Ms. Mona Do: +82-2-6000-8004
29 October, 2020
The number of mini-supermarkets increased sharply in the first 6 months of 2020, especially in the second and third sectors. The potential for convenience store expansion in Vietnam remains huge, as modern retail channels account for about 25. % of retail sales, convenience stores less than 10% of the market, according to Vietnam Report.
“Retail is one of the sectors most affected by COVID-19 in both positive and negative aspects” , a recent report of Vietnam Report stated.
In the second quarter of 2020, the number of businesses temporarily suspending operations in the retail industry increased by 21% compared to the same period in 2019. Although direct shopping revenue decreased, the Vietnamese retail industry still recorded signs actively from e-commerce, online shopping and delivery service.
Vietnam Report said that after the pandemic, the retail industry will move according to 5 main trends.
The results of consumer behavior survey by Vietnam Report show that in the context of people having to limit travel and gather in crowded places to prevent epidemics, consumers have switched shopping channels on both product groups. essential and non-essential products.
Retailers in Vietnam have quickly grasped consumer behavior, deeply exploited online channels, sales applications, took advantage of delivery channels and promoted multi-channel integration. Thanks to the timely transformation, many retailers such as Lotte Mart have helped to increase their sales through online channels from 100% to 200%, especially in Hanoi and Ho Chi Minh markets. Accordingly, 66.7% of enterprises in the survey of Vietnam Report said that the COVID-19 epidemic created a push to make the retail sector in Vietnam transforming more strongly, and this is also a long-term impact. long-term epidemic with the retail industry.
In 2019, the Vietnamese retail market witnessed a record number of mergers and acquisitions (M&A), capital flows led by domestic enterprises, with outstanding deals such as Saigon Co-op. 18 Auchan and Vingroup supermarkets have transferred the entire retail segment at Vincommerce to Masan Group. This shows that domestic retail businesses have made a breakthrough, become more mature and able to compete with foreign businesses.
The EVFTA Agreement creates a challenge for the domestic retail industry, according to the Ministry of Industry and Trade, more than 60% of businesses operating in the retail sector are small and medium enterprises, with management capacity. and weak competitiveness, high capital demand and many businesses willing to link with partners in the same industry to access investment capital, advanced management technology from EU countries.
Foreign enterprises with financial, system and market experience advantages are easy to gain market share through M&A deals, but not all businesses are successful in the Vietnamese market, typically in the market. Auchan Retail Group withdrew from the Vietnamese market in 2019 due to limitations in understanding consumer culture, access to sources of goods, branch network, etc. M&A activities help both parties participate. They are all beneficial, in which foreign businesses will quickly own market share, retail supply chains and existing customers of domestic firms. This promises M & A in the retail sector will continue to boom in the coming time.
Touchless technology has become an important part of marketing, making cashless payments using QR codes, or integrating with virtual reality technology services that allow consumers to try products at home. Especially, under the impact of the COVID-19 epidemic, the attention has been paid to non-touch technology.
Although the cash will never be completely lost, it will gradually decrease in popularity as customers seek more convenient and flexible buying options. The recent consumer behavior survey results of Vietnam Report show that 60.6% of respondents choose to use cash in payment to decrease, 59.6% increase in forms of payment via Internet Banking and 57.7% of people increase payment via e-wallets. Retailers need to proactively approach consumer demand for application-based payment methods to increase the shopping experience for customers and match the cashless payment trend in the context. Industrial Revolution 4.0.
Big data analytics is increasingly playing a core role in researching customer preferences and behaviors to create the best consumer experiences. The survey results of Vietnam Report on consumer behavior before buying a product showed that 56.9% of respondents did research by themselves; 20.6% listen to counseling from relatives and friends; 13.7% from messages and promotions, online advertising interaction, and 5.9% from listening to someone recommend on social media.
In what categories and channels should the strategists consider consumers spending their money? What competitive advantages have changed and which sectors have succeeded? By identifying growth opportunities in the new normal, which areas can be accelerated, the database system helps retailers redesign the shopping experience for consumers, Suitable for non-cash payments.
According to experts in the survey of Vietnam Report, mini supermarkets are the development trend of the modern retail industry in Vietnam in the context that the retail market is under competition from e-commerce. Traditional shopping centers are also facing many difficulties.
The recent consumer survey results of Vietnam Report show that 48% of respondents choose a store or supermarket because of its convenient location, and mini supermarkets that meet this demand for buyers. cost optimization with about 50-200m 2 , is administered from 2 to 3 employees. In the context of the COVID-19 pandemic, the mini-supermarket model shows the advantages of limiting crowding like large supermarkets, and consumers gradually reduce their shopping habits at traditional markets and choose to go to shops convenience goods, mini supermarkets have increased.
The number of mini-supermarkets increased sharply in the first 6 months of 2020, especially in the second and third-tier areas, but the potential to expand convenience stores in Vietnam remains huge, with modern retail channels accounting for about 25 % of total retail sales, convenience stores less than 10% of the market. The mini supermarket models continue to be the trend of the market and retailers need to grasp to continue to innovate the form of stores, creating a suitable experience for customers along with the online channel of the business.
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