Local retailers are scrambling for expansion their supermarket chains nationwide in order to hold bigger market shares before the flock of foreign investors from January 2009 when it opens the distribution market for foreigners under its WTO commitments, local media reported.
Saigon-Nguyen Kim is the latest domestic concern to widen a retail network with the opening of the CMC Plaza shopping center in Ho Chi Minh City.
The 4,000-sq.m center can house 10,000 visitors a day, said marketing director Pham Linh Phuong, adding that the center is intended to anchor a nationwide chain of nine supermarkets in major markets such as Ho Chi Minh City, Hanoi, Can Tho, Danang and Binh Duong province.
The supermarkets are expected to seize up to 20 per cent of the nation’s retail market by 2010, Phuong said.
Recently, at least five new supermarkets have been opened in Ho Chi Minh City, including VinatexMart, Bien Hoa Co.op Mart and CitiMart.
Regarding home electronics, consumer demand for the goods in Vietnam is predicted to reach US$3 billion a year while retail sales currently stands at only US$1.2-1.3 billion per year, said a market research by GfK Vietnam and AC Nielsen Vietnam.
A recent report by RNCOS, a market research consulting firm, said that Vietnam’s retail sector will experience rapid changes between 2007 and 2011, becoming one of the seven most profitable retail markets worldwide with overall growth in the field faster than anywhere in the world outside of China and India.
Land lease rates for prime building sites will likely increase by 200 per cent or more in the next three years, forming a potentially insurmountable barrier to domestic retailers trying to stake out the markets.
The country’s total retail sales revenue in the first half of 2007 increased 22.9 per cent on-year to VND335.6 trillion (US$21 billion). (VNS)
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