Vietnam is considered one of the five most lucrative retail markets in the world, and the sector provides good opportunities for Danish products. The Embassy in Hanoi has visited two of the major players.
Saigon Co-Op (SGC)
Founded in 1989 as a cooperative, SGC has now established a retail chain of 44 supermarkets, named Saigon Co.opmart with 20 in Ho Chi Minh City and 24 in other big cities all over the country such as Hanoi, Danang, Hue, Can Tho and Phan Thiet. The company plans to increase the number of its supermarkets to 100 within the next 5 years. SGC is currently the biggest retailer in Vietnam with a market share of over 50% in the modern retail sector.
Modern trade accounts for app. 25 % of the retail turnover. SGC has also accomplished a growth rate of 35% per year with revenue of around 460 million USD in 2009. A wide variety of high quality fresh food products, hi-tech products, furniture, design products and fashionable clothes at reasonable prices together with a good customer service, are counted as SGC’s strengths to make it a “Reliable shopping place, friend of every household”.
From 2004 to 2009, SGC has every year been elected as the top retailer in Vietnam, as well as one of the top 500 retailers in the Asia Pacific region. According to Mrs. Nguyen Thi Hanh, the company’s chief executive officer, imported goods accounts for 10% of SGC’s turnover. Only 10-20% of the imported items are imported by SGC directly, while the bulk is bought from local distributors.
This number is expected to reach 15 in the next 5 years. Big C is an ideal shopping place for Vietnamese consumers and its popularity is increasing: each hypermarket sells over 50,000 products ranging from fresh food products, consumer goods, and clothes to furniture and electronic goods, all at competitive prices. 5% of Big C’s goods are imported, and of its 300 million USD revenue in 2009, 70% came from food products.
Big C’s share in Vietnam’s modern retail market is about 13 – 15% and growing fast. Big C has very little competition in Vietnam, and shopping conditions are first class. Big C is always on the lookout for competitive products and is at the moment in particular interested in fresh salmon products. Big C does not handle imports themselves but deal with local distributors. The only Danish products found in Big C at the moment are beer and a bit of cheese.
Modern trade is growing fast and the traditional “mom and dad” shops and wet markets are quickly losing market share in the cities. Vietnam is considered one of the five most lucrative retail markets in the world, and other international chains are considering establishing in Vietnam, as the investment regulations within the retail sector are gradually being liberalized.