An Aeon Mall in Ha Noi. Viet Nam is at 11th spot in the world's top 30 fastest emerging global retail markets. — Photo vneconomictimes.com

HA NOI (Biz Hub) — Viet Nam has continuously been listed among the world's top 30 fastest emerging global retail markets since 2008, according to the Global Retail Development Index (GFDI) ranking.

The index is prepared by the United States' AT Kearney Company.

The study is based on all relevant macroeconomic and retail-specific variables. It is unique in that it not only identifies the markets that are most attractive today, but also those that offer future potential.

According to the study, Viet Nam has low market saturation and its GDP growth is highest among Southeast Asian countries in the GRDI.

Viet Nam is at 11th spot in the GRDI ranking. Its GDP has grown 5.2 per cent annually since 2013, the highest among its Southeast Asian peers also ranked in the GRDI.

Export growth and a 17 per cent increase in foreign direct investment has spurred economic growth, underpinned by Viet Nam's geographic advantage and low labour costs. This foundation led to impressive growth in 2015 in the retail sales area (22 per cent) and in retail sales (9.5 per cent).

Convenience stores have become a phenomenon in Viet Nam, according to the study, with estimated growth of more than 260 per cent in the number of stores since 2012. Also, consumers are willing to pay a premium for the convenience of having stores that open earlier and closed later in more locations, as in most cities, 80 per cent of people eat away from home.

Companies seeking to tap into these trends include domestic operator Vingroup, which opened 93 stores in 2015 and plans to open twice as many in 2016; Japan's FamilyMart, which will open more than 100 stores in 2016; and 7-Eleven, which is entering the market through a franchise agreement with Seven System Vietnam.

Some global heavyweights have also entered the scene. Apple opened a subsidiary in Viet Nam, which allows it to import and distribute cellphones directly to a market that now has more than 150 million mobile phone subscribers who increasingly desire smartphones.

South Korean hypermarket operator E-mart launched its first Vietnamese store in the Go Vap District of HCM City, before announcing further plans to expand its network to 52 stores by 2020. AEON also introduced Topvalu to Viet Nam in late 2015, tapping into the popularity of Japanese culture to offer authentic Japanese ingredients and home cooking kits.

These prospects have spurred significant acquisition activities, particularly by local and regional players. Viet Nam's Vingroup purchased Maximark, a local retailer, rebranding it under the VinMart+ banner. Earlier this year, Thai companies TCC and Central Group acquired Metro's cash-and-carry business and Casino's Big C grocery chain, respectively.

E-commerce in Viet Nam is expected to grow as the use of mobile phones spreads and online shopping becomes more common. E-commerce campaigns are ramping up, including Online Friday, held by onlinefriday.vn, which attracted 1.1 million visitors and close to 2,000 participating retailers.

From 2011 to 2015, Viet Nam saw a continuous growth in retail turnover, worth VND2.47 trillion (US$111 trillion), accounting for 76.2 per cent of the total retail and consumption value, according to a workshop discussing challenges facing the domestic retail sector in international integration held in HCM City on June 28.

Many market research companies and experts forecast that the retail market of Viet Nam has great prospects for high growth in the future, driven by a population of 91.7 million with high consumption demands.

President of the Vietnam Retailers Association Dinh Thi My Loan underlined the challenges facing domestic retailers in international integration.

Echoing Loan's opinion on the increasing competition in the market, Nguyen Thi Thu Trang, director of the Centre for WTO and Integration of the Vietnam Chamber of Commerce and Industry (VCCI), called for incentives to ensure the sector's sustainable development.

For the first five months this year, Viet Nam's total retail sales and services revenue reached VND1,430 trillion, a year-on-year increase of 9.1 per cent.

Meanwhile, the purchasing power of goods retailers witnessed high growth of 9.5 per cent in the period, amounting to VND1,920 trillion, accounting for two-thirds of the total retail sales and services revenue. — VNS