Who is the most profitable retailer?
VietNamNet Bridge - Analysts several years ago predicted that foreign retailers, with their powerful financial capability and experience, would dislodge Vietnamese retailers out of the home market. But their business results have become worse.


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VnExpress quoted experts as saying that, even while they were making M&A deals and increasing investment, foreign retail chains such as Big C, Lotte and Aeon still has revenue far below Vietnamese retailers.

Established as a small cooperative with the first supermarket on Cong Quynh street in district 1, HCMC, Sai Gon Co-op has become the leading retail brand in Vietnam. After 20 years of development, the retail chain now has 100 supermarkets, three hypermarkets, three shopping malls and 450 Co-op Food and Co.op Smile shops.

In 2017, Saigon Co-op reported turnover of VND30 trillion, an increase of 7 percent compared with 2016.

Analysts several years ago predicted that foreign retailers, with their powerful financial capability and experience, would dislodge Vietnamese retailers out of the home market. But their business results have become worse.

Joining the market later than other rivals, Vingroup has quickly surpassed its rivals in expanding its network and business performance.
 
Its supermarkets and convenience stores brought VND14 trillion in revenue to the group in 2017. In the future, retailing is expected to bring 50 percent of total revenue of the group.

Analysts say that Vingroup is pursuing a wise strategy when cooperating and supporting domestic producers. It signed contracts with 250 Vietnamese businesses under which the businesses can bring their products to Vinmart+ network with the discount rate of zero percent.

Bach Hoa Xanh is also a new comer in the retail market, though its ‘father’ The Gioi Di Dong, is a big player in the mobile phone distribution market. The chain’s gross profit margin grew from 12 percent in 2017 to 14 percent in the first quarter and 16 percent in the second quarter of 2018. 

In the first nine months of the year, it had turnover of VND2.8 trillion from 409 shops, up by 235 percent over the same period last year.

Aeon, a foreign retailer, which has been in Vietnam for 10  years, has also gained satisfactory business results.

In 2016, Aeon Vietnam reported revenue of VND3.883 trillion, three times higher than 2014, and pre-tax profit of VND54 billion. The profit was VND234 billion in 2017.

While other retailers are thriving, Big C, a big brand is seeing its revenue decreasing. Six years ago, Big C was among top three retail brands with the annual turnover of VND10 trillion. 

But in the last two years, the revenue has been decreasing. Big C Thang Long, the biggest supermarket of the chain, has seen revenue drop from VND3.5 trillion in 2012 to VND2.7 trillion.

Having higher revenue growth rate, Lottemart reported negative profits. The retailer from South Korea reported an accumulative loss of VND800 billion by the end of 2017.


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Mai Chi

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