Japan’s Sumitomo to open first supermarket in VN
11:23 | 14/12/2018

VGP - Sumitomo Corp. will open its first Vietnamese supermarket in Ha Noi by the end of this year, using its modern Japanese-style retail expertise to draw increasingly well-off middle-class consumers in a country still dominated by traditional markets.

Sumitomo buying share of Simple Mart

Sumitomo has invested millions of US$ in this joint-venture and would have the rights to choose its president, while BRG would control the company. 

The new supermarkets will make use of Summit’s point-of-sale system as well as a loyalty program to stock products efficiently according to customers’ shopping tendencies.

CEO of Nielsen Viet Nam Vaughan Ryan said that the country has a total of 600,000 retail points of sale, in which the modern retail channel is 1,200 points, accounting for 25% of the market share. The rate is projected to increase to 45% by 2020.

Under this context, Viet Nam’s retail market remains open for both local and foreign companies, said Ryan.

Viet Nam has seen a notable growth in its middle class in recent years as its population closes in on 100 million and, with real GDP climbing at a high rate, the domestic consumer market is forecast to expand rapidly. 

Viet Nam’s traditional retail market remains centered on sales by small independent shops, but modern retail markets such as supermarkets and convenience stores have been gaining share in large city areas such as Ha Noi, Ho Chi Minh City, and Da Nang.

The future is expected to see living standards improve as the middle class grows and as food safety/security awareness drives further expansion by modern retail markets.

In 2016, BRG and Sumitomo signed a cooperation agreement to develop smart city, high-tech agriculture, retail and other sectors. 

The liberalization of the retail market has made Viet Nam more attractive in the eyes of investors, according to the Economist Intelligence Unit (EIU). Just like India, the growth rate of Viet Nam’s market is expected to exceed that of others, particularly e-commerce. 

Currently, there is approximately one convenience store per 69,000 Vietnamese citizens, compared to one per 21,000 in China and one per 1,800 in the Republic of Korea as of the end of 2016.

There remains room for the market to growth and a rapid change in market behavior of the Vietnamese customers could make the modern retail model a promising land. 

In the FAST500 ranking recently released, the Vietnamese market witnessed a strong rise of the retail sector, reaching an annual growth rate of 63.7% in the 2013 – 2016 period. In 2017, the sale revenue from the retail sector in Viet Nam stood at US$129 billion, up 11% year-on-year. 

Fujimart Viet Nam Retail, a joint venture between the Japanese trading house and local retail and real estate conglomerate BRG Group, will launch one store in Ha Noi by year-end. Two more are expected to open there in 2019.

                                                                                                                                         By Vien Nhu

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