Japan and South Korea battle for Vietnamese retail market
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South Korean companies are engaged in a fierce battle with Japanese rivals in the Vietnam retail market, which has emerged as a “post-China.”
According to the Korea Trade-Investment Promotion Agency, the Vietnam retail market has been growing rapidly, with an annual average growth rate of 10.9 percent between 2013 and 2018.
Currently, South Korea and Japan lead the market in all areas, including convenience stores, department stores and online shopping.
Lotte Group has had a presence in the Vietnam retail market since 2008 and has invested US$390 million so far.
Currently, the company has 14 shopping malls, one department store, and two duty-free shops operating across the country.
Japanese rival Aeon entered Vietnam in 2011 with a capital of $190 million. Since then, it has built and operated shopping malls in three centers: Ho Chi Minh City, Hanoi and Binh Dương.
Besides Aeon, Japanese companies such as 7-Eleven, Fuji Mart are also operating in Vietnam.
The channels that are growing rapidly in the local market are convenience stores and e-commerce.
In particular, the growth of the convenience-store market is steep due to rapid urbanization, rising income levels and the expansion of the young consumer population.
IGD Research ranked Vietnam as the top country among the fastest-growing convenience store markets in Asia by 2021.
The South Korean convenience store chain GS25 entered Vietnam in January last year when it opened a store in Ho Chi Minh through a joint venture with SonKim Group, a Korean company that has emerged in the region.
It currently operates about 50 stores but plans to expand to 70 by next year and to 2000 over the next decade.
South Korea’s BGF Retail, which operates the convenience store chain CU, also recently signed a master franchise contract with Vietnam’s CUVN to start making inroads into the Vietnamese market.
Japan’s 7-Eleven entered Vietnam in 2017 and is currently operating 24 stores. It aims to build 1000 new stores, mostly focused for now on Ho Chi Minh City and Hanoi. It followed Circle K and FamilyMart which have gained considerable traction in Ho Chi Minh City.
South Korean conglomerates such as Lo
Questions & Answers
Q.Which specific retail sectors are seeing the fastest growth within Vietnam's market?
Which specific retail sectors are seeing the fastest growth within Vietnam's market?
The channels experiencing rapid growth in the local Vietnamese market are convenience stores and e-commerce. Convenience stores, in particular, are growing quickly due to urbanisation, rising incomes, and a growing young consumer population.
Q.How much has Lotte Group invested in the Vietnamese retail market and what is their current presence?
How much has Lotte Group invested in the Vietnamese retail market and what is their current presence?
Lotte Group has invested US$390 million since 2008 in the Vietnamese retail market. They currently operate 14 shopping malls, one department store, and two duty-free shops across the country.
Q.What are the expansion plans for the South Korean convenience store chain GS25 in Vietnam?
What are the expansion plans for the South Korean convenience store chain GS25 in Vietnam?
GS25 plans to increase its current store count of approximately 50 to 70 by next year. Over the next decade, the company aims to expand its operations to 2000 stores across Vietnam.
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