Why are many Thai buyers in the Vietnam retail market?

Berli Jucker Plc (BJC), has taken over the Japanese chain of 42 FamilyMarts and renamed it as B’mart. The Vietnamese retail market recently witnessed a series of mergers and acquisitions (M&A) in which the buyers were businessmen from Thailand.

In mid-2014, BJC made a deal on buying Metro Cash & Carry Vietnam at $880 million, the biggest affair in the retail sector in Vietnam so far. The deal wrapped up 1.5 years later, in January 2016.

In early 2015, Central Group successfully acquired a 49 percent stake of the Nguyen Kim home appliance distribution chain.

Right after French Casino Group announced the plan to sell Big C Vietnam, analysts predicted that Big C chain in Vietnam was likely to fall into Thai hands. Later, BJC stated it was vying for Big C Vietnam.

This is because, according to Phu, the Vietnamese market promises great potential: while other countries in the world focus on developing the home market, Vietnam has been gathering strength on boosting export, while paying less attention to the domestic market.Vu Vinh Phu, chair of the Hanoi Supermarket Association, who was deputy director of the Hanoi Trade Department, noted that only a few foreign retailers came to Vietnam in the past, but things are quite different now. Nearly all big retailers in the world are present in Vietnam, especially Thais.

This explains why foreign investors have to spend several months only to find retail premises and penetrate the home market. Meanwhile, a domestic retailer told Phu that it took him three years to do this.

“Business opportunities will be missed after such a long time,” Phu said, adding that domestic and foreign retailers are in an unequal competition.

An analyst commented that many Thai businessmen eye Vietnam because Thailand is near Vietnam in geographical position. Thai businesspeople understand Vietnamese consumers’ taste and hobbies.

“Thai businessmen kicked off plans to penetrate the Vietnamese market a long time ago. And they have been doing this in a methodical way and they have been step by step expanding both production and distribution in Vietnam,” he commented.

At first, Thai businesses usually organize trade fairs in Vietnam to familiarize Vietnamese with Thai products.

“I believe that 100 percent of families in Hanoi and HCMC use Thai products, from washing liquid to knives,” he said, adding that Thai products are present in every Vietnamese family.

Phu commented that though Thai is less strong than Japanese and South Korean; therefore, they have been ‘waging guerilla warfare’ when attacking the Vietnamese market.