
A report of Nielsen shows that convenience stores have boomed in the last three years.
The growth rate of convenience stores and mini supermarkets in Vietnam is up to 200 percent. There were only 1,000 stores in 2012, while the figure had reached 2,000 by the end of 2015.
Meanwhile, IGD, a market survey firm, has predicted that convenience store chains in Vietnam would see 2-digit growth rates in the next four years before reaching 37.4 percent by 2021.
FamilyMart, B’s mart, Circle K and Vinmart+ are the best known names in the Vietnamese market. However, the market is expected to become even more crowded with the arrival of the giant from Japan – 7-Eleven, belonging to the Seven & I Holdings Group.
Nikkei reported that 7-Eleven signed a franchise contract with Vietnam’s Seven System in mid-2015. The company plans to open 100 shops in Vietnam within three years and 1,000 shops within 10 years. The first store is expected to open in February 2018.
The optimistic predictions about the Vietnamese market, plus 7-Eleven’s strong determination to expand its network in Vietnam, all seem to make people think that Vietnam is a lucrative soil to cultivate.
However, while 7-Eleven is injecting big money into Vietnam, Family Mart has decided to stop pouring money into the market.
Reuters reported that while Family Mart is making a profit in Taiwan and China, it is taking losses in Thailand, Vietnam and Indonesia. This has led to the chain’s decision to stop injecting more money into Family Marts in Vietnam.
FamilyMart is a big convenience store chain in its home country of Japan. By February 2015, the chain had stores in eight countries and territories, mostly in Asia, with 16,970 stores.
In 2009, FamilyMart entered the Vietnamese market with the first store opening in December.
Kim Chi, VNN