Mr.Tadahiko Ishikawa from Aeon Vietnam, Hanoi Branch, shares his thoughts on Aeon's business plans in Vietnam and the potential of Vietnam's retail market.
■ Many Vietnamese consumers still prefer traditional markets and grocery stores. What type of challenges does this present as Aeon brings modern retail outlets to the country?
Vietnam’s retail market is similar to Japan’s 30 years ago. Consumer habits will gradually change over the next ten years.
Traditional markets will continue to exist due to the advantages they hold. However, modern retail channels such as supermarkets, shopping malls, and convenience stores will also increase. This is inevitable.
In addition to shopping for essential items, Vietnamese consumers also like to enjoy fun and interesting entertainment with thoughtful and enthusiastic services. Families with kids and groups of friends can come to shopping malls and enjoy fun recreational activities at the weekend.
■ What are Aeon Vietnam’s business plans in Vietnam over the next three to five years?
Regarding Aeon’s General Merchandise Stores (GMS), we target to open 16 outlets in Vietnam from now to 2020.
Regarding Aeon shopping malls, we have not set specific targets on how many there will be in Vietnam. We are considering the matter, however, as we recognize the potential of the market.
Aeon does not target earning a profit immediately in Vietnam, instead planning to record solid development and perhaps only earning a profit after ten years in the country.
■ Does Aeon target to have more Vietnamese products in its distribution channels? What standards must Vietnamese goods meet?
Aeon would like more Vietnamese goods to be sold in our system. Many Vietnamese products are high-quality goods. In fact, Vietnamese fish fillets are exported and sold in Aeon supermarkets in Japan under Aeon’s private label, TopValu.
There are opportunities for Vietnamese goods to enter Aeon’s distribution channel. Japanese consumers focus on product quality. For example, with food products, hygiene and safety is a leading factor of concern.
Product quality and reliability are important and manufacturers need to maintain their stability. Vietnamese manufacturers should aim to maintain their prestige and have sustainable long-term business cooperation.
Packaging design is a weakness of exported Vietnamese goods. This is an important factor that affects consumer choice. The packaging of goods and the design in many countries are meticulously made and regularly renewed.
To promote export markets Vietnamese manufacturers and distributors should consider these factors and understand consumer habits.
■ What are your thoughts on the potential of Vietnam’s retail market?
Vietnam’s young population is an advantage in the development of its retail sector in general. The number of nuclear families has also increased, as have living standards. The demand for consumer goods and entertainment services, therefore, will rise in the future.
The liberalization of Vietnam’s economy also continues apace, with rules relaxed on foreign businesses setting up operations in the country. This creates more opportunities for foreigner retailers to develop retail facilities in Vietnam.
We have also noticed growth in the suburbs and city outskirts, and these are potential areas for retailers, including Aeon.