Vu Vinh Phu, chair of the Hanoi Supermarket Association, and former deputy director of the Hanoi Trade Department, emphasizes that “The domestic retailers will be easy to be broken like a bunch of chopsticks by foreign supermarkets unless they stands together for a better future!”

Foreign retailers are making inroads into Vietnam’s fast-growing market.

A number of foreign sizable retailers have entered Vietnam and deepened their penetration with fast expansion to tap the rising middle-income class and consumerism in the country, heating up competition with large existing players such as Metro and Big C.

Seven years after entering Vietnam, South Korean conglomerate Lotte Mart has expanded its footprint in the Southeast Asian country by opening the first outlet in Hanoi at Mipec Mall, formerly Pico Mall, in early 2014.

Lotte Mart’s second supermarket in Hanoi came online at Lotte Tower, the second-highest building in the city, which was inaugurate in September 2014, expanding its network to eight in Vietnam.

The South Korean major aims to have up to 60 commercial centers in Vietnam by 2020 with an investment of $30 million to $40 million for each outlet.

For its part, Japan’s supermarket giant Aeon has shown its ambition to boost its coverage in Vietnam, taking advantage of the Vietnamese’s favor for Japanese consumer goods.

Its presence in Vietnam’s retail market has been strengthened with the opening of AeonMall Long Bien in Hanoi in November 2015, besides two already in place in Ho Chi Minh City and the adjacent province of Binh Duong.

Yukio Konishi, chairman cum CEO of AeonMall Vietnam, told local media that the firm planned to open up to 20 facilities of that kind in the Southeast Asian country, which has a population of over 91.7 million people as of end-2015.

During 2015, the Japanese retailer acquired a 30% stake in Fivimart and another 49% stake in Citimart, two Vietnamese supermarket chains, mostly located in in northern Vietnam.

Competition in the Vietnamese retail market is poised to heat up with overseas newcomers and mergers and acquisitions by foreign players.

French retailer Auchan in November 2015 signed a deal with Vietnam’s Military Petrochemical JSC to lease the MIPEC Long Bien Shopping Mall, part of its plan to expand the Simply Mart chain to northern Vietnam with 20 outlets on the cards in the region by 2020.

In the southern region, the firm has partnered with local C.T Group to develop the S-Mart chain and is preparing to expand its Simply Mart network in 2016.

With these steps, the French retailer could pour some $500 million into Vietnam as it had announced earlier, according to the Dau Tu (Investment) newspaper.

Meanwhile, Seven Eleven Inc., a subsidiary of the Japanese retail conglomerate Seven & I Holdings, in July signed a contract with IFB Vietnam, the owner of the Pizza Hut restaurant chain in Vietnam, to open its first store in Ho Chi Minh City. The number of establishments is set to reach 100 after three years and 1,000 after 10 years.

After taking control of Phu Thai Group, the owner of the Family Mart retail chain in 2013, Thailand’s Berli Jucker Public Company Limited (BJC) has made inroads into Vietnam by closing a deal to wholly acquire the Metro wholesale supermarket chain from Metro Cash & Carry for EUR655 million ($879 million).

Vingroup, Vietnam’s top private-run real estate developer, has been striving to capitalize on the country’s blooming retail market. The firm last year acquired Maximark chain after buying majority stakes of Vinatex Mart and Ocean Mart.

Vingroup is taking the lead in expanding shares in the home market with 125 convenience stores and 12 shopping centers as of October 2015. The group intends to put 40 malls into operation in 2016 and 100 in 2020.

Another big name in the domestic playing field is Saigon Co.op Mart, which plans to add six to eight outlets to its network in 2016, which comprises nearly 80 supermarkets currently.

On the contrary, a number of domestic retailers have had to sell stakes to foreign players or cease operations due to tough competition.

Power Buy, a leading Thai electronics store operator, last year completed a deal to buy a 49% stake in the NKT New Solution and Technology Development Investment JSC, which is the owner of Nguyen Kim Trading JSC.

Hiway Vietnam has announced to stop the operation of SapoMart retail chain after three years. The reason for this move is not disclosed.

A CBRE report on retail market in the Asia-Pacific region in 2014 showed that one third of surveyed firms responded that they were targeting Vietnam to open new retail facilities. This rate was the same as that for Hong Kong and Singapore, and higher than that for Indonesia and Malaysia.

Vietnam is among the retail markets with the largest potential, thanks to its young demographics, and improved purchasing power from the rising middle-income class, according to the report.

The 9.1% growth of Vietnam’s retail market in 2014 is among the highest rates in the world and the formation of new retail models ensures the sustainability, Forbes Vietnam magazine cited Troy Griffiths, deputy managing director of Savills Vietnam, as saying.

This perspective encourages real estate firms to develop new projects, he added.

Vietnam’s retail sales increased 10.6% year-on-year to 2,469 trillion dong ($109.7 billion) in 2015 while local and international market forecasts earlier suggested retail sales could only reach $109 billion in 2017.

According to Vietnam’s Ministry of Industry and Trade, retail sales at modern facilities such as trade centers, shopping malls, and convenience stores just account for 25% of the total while traditional channels such as wet markets and household shops take the lion’s share.

At the end of 2014, there were over 700 supermarkets and nearly 150 trade centers in Vietnam, which are modest for a market of over 90 million people.