Vietnam Overseas

28 June 2007

Supermarkets have existed in Vietnam for around a decade, and have triggered profound changes in production and marketing methods and consumption patterns. While they still have only a small market share, there are fears that they will push the country’s poorest people aside. This was shown clearly in a recent study by CIRAD and several Vietnamese partners.

The development of the supermarket sector is symbolic of the industrialization and globalization of agrifood systems. However, these processes generally result in major changes, in terms not only of food distribution, but also of production and consumption. In view of this, an initial large-scale study of the impact of supermarket development on the poorest categories of the population was recently conducted in Vietnam by the Franco-Vietnamese research consortium Markets and Agriculture Linkages for Cities in Asia (MALICA), of which CIRAD is a member, in conjunction with the Making Markets Work Better for the Poor (M4P) project.

The researchers surveyed 300 producers, 300 households and almost 200 traders. Several vegetable, fruit and rice production chains were analysed, with the aim of providing policy decision-makers and economic players with keys to understanding the issues surrounding the development of supermarkets and to supporting the process.

A film has been made of a discussion of the results between Dao The Anh, Director of the Centre for Agrarian Systems Research and Development (CASRAD) in Vietnam, and Paule Moustier and Muriel Figuié, socioeconomists at CIRAD.

The MALICA research consortium is an original long-term cooperative operation involving France and Vietnam. The aim is to build capacity to analyse food markets in Asia, in the hope of turning growing demand on local markets and integration into the WTO into an opportunity for producers in the region.

The consortium involves CIRAD, research centres belonging to the Vietnamese Academy of Agricultural Sciences (CASRAD and FAVRI) and the Institute of Policy and Strategy for Agriculture and Rural Development’s Rural Development Centre (RUDEC).

The M4P project is funded by the Asian Development Bank and the Department for International Development (DFID) in the United Kingdom.

• Moustier P., Dao The Anh, Hoang Bang An, Vu Trong Binh, Figuié M., Nguyen Thi Tan Loc, Phan Thi Giac Tam (eds), 2006. Supermarkets and the poor in Vietnam. Hanoi, Vietnam, Malica & M4P [Download the report].
• Cadilhon J.J., Fearne A., Figuié M., Phan Thi Giac Tam, Moustier P., Poole N., 2006. The economic impact of supermarket growth in Vietnam food supply chains. The International Journal of Environmental, Cultural, Economic and Social Sustainability, 2 (7): 1-12.
• Cadilhon J.J., Fearne A.P., Phan Thi Giac Tam, Moustier P., Poole N.D., 2006. Traditional versus modern distribution systems: insights from vegetable supply chains to Ho Chi Minh City. Development Policy Review, 24 (1): 31-49.
• Moustier P., Figuié M., Loc N.T.T., Son H.T., 2006. The role of coordination in the safe and organic vegetable chains supplying Hanoi. Acta Horticulturae, 699: 297-303.

March 22, 2008 |

Thanh Nien News March 22, 2008

A Thai company believes it can take advantage of an emerging consumer trend in Vietnam - supermarket shopping.

Thailand’s leading technology and trading company Loxley plans to open a new chain of 24-hour convenience shops in Vietnam.

Loxley’s senior international business manager, Prasert Suvithyasiri, said supermarket shopping had become increasingly popular in Vietnam over the past 10 years.

“Sometimes, your supermarkets are even overcrowded,” Suvithyasiri told Thanh Nien.

Vietnamese consumers’ growing predilection for Western-style supermarkets and stores is a windfall for foreign companies such as Loxley, which will be able to enter the local retail market next year.

At present, foreign enterprises can establish a foothold in the Vietnamese retail market by acquiring up to 49 percent in joint ventures with local companies.

A handful of well-known retailers including the likes of US-based supermarket giant Wal-Mart and Japan’s 7-Eleven convenience store chain are assessing their chances in Vietnam.

Malinee Tratrudee, assistant vice President’s secretary at CP All, which runs 7-Eleven in Thailand, said her company was considering bringing the iconic brand name chain to Vietnam.

While 7-Eleven is still pondering the idea, earlier this week, Loxley and its Thai partner, consumer product giant Saha Group, announced their intention to open their own convenience stores here.

Suvithyasiri, who has been working in Vietnam since 1995 and speaks Vietnamese like a native, said by the end of the year or early next year, the two partners would open their first stores in Ho Chi Minh City.

Although Vietnamese consumers have yet to switch wholesale from street markets to supermarkets and convenience stores, that is not discouraging Loxley.

Suvithyasiri said his company has a plan to weave their convenience store plan into Vietnamese’s changing shopping habit.

In the first phase, Loxley stores would be located in areas where local residents would find it convenient to drop by for a quick shop, places near parking lots or banks.

Later, more shops would open in residential areas where local residents would find “all things they need right next door,” Suvithyasiri explained.

The current high rent in Vietnam is not a deterrent for Loxley either, according to Suvithyasiri.

He said the company would not rent local space itself but rather “franchise interested households or businesses.”

The mother company will only have to ensure a continuous and diverse supply of goods, he said.

Suvithyasiri admitted there was a stumbling block in Loxley’s plans - Vietnamese consumers do not shop very often at night.

But Suvithyasiri said the company would press ahead with plans for 24-hour convenience stores anyway.

“In Thailand, convenience stores depend mostly on their night sales,” he said.

“The case may be different in Vietnam.”

Whether or not Vietnamese consumers will embrace the idea of foreign-brand convenience stores, local companies are betting domestic shops will survive the intense foreign interest in the sector.

Local retail giant Hapro plans to open more than 200 stores in 10 northern cities and provinces by this year’s end.

Other retailers such as Saigon Co.op and Vinatexmart also have plans to launch new supermarkets to meet Vietnamese’s growing appetite for “fast shopping.”

Vietnam’s leading supermarket chain, Saigon Co.op, has opened a new Co.opMart in the central Binh Thuan province as part of strategy to stand among the top 500 retailers in the Asia-Pacific region by 2010.

The VND65 billion (US$4.1 million) outlet in the coastal city of Phan Thiet comes as the 21st store in the chain.

It stocks more than 20,000 items with the vast majority of which are supplied by leading domestic producers focusing on consumer goods, fashion clothes, electronic home appliances and food.

Nguyen Ngoc Hoa, general director of Saigon Co.op said the operator is set to have 30 branches by the end of the year.

The other supermarkets would be opened in HCMC, Dong Nai, Long An, Ba Ria – Vung Tau, Phu Yen, and Ninh Thuan.

Each store is estimated to cost the operator between VND30 billion to VND60 billion.

The chains largest store, set to open mid-year, would cover some 13,000 sq.m in Dong Nai Province’s Bien Hoa City.

The four-floor Co.opMart Bien Hoa is expected to cost VND58 billion, a joint venture between Saigon Co.op and Bien Hoa Import-Export Co (Bihimex).

Future plans

Saigon Co.op has recently set up an investment arm with VND500 billion (US$31 million) in chartered capital to seek finances for its business development plans which also include real estate projects.

Its expansion plans will see Co-op Mart operate about 100 supermarkets and mini-marts by 2015, each covering 500 to 10,000 sq.m by using both own capital and forming joint ventures.

Saigon Co-op recently struck a deal with the Saigon Trading Group (Satra) and distributor Phu Thai to develop a chain of new retail stores and wholesale centers in Vietnam.

Saigon Co.op and Satra plan to establish a retail conglomerate in HCMC, named Co.op Mart-Satra.

Satra will contribute capital in these projects while Saigon Co.op brings both cash and experience to the table with.

Saigon Co.op is also discussing plans with Phu Thai to expand operations to northern Vietnam.

Under the plan, Phu Thai will play a part in providing sites for building supermarkets.

The two partners also plan to build wholesale centers to supply goods for retailers and supermarkets as well.

Saigon Co.op obtained over VND2.9 trillion in revenue last year, a year-on-year jump of 25.89 percent.

Domestic retailers have said the search for floor space and qualified staff to run outlets would prove to be the major obstacles to distribution in the country.

Source: Thanh Nien, NLD – Compiled by Dong Ha

Story from Thanh Nien News

Published: 02 May, 2007, 10:29:38 (GMT+7)

Copyright Thanh Nien News

10:12′ 06/06/2006 (GMT+7)

VietNamNet – Phuong Nam Joint Stock Bank has sold 1mil of its shares to the Securities Trading Company of the Bank for Foreign Trade of Vietnam (VCBS) at VND59,000 per share.

Total value of the deal is VND59bil (US$3.68mil). Current price of Phuong Nam shares on the over-the-counter (OTC) is fluctuating between VND56,000-VND60,000.

Phuong Nam is also negotiating with the US’ Cathay Bank, where Cathay would become a strategic shareholder.

Phuong Nam now has chartered capital of more than VND580bil ($36.2mil) and assets of over VND5tril ($312.5mil).

Phuong Nam was recognized by the US’ Union Bank of California and Wachovia as the best bank in international payment in 2004. It is also selected as a “famous brand” in banking-finance-insurance in 2006.

(Source: SGTT)