Top 10 retail companies in Vietnam
Tags: Company, Top 10, Retail, Vietnam

The list of top 10 companies in Vietnam’s retail industry 2019 was made based on scientific and objective principles.

Companies are assessed and ranked based on three main criteria:

Financial capacity shown in the latest financial statements (total assets, total revenue, profits, performance, efficient use of capital, etc); Media reputation assessed by the Media Coding method which codes articles about the companies on influential media channels; Consumers survey on the level of awareness and satisfaction with the company’s products / services;

Expert survey on the position of companies in the industry; and Enterprise survey conducted in September 2019 on market size, labor, capital, revenue growth rate, profits and operation plan in 2019.

Top 10 retail companies in 2019: Fast-moving consumer goods, supermarkets

Top 10 retail companies in 2019: Durable goods, electronics, refrigeration, gold and silver

In recent years, Vietnam’s retail industry has experienced rapid growth. The compound annual growth rate (CAGR) in the period of 2013–2018 was 10.97%. Total retail sales are also expected to reach USD 180 billion in 2020, equivalent to an increase of 26.6% from 2018.

Vietnam has achieved a high growth rate in the retail sector in recent years due to its large population of more than 97 million people (according to the latest data in 2019), and young population structure (60% of the population are at the age of 18–50). In addition, household spending of Vietnam is also forecasted to increase by 10.5% per year on average, accompanied by a strong growth of the middle class. The strong rise of digital retail channels and e-commerce is also a contributing factor to this growth.

Industry forecast

The competition is fierce. Although the retail industry has great potential for development, it is accompanied by a very fierce competition with the “landing” of many foreign and domestic enterprises. Many domestic retailers have been forced to leave the market. In particular, foreign businesses have gradually grasped Vietnamese consumers’ tastes and habits in order to adjust appropriate business strategies to compete with their domestic counterparties.

In terms of experience in developing trade centers, Vietnamese enterprises will have difficulty in competing with foreign retail chains which have modern models and financial potential. However, Vietnamese businesses are showing strength in the field of convenience stores. Especially, when the market in urban areas is gradually becoming saturated, retail businesses will need to spread to rural areas, which are potential “land” for them to build their distribution channels. Rural areas, which account for nearly 80% of the country’s area with more than 70% of the Vietnamese population, is a huge market and exponentially in need of shopping due to the rapid income improvement.

Retailers must change. The trend of applying 4.0 technologies to meet the needs and tastes of consumers is forcing retail businesses to change to survive in today’s fierce competitive environment. In fact, the industrial revolution 4.0 in the retail sector is quietly taking place and creating many development opportunities for Vietnam with breakthrough changes from diverse, effective and fast service standards based on digital technology platform.

According to recent statistics released by Appota​, Vietnam is among the top 20 countries with the highest Internet users in the world with 49 million people having access to the Internet. The number of people who only use the phone to access the Internet in Vietnam, especially between the ages of 18–34, accounts for a very high rate compared to the rate of people using computers or other devices. On top of that, Vietnam is a country with a high mobile connection: 55% of Vietnamese own a smartphone and it is predicted that by 2020, 8 out of 10 Vietnamese will have 8 mobile phone (Google APAC), and 46% of the population will own a personal computer. This is the motivation for online trading in Vietnam to developing.

Consumers often use online channels to purchase three main groups of products: Travel reservations, airline tickets, hotels (accounting for 54.4%); Clothing, footwear (41.2%) and household appliances (38.2%).

There will be more M&A deals. With an investment environment which is considered to be much improved, creating favorable conditions for investors, Vietnam is a promise land for domestic and foreign retailers to expand their operations through M&A deals, franchise and other cooperation models to maximize market size with a population of nearly 100 million people.

There have been many large-scale M&A deals, such as Metro Cash & Cary Vietnam (including 19 centers and related real estate) worth 655 million Euro, Big C Vietnam (32 supermarkets / hypermarkets) worth US $ 1.14 billion, and Vinmart — Masan (2,600 supermarkets stores). Besides, the market has also witnessed a strong rise of domestic investors, typically BRG Group has implemented M&A activities with Intimex and Hapro; Saigon Co.op with Auchan chain (France). In the coming time, Vietnam is expected to continue to be a bright spot for M&A activities in the region and certainly, the retail industry will attract a lot of capital inflows from M&A.

>>> ​Find out more: Top 10 M&A deals in 2019

In order to be successful, retail businesses must focus on good management and reputable brand in addition to good strategic planning. Facing the increasing wave of penetration by foreign investors, Vietnamese retail businesses need to overcome themselves, promote their strengths in culture and experience, and at the same time connect with each other.

Compiled by VietnamCredit