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2017 retail sales near US$130 billion
Hung Le
Thursday,  Jan 4, 2018,23:23 (GMT+7)

2017 retail sales near US$130 billion

Hung Le

The presence of 7-Eleven on the Vietnamese market has put more pressure on domestic retailers - PHOTO: HUNG LE

HCMC – Retail sales last year amounted to an estimated VND2,937,300 billion, or US$129.56 billion, up 10.9% against 2016, according to the General Statistics Office (GSO).

This was a high result compared to previous years such as 2016 with US$118 billion (up 10.2%) and 2015 with nearly US$110 billion. This is an indication that the domestic retail market is growing well and becoming a target for foreign retailers.

Retail revenue from autos grew by 14%, gemstone and precious metals by 13.2%, wood and building materials by 12.8%, food and foodstuffs by 11.1%, cultural and educational products by 10.2%, apparel by 9.6%, transportation by 8.6%, and home products by 8.5%.

Cities and provinces with high retail revenue growth include Thanh Hoa with 13.7%, Tien Giang with 13.3%, Ha Giang with 12.8%, Haiphong with 12.5%, Hanoi with 11.4%, and HCMC with 10.1%.

As in previous years, last year saw foreign retailers expanding their presence in the local market.

For instance, 7-Eleven, the world’s leading convenience store chain, entered the market while Circle K, B’s mart, FamilyMart and Ministop have had hundreds of stores each.

Thailand’s Central Group last July opened the first stationery and office supplies store in Vietnam. Other foreign retailers like Big C, AEON, Auchan and Lotte have also planned to increase their market share.

According to a 2017 report of consulting firm A.T. Kearney, Vietnam’s ranking in the Global Retail Development Index inched up five places to sixth, behind India, China, Malaysia, Turkey and UAE. The ranking of Vietnam is higher than those countries with strong retail markets such as Indonesia (8th), Saudi Arabia (11th), Kazakhstan (16th), the Philippines (18th), and Thailand (30th).

The improving ranking of Vietnam shows the attractiveness of the retail market to foreign investors after failing to make it to the top 30 markets for retail investment in 2012. Vietnam used to top the list in 2008, and came sixth in 2009, 14th in 2010 and 23rd in 2011.

According to a report released by Vietnam Report last October, Vietnam’s retail industry is forecast to be stable and appealing to foreign investors thanks to a big population, high economic growth and strong consumer demand.

However, competition will be fiercer. Domestic firms will have to work hard to retain their market share, and compete with foreign rivals who have advantages in terms of finances, technology, experience and human resources.

The retail market of Vietnam still has room for more growth as modern retail channels like supermarkets and shopping centers account for only 25% of total retail sales, and a majority of supermarkets and shopping centers are in big cities.

By 2020, the proportion of modern retail channels is forecast to rise to 45%. The country will have 1,200-1,300 supermarkets, more than 300 shopping centers, and dozens of thousands of convenience stores by then.

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