Vietnam has been named among the Top 6 most-attractive retail markets in the world this year by AT Kearney in its Global Retail Development Index (GRDI), following India, China, Malaysia, Turkey, and the United Arab Emirates (UAE).
It outstripped populous markets such as Indonesia (8th) and countries with good retail markets in recent years, such as Thailand (30th), Philippines (18th), Kazakhstan (16th), and Saudi Arabia (11th).
This is evidence that Vietnam’s retail market is again attracting foreign investors, as it was outside of the Top 30 in 2012, then 6th in 2009, 14th in 2010, and 23rd in 2011, according to AT Kearney.
The reason why Vietnam is in the Top 6 is that its investment laws are open and promote its attraction among foreign retailers.
According to AT Kearney, The government has allowed 100 percent ownership by foreign retailers since 2015, and favorable policy continues to usher them in, as evidenced by the 12.5 percent growth in foreign investment in 2016. A recently concluded free trade agreement with the European Union is expected to further boost investments in Vietnam.
“It’s a suitable time for Vietnam to boost up its economy, which is shifting towards privately-owned enterprise and high-value export items, and this is expected to increase income and consumption in the long term," said Mr. Soon Ghee Chua, AT Kearney’s Southeast Asia chief.
He also believes that favorable government policies, urbanization and middle-class population growth, a young population, and GDP growth expected at 6.6% this year gives foreigners plenty of reason to be optimistic about Vietnam.
E-commerce is growing, with sales expected to grow 22 percent to account for 1.2 percent of total retail by the end of 2017, and online discounts and promotions are boosting sales. AT Kearney notes, however, that businesses will have to be careful and have a long-term strategy to sustain this growth.
Foreign retailers are expanding their business systems in the domestic market. According to AT Kearney, convenience stores and mini-marts are the fastest growing segments. Circle K and FamilyMart entered the market in 2009 and are expanding rapidly. FamilyMart expects to have more than 800 franchised stores by 2020 and 7-Eleven will open its first store in Vietnam this month under a franchise agreement with Seven System Vietnam, and aims to open 1,000 stores over the next ten years.
According to forecasts to 2020 Vietnam Institute for Trade - Ministry of Industry and Trade, modern retail channels will increase up to 45%, the country will have about 1,200-1,300 supermarkets, the number of trade centers will also increase to over 300, and convenience stores will number in the thousands.
The GRDI was first published in 2002, ranking 30 developing countries on their attractiveness for retail investment.
It analyzes 25 factors related to macroeconomics and retail, to help retailers identify global strategies and identify emerging market investment opportunities. The study not only indicates the most attractive markets today but also potential markets in the future.
Source: http://dtinews.vn/en/news