Singapore, Japan, Korea, Thailand rush to pour money

According to Reuters , Singapore's sovereign wealth fund GIC and several Thai investors want to buy 20% of shares in Vietnam's third largest retail chain - Bach Hoa Xanh chain with a valuation of about 1.5-1.7 billion USD.

The deal is nearing its final stages and is expected to close soon, possibly in the first quarter of 2024.

Bach Hoa Xanh was established in 2015 and is a member of the retail giant Mobile World (MWG) chaired by Mr. Nguyen Duc Tai.

Foreign corporations have recently been rushing to expand their retail networks in Vietnam.

On September 22, Mr. Shin Dong-bin, Chairman of Lotte Group Korea, and his eldest son Shin Yoo-yeol - CEO of Lotte Chemical - visited Vietnam to inaugurate the 643 million USD Lotte Mall West Lake. This is a complex of shopping mall, hotel, office and tourist apartments, 23 floors high on an area of ​​7.3 hectares. The total retail area is 82,550 square meters.

Here, many famous global brands appear, including: Marks & Spencer, Uniqlo, Zara, Massimo Dutti, Pull & Bear, Fred Perry, Lagerfeld, Maison Margiela, Foot Locker, Rockport, Camper, Marimekk...

In the first half of 2023, Thai billionaire Chirathivat's Central Retail consecutively opened GO! Shopping Centers and Hypermarkets in Ha Nam and Dong Nai, and launched its own furniture brand Home Come.

At the beginning of the year, the Thai retail giant announced an investment worth 1.45 billion USD over the next 5 years in Vietnam.

By mid-2023, Central Retail will own 38 Go! hypermarkets in Vietnam and 39 stores under the brands Tops market, Go! and LanChi Mart, along with 52 Nguyen Kim stores selling home appliances and a large number of food stores.

According to the plan, by 2027, Central Retail will become the number one multi-channel retailer in the food industry and number two in the real estate - shopping mall sector in Vietnam.

Vietnam's retail industry is forecast to be worth up to 350 billion USD by 2025.

Also in the first half of 2023, Japan's Uniqlo opened four more stores in Vietnam. Japanese retailer Muji also opened additional stores in Ho Chi Minh City and Hanoi.

Japan's AEON has also just opened AEON Binh Duong New City supermarket in Binh Duong New City. According to the plan, AEON plans to open 2-3 new supermarkets of 5,000m2 in Vietnam this year.

Not only foreign giants are pouring money into the retail sector, domestic corporations are also expanding their sales networks across the country.

Billionaire Nguyen Dang Quang's WinCommerce opened more than 150 Winmart+ stores and 2 Winmart supermarkets in the first 6 months of 2023, bringing the total number of points of sale to more than 3,500 locations nationwide for both supermarkets and mini-supermarkets. This is the largest modern retail chain in terms of the number of points of sale.

Bach Hoa Xanh now owns more than 1,700 stores with revenue in the first half of this year increasing by 7% to VND13,670 billion but still having an accumulated loss of VND8,000 billion.

Vietnam's retail industry is attractive, competition is increasingly fierce

Vietnam's retail market is considered one of the most potential markets in Southeast Asia with a current size of about 140 billion USD and forecast to reach 350 billion USD by 2025.

However, the scale of modern retail channels is still very modest, accounting for only about 25% of the total market size, much lower than Singapore's 80% or Thailand's 48%... Vietnam's population is large and its economy is open to most major partners in the world.

This may be the reason why domestic and foreign capital is still pouring in.

Recently, although the economy has faced many inflationary pressures and people's spending has decreased, the retail market has still grown quite well.

According to the General Statistics Office, total retail sales of goods and consumer services revenue in the first 9 months of 2023 increased by 9.7% over the same period last year to nearly 4.57 million billion VND. Retail sales of goods in the first 9 months of 2023 alone are estimated at 3,572 trillion VND, up 8.4% over the same period last year.

In the first half of the year, Bach Hoa Xanh (MWG) and Wincommerce (Masan) recorded positive revenue growth. WinCommerce achieved revenue of more than VND14,500 billion in the first two quarters of the year. Meanwhile, foreign giant Central Retail earned more than VND17,000 billion.

The recovery of Vietnam's retail industry after the Covid-19 pandemic is based on the growth of average income as well as disposable income of the people. In addition, there is also the shift in shopping habits along with revenue from the return of international visitors to Vietnam and domestic tourists.

Vietnam's retail market is attractive not only for its large population size but also for its prospects of increasing incomes following positive economic signals in the medium and long term.

Many experts believe that Vietnam's economy is facing a decade-long period of strong growth.

Even at the present time, although the economy is still facing difficulties after the Covid-19 pandemic, the impact of the Russia-Ukraine conflict and the weakening of many major economies, including the US, China, Europe... Vietnam still recorded positive growth (Q3 reached 5.33%) and is the world's leading country.

According to investment consultancy FIDT, the macro signals are currently quite positive. Prospects for new FDI are high; import-export surplus is at a record high.

According to Mr. Vicente Nguyen - Chief Investment Officer (CIO) of AFC Vietnam Fund, Vietnam's medium and long-term economic prospects are very good. President Joe Biden's visit to Vietnam and the decision to upgrade the bilateral relationship to a comprehensive strategy could be a great stepping stone for Vietnam's economy in the next 10 years after capital flows from the US to Vietnam and imports and exports increased rapidly in the past 10 years.

Economic growth, resulting in increased incomes and a boom in tourism, will boost Vietnam's retail market. Vietnam's GDP per capita in 2022 reached 4,110 USD and is expected to reach 4,700-5,000 USD by 2025.

However, competition in this field is increasingly fierce with the war between domestic retail giants in the second and third quarters. Many giants continuously activated low-price programs, expanding the war to many areas: phones, laptops, electronics, household goods... causing profits to decline.

Vietnamnet.vn