Vietnamese investors pour money into convenience stores
VietNamNet Bridge - The growth rate of convenience store chains is now much higher than that of supermarkets and other retail channels.


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According to research firm Nielsen, with one shop for 69,000 people in the modern retail market (convenience stores and minimarts), there are still many spaces in the market.  Therefore, more and more convenience stores and minimarts will open in the future.

Saigon Co-op has officially put Co.op Smile, a modern grocery store chain, into operation. The shops of the chain cover areas of between 20 and 200 square meters, located in residential quarters in the inner city and suburbs. 

The mostly distribute food, cosmetics, consumer goods and clothes. They also provide basic services such as collecting post-paid telecom bills and cable TV subscription fee.

Meanwhile, Satra Foods is busy developing its convenience store chain with 105 shops while the owner of Bach Hoa Xanh chain plans to open 350 mini shops in 2017, providing food and essential daily goods.

Satra Foods is busy developing its convenience store chain with 105 shops while the owner of Bach Hoa Xanh chain plans to open 350 mini shops in 2017, providing food and essential daily goods.

Retailers are expanding their networks by opening more and more shops, present in every corner of the city and every residential quarter. However, they are meeting difficulties in implementing the plan, including the lack of skills in managing small shops and shortage of suitable retail premises.

Tran Van Bac, deputy general director of the Saigon Trading Corporation (Satra), said retail groups all are looking for retail premises in advantageous positions, which has pushed rents to sky-high levels. 

Nguyen Ngoc Hoa, deputy director of the HCMC Industry and Trade Department, said that the convenience store model is attractive in retailers’ eyes, and that convenience stores are now developing more rapidly than other retail channels.

According to Hoa, the biggest challenge for small retail shops is the organization of goods supply, logistics and management. In these fields, foreign invested enterprises have more experience than domestic investors.

In principle, retailers need to develop many shops to cut management and operation costs. Therefore, in the first phase of development, enterprises have to accept losses to expand their networks.

“I think it would be better to both develop shops and push up the franchising at the same time,” Hoa said.

Regarding the problems in retail premises, Dao Xuan Khuong, an expert in distribution and retail, commented that in modern times, good business mode will bring bigger advantages than good positions. 

This is because modern consumers don’t have to go to stores to do shopping, but they can do this from home.

A survey by Nielsen showed that the number of consumers buying goods at modern retail channels has increased by three times, from 5 percent in 2012 to 16 percent now.


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Tran Thuy

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