Japanese retailers struggle in Vietnam

by VOV13 April 2016 Last updated at 17:12 PM

VTV.vn - A growing number of Japanese retailers are moving into the Vietnam retail market hoping to carve out a profitable niche in the nation’s sizable consumer market some 90 million strong.

FamilyMart, Japan's third largest convenience store chain first began operations in Vietnam in 2013 followed by Aeon Group, headquartered out of Mihama-ku, Chiba, Chiba Prefecture in 2014. 

Meanwhile major department store Takashimaya and Japan based 7-Eleven stores are planning to open their first establishments in Ho Chi Minh City sometime in early to mid-2016.

These Japanese retailers, however, are not necessarily experiencing universal success in their Vietnam operations, leaving many leading economic experts to question whether they have the savvy to survive.

Local retailers in Asia are beginning to transform themselves from family-run shops to full-fledged commercial businesses, said Nagahisa Oyama, Aeon's representative in Vietnam.

We fully expect competition with local businesses will gain in intensity over the next few years, said Mr Oyama, and we are moving to stock our stores with strong private-label products to help us stand out from competitors.

Aeon has also dissolved all relationships with local Vietnamese business partners after experiencing too many difficulties and questionable business practices, said Mr Oyama.

FamilyMart also cut its ties with its local businesses partners citing an inordinate number of difficulties as well— saying when tying up with local firms, companies need to investigate their proposed partners very carefully.

Both Japanese chains have also come up short on their originally announced expansion plans for Vietnam.

Japanese supermarket operator Aeon has unveiled plans to expand its private brands for the Vietnam market to roughly 2,300 items by fiscal 2017, working with local manufacturers to develop relevant products.

The Japanese retail giant is betting heavily on the Vietnam market to help turnaround its sagging sales and profits worldwide. Notably, last December Aeon announced the first closure of a store in Malaysia.

Aeon is now banking on Vietnam as a source of growth and has high hopes to quadruple the size of its network in Vietnam to 200 store.

According to a recent article published by Bloomberg, the Aeon Group is the leading bidder for the acquisition of Big C Vietnam, which has a proposed purchase price of US$800 million.

French retailer Group Casino is planning a 2nd round of bidding for the sale of its Big C Vietnam network, a source close to the group has revealed.


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