Retail market leans to investors with strong financial ability

Vietnamese Vingroup’s acquisition of 100 percent stakes of Maximark chain at the end of October has heated up retail market. The deal is said an affirmation that the retail market has leaned to investors with strong financial ability not only experienced foreign giants.

Supermarkets with good locations have been targeted by retail giants (Photo: SGGP/Financial Investment)

On October 26, the group purchased all shares of Maximark commercial centers and supermarkets under An Phong Company. It could be said that the deal’s negotiation took place within only two weeks.

Deputy chairman of the group Le Khac Hiep said that the acquisition is part of their larger strategy to develop retail system nationwide in an effort to become the leading one in this field.

They would work with domestic companies to hold steady Vietnamese goods’ market share and improve their competitiveness, he said.

After 20 years attending in the retail market, Maximark has slowly developed with four supermarkets in HCMC and five others in Tuy Hoa, Nha Trang, Cam Ranh, Phan Rang and Bien Hoa.

Despite that, Maximark possesses good and spacious locations. For instance, the supermarket in 3 Thang 2 (February 3) street, District 10 has a total area of 25,000 square meters, Maximart Cong Hoa in Tan Binh district stretches over 20,000 square meters.

After procedures are completed, the Maximark chain will be renamed Vinmart, member of Vincom Retail.

In the same month last year, Ocean Group announced to sell 70 percent of its retail and real estate businesses to Vingroup. Ocean Mart has been renamed Vinmart.
Vingroup has also bought 100 percent stakes of 39 Vinatexmart store system under the Vietnam National Garment and Textile Group at VND229.5 billion (US$10.28 million).

In addition, it has also purchased 80 percent shares of Hop Nhat Company, which is Vinlinks now, at about VND245 billion (US$10.97 million) to develop freight and express delivery services for the group especially members in its retail segment.

The number of Vinmart supermarkets now hits 125, Vincom trade centers 12 which is expected to near 40 next year and 100 by 2020.

Vingroup has also entered e-commerce with the launch of website selling many commodities comprising automobiles and motorbikes.

Chairman of Hanoi Supermarket Association Vu Vinh Phu said that the group has also attracted foreign direct investment. Specifically, U.S. Warburg Pincus Company has invested US$300 million in Vincom Retail so far.

Another retail giant in Vietnam Saigon Co.op has kept broadening its market share with 78 supermarkets, 94 convenient stores, two hypermarkets, Sense City commercial center, TV shopping channel HTV Co.op and SC VivoCity joint venture.

Two other giants Saigon Trading Group (Satra) and Hanoi Trade Corporation (Hapro) have been slow in the race to gain retail market shares.

In foreign sector, French Auchan Group on November 3 signed a strategic cooperation agreement with Military Petrochemical Joint Stock Company to set its first foot on Hanoi market and start building Simply Mart supermarket chain in the northern region.

Auchan has joined hands with C.T Group to open the first Simply Mart supermarket in District 5, Ho Chi Minh City.

South Korean Emart signed an agreement with U&I Investment Corporation to establish a retail join venture in Vietnam four years ago, the first supermarket has been opened in Hanoi. They have set a target to develop up to 52 supermarket and big stores by 2020.

Japanese Seven &I Holdings Company has announced that their stores would be opened in Vietnam by 2017.

Other foreign giants such as Big C, Lotte and AEON have also been busy with their expansion plans.

AEON Long Bien came into operation on October 28 marking it the third trade center of the group in Vietnam. Early 2015, the group acquired 49 and 30 percent shares of Citimart and Fivimart minimarts respectively.

Market share expansion has put retailers in another severe competition to attract human resources.

Navigos Search’s report shows that the retail industry held 13 percent of recruitments of medium and high class human resources in the second quarter this year.  The most recruited positions included salesman, sale supervisors, sale department heads and sale managers.

According to HR insider employment indicators report by Vietnam Works, one of the top employment and recruitment websites in Vietnam, retail was one of industries having the fastest year on year growth rate in the first half this year with about 58 percent.

By Thanh Lam – Translated by Hai Mien

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