What are domestic retailers doing upon foreigners’ massive arrival?

Vietnamese retail chains are hurrying to expand their networks in anticipation of stiff competition with foreign giants.

The distribution network of Saigon Co-op

Metro Cash & Carry has been taken over by TCC Group, a giant from Thailand, which is now also eyeing Big C Vietnam. The domestic retail market has also witnessed the expansion of other retail chains such as Japanese Aeon, South Korean Lotte Mart and E-Mart.

However, according to Retail Asia Publishing journal and Euromonitor, the market survey firm, Saigon Co-op still tops the list of 10 leading retailers in Vietnam.

Saigon Co-op now has 81 supermarkets and two hypermarkets with Co.op Xtra brand. It also runs 96 Co.op Food shops, mostly located in HCM City, and 175 groceries.

Former chair of Sai Go Co.op Nguyen Ngoc Hoa, now deputy director of the HCM City Industry and Trade Department, has told the local press that Sai Gon Co.op hopes it can stay as the leading retailer in Vietnam from now to 2020.

The retail chain plans to obtain 300 retail points throughout the country by 2019 which would help raise the turnover to VND44 trillion from VND26 trillion in 2015.

Vietnamese retail chains are hurrying to expand their networks in anticipation of stiff competition with foreign giants.

However, the retailer has been warned that the presence of many foreign big players in the domestic market may hinder its plan.

Hoa said Saigon Co.op would follow the consumer cooperative model as the amended Cooperative Law took effect in 2015. 

Under the new model, all partners and consumers would contribute capital, own and run the retail network of Saigon Co.op. There would be millions of cooperative members, who will be both owners and customers of Saigon Co.op.

“Unlike joint stock companies, where people receive profits based on their capital contribution ratios, at Saigon Co.op, the profits would be distributed based on sales. The cooperative members who buy more goods will get bigger profits,” he explained.

With 70 Satrafood convenience stores, two Satramarts, three Satra Bakery & Cafés and the Binh Dien farm produce wholesale Market, the Sai Gon Trade Corporation (Satra) is also a big player in the retail playing field.

Tran Van Bac, deputy CEO of Satra, said the retailer has also geared up with the plan to expand the network. 

It plans to open 150-180 Satrafoods, seven Satramarts and five Centre Malls and projects a 15 percent sales turnover and 10 percent profit growth rate annually.

Satra will begin its equitization process in 2016 which is expected to attract many domestic and foreign investors.

The Bach Hoa Xanh chain, belonging to The Gioi Di Dong, the largest computing device distribution brand, has also surprised the public with its rapid expansion. Sixteen Bach Hoa Xanh shops have opened in HCM City.