Vietnam business opportunities in the retail sector 2023
With the rapid recovery of the economy, Vietnam's retail industry also has many significant changes. In 2022, domestic and foreign retail enterprises have actively grasped Vietnam business opportunities as well as increased their scale and market share...
According to experts, basically the development trend of the retail industry in 2023 and the coming years is still based on changes in consumer shopping behavior after the pandemic and the application of digitalisation. across the industry. Recent changes in the retail industry, from purchasing behavior, technology, labor models, the combination of sales channels to the formation of different business models under the impact of Covid-19, create a new face for the retail industry with new shopping experiences and business opportunities for many retail businesses in Vietnam.
Vietnam's retail market is vibrant, opening up many business opportunities
The assessment of the Domestic Market Department (Ministry of Industry and Trade) shows that in the first 11 months of 2022, production activities and people's daily life gradually recovered, and the demand for goods began to increase. Although the domestic commodity market is affected by the world market, the prices of some goods tend to increase according to the world commodity prices, however, the domestic market in general has recovered significantly after two years. year affected by the pandemic. The supply of basic goods is sufficient to meet consumer demand, commodity prices do not have large fluctuations, the market is relatively stable and there are relatively many Vietnam business opportunities for local retailers as well as abroad outside.
It can be said that the retail market in the last months of the year recorded outstanding growth when the economy was recovering and developing. According to the General Statistics Office, the total retail sales of consumer goods and services in November 2022 were estimated at 514.1 trillion VND, up 2.6% over the previous month and up 17.5%. compared to the same period last year. In the first 11 months of 2022, the total retail sales of consumer goods and services is estimated at VND 5,180.5 trillion, up 20.5% over the same period last year (decreased by 5% in the same period in 2021). Excluding the price factor, the increase is 16.9%.
In fact, in the whole year of 2022, there are more retail businesses opening or increasing the number of stores in big cities. The affordable sector catering to mass demand, including supermarkets, convenience stores, home appliances, healthcare services, and dining, is thriving and steadily expanding. Towards the end of the year, the heat of domestic consumption is increasing, with fierce competition for coverage of a series of retail industry names, either by franchising or by optimizing the business ecosystem. The Sherpa (Masan Group) acquired 85% of Phuc Long Heritage.
Retail market with many Vietnam business opportunities
"The two years of the pandemic can be compared to a market research period and this year is the right time for retail brands to launch expansion plans as well as break through the race," said Ms. Head of Retail Services, Colliers Vietnam, commented.
Many multinational retailers believe that Vietnamese people's consumption habits are gradually changing when they switch to shopping at the same location instead of going to traditional retail stores. Besides, the increasing modernization of shopping experiences is expected to bring about more Vietnam business opportunities.
It can be seen that in 2022 and into 2023, the race for retail market share is always exciting and opens up many Vietnam business opportunities. Economist Vu Vinh Phu, former chairman of the Hanoi Supermarket Association, said that Vietnam's retail industry still has a lot of potential and is being invested by many domestic and international businesses. If Vietnamese enterprises do not actively integrate, have a methodical and long-term investment strategy, they will lose their position right at home. Especially, the transformation trend in Vietnam's retail industry in the post-pandemic period has changed a lot. In the coming time, businesses not only expand their coverage but also need to invest in developing a multi-channel model to match the current trend.
New trends and opportunities for 2023
According to a NielsenIQ report, in Vietnam, the traditional channel is still the main retail channel and accounts for more than 80% of the market share of sales volume, much higher than other countries in the region. However, contrary to the growth trend of the region and the world, the revenue value of traditional channels in Vietnam decreased sharply (down 9.4% over the same period last year).
In the first 11 months of 2022, the total retail sales of consumer goods and services is estimated at VND 5,180.5 trillion, up 20.5% over the same period last year (decreased by 5% in the same period in 2021). Excluding the price factor, the increase is 16.9%.
Vietnam business opportunities are witnessing special growth in modern shopping channels, especially convenience stores, opening up new business opportunities. Besides, as one of the Southeast Asian countries with the fastest growing digital economy (36%), e-commerce in Vietnam has great potential for growth, with an average annual growth rate of 36%. 25% year, according to Vietnam E-Commerce White Book 2022 published by the Ministry of Industry and Trade.
E-commerce in Vietnam has a lot of potential for business opportunities
A survey of retail businesses by Vietnam Report shows that the percentage of businesses recovering from operating durable retail chains is much higher than that of fast-moving consumer goods chains. In addition, in the 5 key strategies of the new period of retail businesses after the epidemic, nearly 80% of retail businesses believe that it is necessary to diversify products, suppliers and control input quality to ensure continuous supply of goods, creating conditions to open up many new Vietnam business opportunities for this attractive market.
Under the pressure of increasing the cost of input materials in the world, businesses that cannot control their raw materials will be under great pressure to adjust their profit margins. Some businesses can actively increase selling prices to transfer some of the cost pressure to customers, helping to increase revenue but will reduce profit margins somewhat.
In general, the retail industry in 2023 highlights three main trends. First, online sales on social media channels (social commerce) will explode. As consumers will read and view more reviews, especially from KOLs, from influencers, retail businesses will develop more forms of renting or giving away products to retailers. reviewers, KOLs, influencers making videos or reviews, unboxing products or livestreaming sales on their social media channels.
Next is the process of personalizing the customer experience to increase the compatibility between products and customer needs. In order to understand consumers better, 69.2% of retail businesses surveyed by Vietnam Report expect to increase spending on marketing in general. In which, more than two-thirds of businesses said that they will focus on marketing items related to customer relationship management and customer experience. This contributes to many Vietnam business opportunities for effective businesses through understanding customer tastes.
Finally, omnichannel sales continue to flourish thanks to the advantage of increasing the seamless shopping experience for consumers. The combination of physical retail stores, retail technology and e-commerce platforms will become important elements in the omnichannel development strategy, creating many breakthrough Vietnam business opportunities for the retail industry.
Opportunities for retail businesses when promoting a strategy to understand consumers
Along with increasing the shopping experience, domestic retail businesses have the added advantage of better understanding domestic consumers. And this factor needs to be transformed and turned into practical programs to further expand Vietnam business opportunities as well as internationally.
At the forefront of the action strategy to understand consumers, it is impossible not to mention the "giant" in the fast-moving consumer goods industry - Masan Consumer (a subsidiary company of Masan Group). The unit plans to share 50% of marketing costs for digital, build a user understanding center, and invest "in depth" in Research and Development (R&D) activities. In particular, the plan will build 5 consumer understanding and innovation centers across Vietnam to better understand consumers, thereby developing appropriate products.
Not only standardizing products to meet domestic consumer needs, Masan Consumer also aims to meet the strict standards of foreign markets and the tastes of people here. The proof is the positive reception of the Japanese and Korean people for the CHIN-SU seasoning product set and CHIN-SU pho that this unit has brought to two famous markets with one of the strictest standards.Integrate many modern utilities for the consumer - retail platform
Understanding customer needs and capturing ever-changing consumer shopping behavior is an important goal of retailers and is important in creating many Vietnam business opportunities. Along with traditional sales channels, these units need to urgently transform digitally, apply information technology, e-commerce, deeply exploit online sales channels, and integrate multi-channel media in e-commerce.
Masan – Vietnam's leading retailer has adjusted its sales methods to accommodate rapidly changing consumer behavior in urban areas, and the growth of modern trade (MT) and e-commerce channels. The company plans to increase the proportion of revenue from MT and e-commerce channels from 40% to 60% by the end of 2025. At the same time, Masan will launch new distribution channels to reach consumers shopping through multiple channels.
Along with that, to increase user experience, this unit has integrated financial services into the retail consumer platform through many programs that bring many benefits to customers. Currently, loyal customers of WinMart and WinMart+ using Techcombank cards receive many incentives such as: 3% refund on orders, one-touch, contactless payment.
The WIN Membership program deployed across the system of more than 3,500 WinMart/ WinMart+ supermarket stores has also attracted consumers with the result of achieving 5.7 million registered members after just over 6 months of implementation. WIN members shopping at this system receive a 20% discount on all MEATDeli and WinEco products, along with a list of hundreds of discounted essential products.
In general, the general recovery of the economy has promoted the retail industry to grow again, creating promising Vietnam business opportunities, businesses that understand their core strengths have had innovative strategies and initiatives that have achieved positive initial results. Masan - Vietnam's leading retail consumer enterprise also recorded positive business results in the second quarter of 2023, promising many positive highlights in the second half of this year.