Vietnam’ s retail sales leap to US $ 118 billion
The General Statistics Office has estimated Vietnam’ s 2016 retail revenue at US $ 118 billion, a 10.2 % rise over the previous year.
This revenue growth rate was relatively high compared to other markets in the region. Notably, food and foodstuff sales increased by 13 %, followed by household appliances with 11.4 % and textiles and garments with 10.6 %. Sales of educational and cultural products barely grew in 2016, at 1.7 % yearon-year.
Last year continued to see the retail network expand, business models
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diversified, and mergers and acquisitions of retailers increased, especially with foreign involvement. For example, Thailand’ s Central Group acquired Big C supermarket chain from French retail group Casino in Vietnam. It announced its long-term investment and business plans with an aim to double the number of Big C stores from the current 34 in the next five years. In addition, it will upgrade existing Big C stores into commercial complexes.
Upon purchase of wholesale firm Metro Cash & Carry Vietnam, Thailand’ s TCC Holding renamed Metro in Vietnam as MM Mega Market and established a wholesale store chain under the new brand in Thailand.
Other international retail groups such as Japan’ s Aeon, France’ s Auchan and South Korea’ s Lotte were accelerating their expansion to increase market share. The convenience store model developed fast in the country, which is for the most part in the hands of foreign players such as Circle K, Shop & Go, Family Mart and Ministop, with hundreds of stores for each brand.
According to analysts, foreign retailers had better advantages in terms of experience and finance. Foreign retailers outdid domestic rivals by introducing new shopping experiences, along with effective
1ST QUARTER, 2017
services and media, to attract consumers. Therefore, the competition got fiercer, pushing local firms into a difficult position.
For domestic retailers, the market also saw the business network development and retail model diversification, as seen at the chains of Saigon Co-op, Vingroup and Satra, but a number of familiar players such as such as Maximark, Citimart, and FiviMart had to pull out of the market due to mounting competition triggered by foreign retailers.
As reported by the HCMC Union of Business Association, Vietnamese goods used to account for 80-90 % of total volume at most retail channels. However, a survey conducted last year showed foreign commodities assumed the dominant position in some foreign-invested retail systems. Vietnamese producers of quality goods could find it easier to enter local supermarkets, but not foreign-invested ones.
As predicted until 2020, the proportion of modern retail channels will rise by 45 %. The country will have 1,200-1,300 supermarkets and more than 300 large malls, and thousands or even tens of thousands of convenience stores.
Retail in Asia, 01 / 2017
Incheon Airport: Top duty free sales location in 2016
Incheon International Airport( South Korea) posted KRW2,300billion( US $ 2 billion) in duty free sales in 2016, the airport company has reported. The figure is a leap of + 14.7 % year-on-year. It means that Incheon reclaims the crown as the world’ s leading duty free sales location, ahead of Dubai International. The airport previously hit US $ 2 billion in sales in 2014.
Incheon International Airport Corporation said that sales had recovered from 2015 when they were affected by“ negative impacts due to MERS and a duty free renovation period”.
Cosmetics & fragrances continued to be the best-selling category with US $ 770 million in sales, accounting for 39 % of the business.
Liquor & tobacco followed with US $ 440 million and leathergoods was next with sales of US $ 280 million.
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IIAC said in a statement today:“ There were general concerns in 2016 due to volatile market environments in East Asia derived from geopolitical issues and excessive competitive market in Korea from [ the increasing number of downtown duty free shops.
“ Confronting these challenges, however, Incheon Airport Duty Free led an increase in sales by enhancing the shopping environment through renovation, offering customer-friendly promotions with [ new ] experiences, and providing diverse global and local brands, not to mention increasing passenger traffic. Also, partnerships with seven duty free operators including four SMEs( Small and Medium Enterprises) contributed to the success.”
The airport company hailed the“ qualitative and quantitative growth” in the business, noting that Incheon Airport Duty Free was last year acknowledged with global awards from Business Traveller US and Asia Pacific for the sixth year in a row, Business Traveller China for the fourth consecutive year, plus a Frontier Award. Looking ahead,
IIAC President & CEO Il-Young Chung said:“ Incheon Airport is expecting to open T2 duty free shops in 2017. Along with T1 duty free, we will do our best to satisfy passengers visiting Incheon Airport and lead the global travel retail business with an unprecedented, fascinating and enthralling airport shopping environment.”
Retail in Asia, 01 / 2017