Traditional markets winning retail battle with supermarkets in Vietnam

By Ha Phuong   July 12, 2017 | 05:00 am PT
The big-box shopping format is slowly but surely losing its share.

Hypermarkets and supermarkets in Vietnam witnessed negative on-year growth of 0.6 percent in 2016, according to the latest Winning Omnichannel report, an annual publication on fast-moving consumer goods (FMCGs) conducted by research firm Kantar Worldpanel.

Vietnam finished in the top five fastest growing markets in the world for traditional trade.

The big-box shopping format is slowly but surely losing its share, the report said.

Traditional markets accounted for nearly 80 percent of the total FMCG channel in Vietnam, while hypermarkets and supermarkets checked in with just over 10 percent.

Vietnam’s trade ministry has projected that by 2020 Vietnam will have 1,300 hypermarkets and supermarkets, and 337 trade centers.

However, the rising number of convenience stores together with a taste for online shopping are overshadowing these modern shopping outlets.

“Vietnamese shoppers prefer to shop at local stores where they have good relationship with the owners or they would love to walk around wet markets or stop by on the street with their motorbikes buying things from street vendors,” Peter Christou, an expert on shopper and retail trends at Kantar Worldpanel told VnExpress International in an email. 

“In order to expand in Vietnam, hyper and supermarkets have to overcome a series of challenges. They have to convince the Vietnamese to change their shopping habits,” he added.

According to Christou, hypermarkets and supermarkets are performing much more strongly this year, but traditional trade will continue to dominate in Vietnam over the next five years.

 
 
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