Nielsen report predicts convenience stores will play a larger role in retail landscape in years to come.
While consumers have become more “savvy” about their shopping behavior in recent years the need for convenience continues to grow, according to a Nielsen report on Convenience Stores released today.
As household sizes reduce across Vietnam and Asia alike the growth of small format convenience stores is predicted to have a significant impact on the Vietnam landscape in the coming years.
This trend is already well underway with neighbors such as Thailand, China and Indonesia leading the way. In Vietnam, store expansion also continues to gain momentum, especially in urban areas.
Convenience store numbers more than doubled from 147 in 2012 to 348 in 2014, while minimarts increased from 863 stores in 2012 to 1,452 stores in 2014. (see Chart)
Number of Modern Trade Stores in Vietnam
Source: Nielsen Vietnam
According to the report, this new demand among Vietnamese consumers is being led by time-poor and predominantly young shoppers in making everyday food and grocery purchases, which has been a key driver in the initial growth levels of convenience store expansion. Twenty-two per cent of Vietnamese consumers shop for food and groceries more often at convenience store compared to 12 months ago.
Moreover, food and beverages today are driving convenience store sales, with 86 per cent consumers buying both while 62 per cent of beverage buyers also buy food and 51 per cent of food buyers also buy beverages.
“Convenience is not a store front, but rather a way of life,” said Mr. Vaughan Ryan, Managing Director of Nielsen Vietnam. Consumers are increasingly demanding products and solutions that help them in their increasingly busy life. “As a result we will see the emergence of both the convenience channel and e-commerce in Vietnam, to meet this consumer demand,” he said.
Wet markets and traditional trade stores, meanwhile, remain the preferred retail channels for Vietnamese shoppers, according to the report.
These traditional areas of shopping, however, are under threat as consumers shift away from them, with both declining in 2014 compared to 2012, at 5 per cent and 17 per cent, respectively. Visit frequency also fell.
“In order to address these shifts, retailers must deepen their understanding of this evolving shopper behavior, foresee changing needs, and develop strategies that are focused on differentiation in areas that matter most to shoppers,” the report said.