Foreign investors are vigorously expanding in Vietnam, leading to domination by investors from Japan, Thailand, and China.
Aeon and Takashimaya conquering Vietnam
Aeon
Mall from Japan is co-operating with Ha Long Investment and Development
Group (BIM Group) to build its second mall in Hanoi. The
$200-million mall’s area is 9.5 hectares and it is located on BIM
Group’s land in Ha Dong district, Hanoi. This project is expected to be
kicked off in the fourth quarter of 2019, marking the fifth Aeon mall in
Vietnam. At the moment, although Aeon has five
malls which cost almost $600 million in total, the retailer announced
co-operating with and buying out existing supermarkets to reach the
target of 100 supermarkets in Vietnam.
Aeon
holds 30 per cent of Fivimart and 49 per cent of Citimart since 2014.
Since 2008, when Aeon entered Vietnam, the group has continued
expanding. The first business of this group was the co-operation with
Trung Nguyen to open a chain of convenience stores named G7-Ministop.
Aeon’s target is to open 20 malls in Vietnam. There are 16,500 malls and stores owned by this group all over the world.
Meanwhile,
another Japanese investor Takashimaya created a hot shopping trend in
downtown Ho Chi Minh City in mid-2016 when it opened
its first mall, with stores of 58 brands that were appearing in Vietnam
for the first time, 61 brand appearing in Ho Chi Minh City for the
first time, 31 Japanese brands appearing in Saigon Centre Mall for the
first time.
Saigon
Centre Mall was established thanks to the co-operation of Takashimaya
Limited Company, its subsidiary Toshin Urban Development
Company, Keppel Land Group (Singapore), and two state-owned
corporations. The mall’s location is expected to be a crucial
intersection of subways and highways in Ho Chi Minh City. Vietnam was
the third destination of Takashimaya after Singapore and China.
Takashimaya
is one of the oldest malls in Japan. It was established in 1831 in
Kyoto as a second-hand clothing store. Now it owns 17
malls in Japan, and one each in Singapore, Shanghai (China), Taiwan and
Vietnam.
Japanese, Thai, Chinese domination
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There
were a large number of M&A deals in the retail sector, accounting
for almost 30 per cent of the $3 billion total M&A value generated
during the first
half of 2016. The estimated value of M&A deals in Vietnam in 2016
was $6 billion, increasing 15 per cent compared to that of 2015.
|
The
domestic market witnessed the quick penetration of Japanese, Thai, and
Chinese investors. According to the 2016 Global Retail Development
Index of AT. Kearney Company, six out of 20 potential markets were in
Asia. The leading potential markets were China, India, Malaysia, and
Indonesia, while Vietnam was the eleventh.. Moreover, the Vietnamese
retail market became more open after joining the
World Trade Organization (WTO) and numerous other free trade
agreements.
Recently,
Chinese investors began to officially penetrate the Vietnamese market.
For example, Miniso signed a franchise agreement with
Le Bao Minh Group and opened 12 stores in Hanoi and Ho Chi Minh City.
Miniso
is a Chinese-Japanese joint-venture. This company owns only four stores
in Japan but 1,110 stores in China. Its owner, Ye Guofu,
is one of 33 richest Chinese men under the age of 40. The predecessor
of Miniso was the Aiyaya brand, established in 2004.
In
April 2016, Alibaba, the largest Chinese e-commerce company, purchased a
controlling stake in Lazada.vn for $1 billion, in a bid
to quickly penetrate the Southeast Asian markets, including Vietnam.
Market analysts believed that this purchase indicated that Alibaba will
make significant investments into advertising campaigns and export
Chinese goods to Vietnam.
At
the same time, local retailers also show noticeable activities. Mobile
World JSC has opened 1,000 stores and Vingroup intends to
open 70 to 80 Vinmart supermarkets and about 1,500 Vinmart+ stores this
year. In addition, Vingroup has started to develop shopping mall
systems, including Vinmart, VinPro, VinDS, in other provinces to
increase its coverage. Vinmart and Vinmart+ are planned
in at least 30 provinces and cities in 2017. However, Vingroup was
unsuccessful with its Vinpro+ electronics retail chain and had to
integrate the chain into Vincom mall.
However,
analysts think that Vietnamese retailers are unable to compete. Goods
from Thailand, Japan, Korea, and China have conquered
Vietnam.
“Vietnamese
goods have not found a clear direction. This is a predictable result of
a market where competitors have better vision than
local retailers,” Nguyen Phi Van, chairman of Retail & Franchise
Asia Company, said, “Any enterprise with global vision will be better at
market expansion.”Web: www.indochinapost.com
Email: contact@indochinapost.com
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