The local retail market is forecast to grow at a double-digit rate in 2021, so domestic retailers have rushed to open new stores across the country to expand their market share since the beginning of the year. 

Customers shop for food at a newly-opened Finelife Supermarket
Urban Hill in HCM City  (Photo: congthuong. vn)

Earlier this week, Finelife - the high-end supermarket system of Saigon Co.op - opened its fourth store in Ho Chi Minh City’s District 7. The store, named Finelife Supermarket Urban Hill, stocks more than 17,000 local and imported organic products like fresh and processed foods, cosmetics, deli foods, fruits, vegetables, beverages and more.

Finelife Supermarket Urban Hill is the first high-end supermarket in Vietnam to use automatic e-label technology and is also the first local supermarket to have self-checkout counters.

Earlier in January, Saigon Co.op said it launched new Co.op Food stores in Phu Yen, Soc Trang, Can Tho and Ca Mau provinces.

By 2025, Saigon Co.op plans to expand its network to at least 2,000 stores with priority given to improving the investment efficiency of Co.opmart stores and Co.op Food stores as well as on developing large-scale outlets to sharpen its competitiveness, congthuong.vn quoted Nguyen Anh Duc, General Director of Saigon Co.op, as saying.

In the short term, Saigon Co.op is working to expand its market share to between 43 % and 45 % from the current 41 %, Duc told the online newspaper.

Another retail giant, Mobile World Investment Joint Stock Company (MWG) which owns the Dien May Xanh and Bach Hoa Xanh retail chains, also opened a number of new Dien May Xanh  stores in January.

By the end of 2021, MWG aimed to raise the number of Dien May Xanh  stores to 1,000 nationwide and reach revenue of VND5 trillion, 10 times higher than 2020’s figure. The firm hopes to have 1,200 Dien May Xanh  stores one year later, with revenue 30 times higher than that of 2020 to VND15 trillion and accounting for 60 % of the electronics retail market share.

Along with Dien May Xanh  outlets, MWG is also striving to have more than 500 newly-opened and upgraded Bach Hoa Xanh stores by the end of 2021. Previously in 2020, it opened 711 new outlets, bringing the number of these stores up to 1,719. The stores last year recorded a combined revenue of VND21.26 trillion in 2020, double that of 2019 and contributing 19.6 % of the total revenue of MWG.

Fiercer competition from foreign rivals

According to Vietcombank Securities (VCBS), the domestic retail market will rebound strongly in the second quarter of this year with a growth rate of 14.5 %.

However, local retailers face fiercer competition from foreign rivals as many foreign retail brands have entered the Vietnamese market in recent years.

Nguyen Anh Duc from Saigon Co.op said his firm would use digital transformation to better adapt to changes in the market and local consumer behaviour. Also, it will enhance connections with localities nationwide and in overseas countries, he said, adding that these connections are hoped to ensure Vietnamese products continued to be the mainstay of the nation’s economy.

Meanwhile, Nguyen Dang Quang, chairman of Masan Group, told congthuong.vn that Masan planned to turn VinCommerce from a pure shopping point of sale into a platform serving essential needs with essential goods and services, accounting for more than 50 % of spending on consumer goods, including fast-moving consumer goods, fresh food, financial services and added value services. This was Masan's goal when it decided to expand into the retail sector.

For MWG, it will still focus on the handsets, electronics and essential consumer foods through a chain of small retail stores– a core strength that has helped the firm grow strongly in recent years.

Trade experts said although the COVID-19 pandemic had negative effects, it also motivated Vietnamese retailers to improve their abilities and be ready to cope with harsher competition as the country has deeply integrated into the global market.