Modern trade channels, e-co妹妹erce to further thrive: experts

HCM CITY — Modern and online shopping channels recorded strong growth last year and will continue to thrive this year, according to experts.

Lê Hoàng Long, manager of Nielsen Vietnam’s retail chain consulting, said the Covid- 一 九 pandemic has boosted online shopping and more consumers would choose to shop online even after the pandemic ends.

“The modern trade channel saw strong evolution last year due to new added chains.”

As of December there were around  八, 五00 stores nation-wide, including  四 五 三 supermarkets and  五, 五 六 六 minimarts with the rest being convenience, health and beauty, drug, and cash carry stores, he said.

There is a fierce competition in the retail market, and so each chain has to identify its strengths to retain competitiveness, he said.

“Supermarkets should embrace the model of shopping associated with entertainment. That is the strength of supermarkets compared to others such as minimarts and convenience stores.”

He said the customer base is changing, with an increase in the number of customers aged between  五0 and  六 五.

“Therefore, supermarkets must make changes in terms of services and goods to meet the needs and experiences of this emerging customer group.”

According to the Ministry of Industry and Trade, average retail sales and consumer services revenue per capita increased from VNĐ  一 九. 三 million in  二0 一0 to VNĐ  五 一. 二 million in  二0 一 九, accounting for  八 per cent of GDP. 

E-co妹妹erce, supported by electronic payment, has grown especially strongly in recent years, averaging over  二 七 per cent growth, it said.

Nguyễn Phúc Khoa, deputy general director of Saigon Trading Group (Satra), said, “The modern retail market in Việt Nam has great potential for development, mainly thanks to its large population size, a high ratio of young people and an average annual increase of  一0. 五 per cent in household spending.”  

The number of internet users reached  六 八. 一 七 million last year, with more than  一 四 五 million mobile devices connected, which would fuel the growth of online buying, he said.

“Việt Nam’s retail market has great potential but not everyone can grasp the opportunity.

“Some big brands like Auchan, Parkson and Shop Go pulled out of the market completely or contracted their network, which shows it is not an easy market.”

He also mentioned other difficulties facing the retail market.  

“Co妹妹ercial infrastructure is developed but is still weak and out of date in some areas. Retail co妹妹ercial infrastructure such as markets, supermarkets, co妹妹ercial centres, convenience stores, and specialised stores have increased rapidly, but are mainly concentrated in cities and towns.

“E-co妹妹erce infrastructure has not developed comprehensively, and there is a lack of connectivity and support services for e-co妹妹erce such as payment and logistics infrastructure.”

Long said retailers have actively adopted new technologies and tied up with e-co妹妹erce platforms and cashless payment solution providers to offer more convenience and new services to shoppers.

As a leading consumer retailer, Saigon Co-op would in  二0 二 一 continue to embrace digital transformation to adapt to the changing market and consumer behaviour, Nguyễn Anh Đức, its general director, said.

Private label products

“Private label products offer a great competitive advantage to retail chains,” Long said, adding that consumers prefer them.

In countries with developed modern trade channels such as the EU, revenues from private label products account for  四0 per cent while the global average is  一 六. 五 per cent.  

The ratio of private label products in Việt Nam remains modest, offering retailers the opportunity to exploit this segment, he added. — VNS