Vietnamese automaker acquires South Korean retail chain
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A THACO spokesperson said that the agreement will be signed this week. South Korean retail giant E-mart, owned by the Shinsegae Group, will stop operating its outlets in the country. Under the buyout deal, THACO will operate the chain as a franchisee and pay a royalty to E-mart.
The South Korean established the E-mart Vietnam Co. in 2014 after three years of doing market research in the country.
It opened its first megamarket in HCMC’s Go Vap District at the end of 2015, covering an area of 12,000 square meters. The megamarket consists of a shopping area, restaurants and a kids’ playground.
It hiked its charter capital by 62.5 percent to VND2.7 trillion ($117.8 million) in 2018.
The E-mart Vietnam management board said 95 percent of products it sold were domestically produced.
Rumors had surfaced at the end of last year that E-mart will exit the Vietnam retail market, but the company denied them.
South Korean newspaper The Korea Times cited the retail giant as saying it was selling its Vietnam operations due to difficulties in expanding the business. It had planned to open a second megamarket in HCMC’s Tan Phu District in mid-2018, but the plan was not realized.
THACO has announced plans to open 10 supermarkets in Vietnam by 2025.
Questions & Answers
Q.Will THACO continue to operate the acquired retail outlets under the E-mart brand name?
Will THACO continue to operate the acquired retail outlets under the E-mart brand name?
Yes, THACO will operate the chain as a franchisee. This means they will use the E-mart brand and business model while paying a royalty to the South Korean owner.
Q.What reason did E-mart give for selling its operations in Vietnam?
What reason did E-mart give for selling its operations in Vietnam?
The retail giant stated it was selling its Vietnam operations because of difficulties in expanding the business. A planned second megamarket in HCMC's Tan Phu District was never realised.
Q.How long had E-mart been operating in Vietnam before THACO acquired its retail chain?
How long had E-mart been operating in Vietnam before THACO acquired its retail chain?
E-mart established its Vietnam company in 2014 and opened its first megamarket at the end of 2015. This means it operated for approximately six years before the acquisition agreement.
Q.What are THACO's future plans for expanding its retail presence in Vietnam?
What are THACO's future plans for expanding its retail presence in Vietnam?
THACO has announced plans to open 10 supermarkets across Vietnam by the year 2025. This indicates a significant expansion of their retail footprint in the country.
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