Tuesday,  Oct 23, 2018,17:09 (GMT+7) 0 0
January-June retail sales exceed US$69 billion
By Hung Le
Saturday,  Jul 14, 2018,17:50 (GMT+7)

January-June retail sales exceed US$69 billion

By Hung Le

Customers are seen inspecting products at a 7-Eleven convenience store in HCMC - PHOTO: HUNG LE

HCMC - Domestic retail sales reached some VND1,597 trillion, or US$69.45 billion, in the first half of 2018, up 11.3% year-on-year, according to the General Statistics Office.

Last month, retail sales picked up 12.9% against the same period one year earlier to reach an estimated VND272 trillion. With such a result, total retail sales of goods in the past six months increased to some VND1,597 trillion, up 11.3% year-on-year.

It can be seen that the domestic retail market is on an upward trend, with stable growth of over 10% over the past few years. In particular, retail revenue in January-June 2017 inched up 10.2% year-on-year. Similar growth rates were recorded in 2015 and 2016.

Retail revenue at the end of last year posted a record amount, with an estimated VND2,937 trillion, equivalent to US$129.56 billion, but rose by only 10.9% against 2016. Therefore, the 11.3% increase in this year’s first half was seen as quite considerable.

According to the GSO, such growth was attributed to the diversity of goods on the market, offering stable prices and good quality, which meet the demands of local consumers and tourists. Of these, foods and foodstuffs were up 12.4%, apparel 12.3%, household appliances 12%, educational and cultural products 9.5%, and transportation 8.8%.

Localities reporting strong growth included Thai Nguyen with 13.1%, HCMC 12.7%, Thanh Hoa 12.5%, Hanoi 12.4%, Binh Dinh 12.4%, Nam Dinh 12.2% and Hai Duong 11.6%.

Having a large population of more than 94 million people, a significant proportion of young people and a busy retail market, Vietnam continues to attract the attention of local and international retailers. Notably, according to local retailers, their advantages include the ability to change young people’s easily developed consumption habits.

Besides the business expansion of existing retailers like Aeon, Lotte, Big C, Auchan, Ministop, FamilyMart, B’s Mart, 7-Eleven and Circle K, some foreign retailers have plans to enter the market.

For instance, China’s Xiaomi and Vietnam’s Digiworld Corporation have joined hands to develop a Mi Store chain in Vietnam to distribute Xiaomi products, such as phones, health bands, power banks, LED lights, vacuum cleaners, electric cookers and water purifiers. Mi Store is expected to open stores in 15 large cities across the country towards the end of 2018.

South Korea’s GS25 has also opened its first convenience stores in HCMC, in partnership with Sonkimland, to become the first South Korean retailer to participate in the competitive convenience store market in Vietnam. The retailer has an ambitious plan, calling for the opening of more than 2,500 stores in the next ten years.

As Vietnam Report Company noted in a 2017-2020 retail report, released last October, Vietnam’s retail sector is forecast to remain stable and attract investments from many foreign firms, thanks to the nation’s large population, its improving economic performance and big spending.

However, competition will become more intense, forcing domestic firms to work out new strategies to retain their market shares and improve their reputations when competing with foreign rivals, which have strengths in capital, technologies, experience and personnel.

According to analysts, foreign firms are well-established and have strategies and long-term visions, whereas Vietnamese firms are flexible, highly adaptive and have a solid understanding of local cultures and consumers’ habits.

According to the Hanoi Supermarket Association, about half of the retail market share is held by foreign firms, though this figure might be higher, in reality. Therefore, operations of domestic retailers might be reduced in the future, due to a lack of experience, limited investments and human resources.

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