Convenience stores are about to have their entire market share 'swallowed' by foreign businesses

Foreign enterprises account for 70% of the market share in convenience store retail channels and half of the online sales market share in Vietnam, according to a report by the Ministry of Industry and Trade.

According to the report on domestic trade situation of the Ministry of Industry and Trade, in 2016, FDI enterprises accounted for 70% of retail market share through convenience stores; about 50% of market share through online sales, television, telephone...; about 17% of market share through shopping malls, supermarkets; 15% of market share through mini supermarkets.

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Domestic enterprises are under more pressure due to the rapid increase in imported goods from other countries thanks to cheaper prices, quality, and diverse designs, as well as the increase of foreign suppliers.

Many world-famous convenience store chains such as Ilahui (Korea), Miniso, Daiso (Japan), Circle K... have appeared more and more in Vietnam, especially in big cities. 7-eleven will enter Vietnam next year. Meanwhile, in Vietnam, it seems that only Vinmart has enough strength to compete with foreign rivals.

As for the retail market share through shopping malls, supermarkets and mini-supermarkets of FDI enterprises, which only accounts for 15-17%, domestic enterprises still have room to develop. However, the pressure on domestic enterprises is increasing as a series of large supermarkets fall into the hands of Thai, Japanese and Korean giants after mergers and acquisitions (M&A).

Last year, notable deals included Thailand's TCC Group acquiring Metro Cash & Carry with 19 centers nationwide and related real estate worth 655 million euros (equivalent to 848 million USD). Thailand's Central Group spent 1.05 billion USD to acquire the Big C system including 33 supermarkets and shopping centers. Previously, in 2015, Central Group also spent more than 100 million USD to acquire the number one retailer in the Vietnamese electronics market, Nguyen Kim.

Large corporations such as Lotte, Aeon... also plan to expand their market share in Vietnam by adding more shopping malls or shopping centers.

According to statistics from the Ministry of Industry and Trade, total retail sales of goods and social consumer service revenue last year was estimated at 3.53 million billion VND, an increase of 10.2% compared to 2015. Retail sales of goods in 2016 alone were estimated at 2.67 million billion VND.

According to Hoang Duong/baotintuc