Vietnam Attracts Greater Foreign Investment into Retail Sector

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Sept. 4 – A number of Asian firms have begun to eye Vietnam as a potential “Blue Ocean” market thanks to the country’s emerging retail sector and the annual growth rate of its consumer goods trade (which hovers around 23 percent).

Vietnam’s growth is much higher in comparison to the growth rates throughout the rest of the Asia-Pacific region, which currently top out at around 12-15 percent.

Vietnam, a relatively large market of around 90 million people – the majority of which is made up of young consumers – currently has no major players in the retail sector. The largest retail chain in the country is called Shop & Go, which only has a total of 70 stores throughout the entire country.

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Further, according to the Nielson Grocery Report for Vietnam, beverages and liquor posted the highest sales growth with “a year on year increase of about 28 percent as of last year, followed by 21 percent for milk-based products, 19 percent for foods stuffs, 18 percent each for personal-care and cigarette products and 15 percent for household products.”

As a result, a number of foreign firms have started to move more aggressively into Vietnam. For instance, leading Thai trading firm Berli Jucker Plc. recently bought a 65 percent stake in Vietnamese convenience store company B’s Mart, which currently has 41 stores throughout Ho Chi Minh City (HCMC).

Phidsanu Pongwatana, senior vice president of Berli Jucker’s retail business group, confirms Vietnam as a market with potential for strong retail growth, and has plans to expand Berli Jucker to over 300 stores throughout the country by 2015.

In addition, Thai-based Central Pattana, a leading shopping mall developer, and Japanese retail firm Aeon have begun their entry into Vietnam with plans to build their national headquarters in HCMC in addition to plans to develop a number of shopping malls, convenience stores and supermarkets throughout the rest of the country.

Other foreign brands currently operating and expanding in Vietnam include Metro Cash & Carry from Germany, Big C from France, Lotte Mart from Korea, Daiso from Japan and Circle K from the U.S.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

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