InsideRetail.asia notes five trends now defining the retail landscape.
Vietnam’s retail market is set to grow by 8.4 per cent by 2020, making it one of the fastest-growing markets in Southeast Asia, according to InsideRetail.asia, Asia’s leading authority on retail industry news and trends.
InsideRetail.asia took a look at five trends defining the marketplace for pan-Asian retailers right now.
January 2015 marked the first time non-domestic retailers could take full ownership of commercial property in Vietnam, following commitments made to the WTO. New trade agreements with Japan, South Korea and countries that make up ASEAN are set to support further growth for international retailers in Vietnam, such as AEON, emart and BJC Metro.
Tailoring the best of international retail
Domestic retailers may have the advantage when it comes to local shopper knowledge but international retailers are drawing on their own strengths to help them compete, InsideRetail.asia reported.
Dairy Farm, FamilyMart and Aeon have brought their expertise in loyalty schemes, private labeling and innovative marketing to their stores in the region.
Other points of difference include appealing to busy office workers with fast food counters (as seen at Family Mart and B Mart) and bringing an international flavor to in-store hot food offerings (as seen at Aeon Mall).
Alternative store concepts
Many retailers have established themselves in Vietnam with a hypermarket presence in one of the major retail hotspots, such as Hanoi or Ho Chi Minh City.
Lotte and hypermarket chain Aeon are appealing to families and experimental shoppers with department store formats that act as wider shopping and entertainment destinations. Aeon is also making its mark with a loyalty scheme that includes tailored offers for mums, such as birthday treats or discounts on baby care products.
Product innovation for a changing market
A new concept in Vietnam, private labeling is appealing to young, experimental shoppers thanks to their lower prices and alternative products.
Aeon has introduced its TopValu private label range, which taps into the popularity of Japanese culture by offering authentic Japanese ingredients and home cooking kits. The retailer is now working with local suppliers to explore domestic production.
An increasingly affluent middle class is also supporting demand for exclusive and imported novelties. Dairy Farm is well-known for attracting these shoppers with its packaged food, household, health and beauty ranges.
Expanding national coverage
A priority for most retailers is to create a nationwide presence. Lotte has built a network of ten hypermarkets spanning six big cities in Vietnam, making them the first pan-Asian retailer to achieve such a spread of coverage. Meanwhile, Ministop (Aeon), Guardian (Dairy Farm), and Shop&Go are pushing their convenience format in retail hotspots.
Major retailers are seeing good growth from their franchise models, making partnerships and mergers and acquisitions become hot topics.