How are Japanese investors conquering Vietnam's retail market?
7-Eleven has announced it will open its first shop in Vietnam on June 15. Aeon, MiniStop and FamilyMart have already joined one of the fastest growing retail markets in the world.
The first 7-Eleven is located on the ground floor of Saigon Trade Center in the central district 1 in HCMC, the commercial hub of Vietnam. The retail giant has decided to jump into the Vietnamese market sooner than predicted by Nikkei.
7-Eleven will be the third Japanese convenience store brand in Vietnam, after FamilyMart and MiniStop. Vietnam is the 19th market that 7-Eleven sets foot in.
The arrival of 7-Eleven in Vietnam is foreseeable. Vietnam is considered the ‘magnet’ that attracts international retailers thanks to the a population of 90 million, with young people with increasingly high income, and rapid urbanization.
Aeon Mall has been expanding its network in Vietnam. The retailer in March announced the opening of one more shopping mall in Ha Dong district. The project, valued at $200 million, or VND4.5 trillion, is expected to become operational by 2019.
This will be Aeon’s fifth shopping mall in Vietnam. To date, Aeon has poured $600 million into five malls. However, it has just gone one/fourth of the way it has set for itself.
When opening Aeon Binh Tan in June 2016, a representative of Aeon said though some difficulties exist, the retailer still wanted to open 20 Aeon Malls in Vietnam by 2020.
Aeon now holds 49 percent of stake of Citimart and 30 percent of stake of Fivimart.
Aeon has been expanding since 2008 when it came to Vietnam. In 2011, the giant's first cooperation deal with Trung Nguyen to open G7 – Ministop, a convenience store chain. However, the partnership only lasted until February 2015.
After breaking up with Trung Nguyen, Aeon teamed up with Sojitz to open 200 shops within three years.
Takashimaya is another well-known Japanese name in the Vietnamese market. It reportedly has invested $47 million in Vietnam since 2012.
The money has been injected in Saigon Center and other real estate.
Many other Japanese businesses are also interested, but they enter the market through partners. ACA Investments, for example, has acquired 20 percent of stake of Bibo Mart.
When asked by Forbes Vietnam about competition with other brands on the occasion of the opening of the first 7-Eleven, Vu Thanh Tu, CEO of Seven System Vietnam, the partner in the franchise contract said the market is very large.
Kim Chi, VNN