Marks & Spencer to Join Vietnam Retail Market Competition
HCMC – British retailer Marks & Spencer (M&S) has announced plans to enter Vietnam’s retail market this summer with the opening of a flagship store in Ho Chi Minh City (HCMC). In the long-term, the company plans to open at least 20 stores in Vietnam by 2020.
The new store will offer a variety of products such as women and men’s clothing, accessories, footwear and sleepwear.
The store will cover an area of 1,200 square meters and be located in Vincom Center, which is situated in Dong Khoi, District 1, HCMC. The Central Group of Thailand, M&S’s long-term franchise partner, will operate the store.
Bruce Findlay, regional director for Asia at M&S, in a statement to the media, explained the thinking behind the move: “growing our business with leading franchise partners like Central Group is an important part of our international growth strategy. With access to prime locations at key shopping malls across Vietnam and unrivaled local knowledge, Central Group is the ideal partner for us to open our new stores across the country”.
Vietnam is a relatively large market of around 90 million people – the majority of which is made up of young consumers whose purchasing power is increasing as the economy continues to grow. The country’s retail market is expected to grow by 20 percent per year for the next few years. Thus, Vietnam is an exciting market with high growth potential and is an increasingly attractive destination for those investing into the retail sector.
Tos Chirativat, CEO of Central Group, pointed to the further positive trend that “the influx of foreign investors into Vietnam, aimed at supporting market expansion in Southeast Asia, is driving strong growth in Vietnam’s economy, leading to a positive spending pattern among target consumers over the past couple of years.”
M&S is not the only retailer to recently announce plans to enter Vietnam’s retail sector. French Groupe Auchan is also beginning its expansion into Vietnam.
ISMS, which is Auchan’s supermarket division, will collaborate with the CT Group in order to develop a supermarket business under the S-Mart name in Vietnam. The CT Group is based in Ho Chi Minh City and specializes in commercial real estate projects.
Although there is much room for growth in Vietnam’s retail market, M&S and Auchan will face stiff competition from earlier market entrants – these include Giant, Metro, and Lotte Mart. It remains to be seen who can become the dominant player in this expanding market, but it is clear that the Vietnamese consumer will be the ultimate winner.
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