retailing in vietnam 2016

RETAILING IN VIETNAM

Euromonitor International

January 2016

R E T A I L I N G I N V I E T N A M P a s s p o r t I

© E u r o m o n i t o r I n t e r n a t i o n a l

LIST OF CONTENTS AND TABLES

Executive Summary ..................................................................................................................... 1

Slower Value Growth Due To Lower Consumer Price Index .................................................... 1 Aggressive Penetration From New Entrants Create An Increasingly Competitive Environment1 Grocery and Non-grocery Split Remains Stagnant in Comparison With 2014 .......................... 1 Saigon Union of Trading Cooperatives Continues To Lead Retailing in 2015 .......................... 1 Slower Forecast Value Growth Due To Predicted Price Drops ................................................. 1

Key Trends and Developments .................................................................................................... 1

Positive Economic Signs of Recovery Support Consumer Demands ....................................... 2 Aggressive New Entries Create An Increasingly Competitive Environment .............................. 3 Online Marketplaces Emerge As the Most Dynamic Internet Retailing Channel ...................... 4

Operating Environment................................................................................................................. 4

Informal Retailing ...................................................................................................................... 5 Opening Hours.......................................................................................................................... 5

Summary 1 Standard Opening Hours by Channel Type 2015 ......................................... 6

Physical Retail Landscape ........................................................................................................ 7 Cash and Carry......................................................................................................................... 8

Table 1 Cash and Carry Value Sales: 2010-2015 ..................................................... 8

Seasonality ............................................................................................................................... 9 Payments and Delivery ............................................................................................................. 9 Emerging Business Models .................................................................................................... 10

Market Data ................................................................................................................................ 10

Table 2 Sales in Retailing by Store-based vs Non-Store: Value 2010-2015 ........... 10 Table 3 Sales in Retailing by Store-based vs Non-Store: % Value Growth

2010-2015 .................................................................................................. 11 Table 4 Sales in Store-based Retailing by Channel: Value 2010-2015 ................... 11 Table 5 Store-based Retailing Outlets by Channel: Units 2010-2015 ..................... 11 Table 6 Sales in Store-based Retailing by Channel: % Value Growth 2010-

2015 ........................................................................................................... 11 Table 7 Store-based Retailing Outlets by Channel: % Unit Growth 2010-2015 ...... 12 Table 8 Sales in Non-Store Retailing by Channel: Value 2010-2015 ...................... 12 Table 9 Sales in Non-Store Retailing by Channel: % Value Growth 2010-2015 ..... 12 Table 10 Non-Grocery Specialists: Value Sales, Outlets and Selling Space

2010-2015 .................................................................................................. 13 Table 11 Sales in Non-Grocery Specialists by Channel: Value 2010-2015 ............... 13 Table 12 Non-Grocery Specialists Outlets by Channel: Units 2010-2015 ................. 13 Table 13 Sales in Non-Grocery Specialists by Channel: % Value Growth 2010-

2015 ........................................................................................................... 14 Table 14 Non-Grocery Specialists Outlets by Channel: % Unit Growth 2010-

2015 ........................................................................................................... 14 Table 15 Retailing GBO Company Shares: % Value 2011-2015 .............................. 14 Table 16 Retailing GBN Brand Shares: % Value 2012-2015 .................................... 15 Table 17 Store-based Retailing GBO Company Shares: % Value 2011-2015 .......... 16 Table 18 Store-based Retailing GBN Brand Shares: % Value 2012-2015 ................ 16 Table 19 Store-based Retailing LBN Brand Shares: Outlets 2012-2015 ................... 17 Table 20 Non-Store Retailing GBO Company Shares: % Value 2011-2015 ............. 18 Table 21 Non-Store Retailing GBN Brand Shares: % Value 2012-2015 ................... 18

R E T A I L I N G I N V I E T N A M P a s s p o r t I I


Table 22 Non-Grocery Specialists GBO Company Shares: % Value 2011-2015 ...... 19 Table 23 Non-Grocery Specialists GBN Brand Shares: % Value 2012-2015 ............ 20 Table 24 Non-Grocery Specialists LBN Brand Shares: Outlets 2012-2015 .............. 20 Table 25 Non-Grocery Specialists LBN Brand Shares: Selling Space 2012-

2015 ........................................................................................................... 21 Table 26 Forecast Sales in Retailing by Store-based vs Non-Store: Value

2015-2020 .................................................................................................. 22 Table 27 Forecast Sales in Retailing by Store-based vs Non-Store: % Value

Growth 2015-2020 ..................................................................................... 22 Table 28 Forecast Sales in Store-based Retailing by Channel: Value 2015-

2020 ........................................................................................................... 22 Table 29 Forecast Store-based Retailing Outlets by Channel: Units 2015-2020 ...... 23 Table 30 Forecast Sales in Store-based Retailing by Channel: % Value Growth

2015-2020 .................................................................................................. 23 Table 31 Forecast Store-Based Retailing Outlets by Channel: % Unit Growth

2015-2020 .................................................................................................. 23 Table 32 Forecast Sales in Non-Store Retailing by Channel: Value 2015-2020 ....... 24 Table 33 Forecast Sales in Non-Store Retailing by Channel: % Value Growth

2015-2020 .................................................................................................. 24 Table 34 Non-Grocery Specialists Forecasts: Value Sales, Outlets and Selling

Space 2015-2020 ....................................................................................... 24 Table 35 Forecast Sales in Non-Grocery Specialists by Channel: Value 2015-

2020 ........................................................................................................... 25 Table 36 Forecast Non-Grocery Specialists Outlets by Channel: Units 2015-

2020 ........................................................................................................... 25 Table 37 Forecast Sales in Non-Grocery Specialists by Channel: % Value

Growth 2015-2020 ..................................................................................... 25 Table 38 Forecast Non-Grocery Specialists Outlets by Channel: % Unit Growth

2015-2020 .................................................................................................. 26

Definitions ................................................................................................................................... 26

Store-based Retailing ............................................................................................................. 26 Non-store Retailing ................................................................................................................. 27

Sources ...................................................................................................................................... 27

Summary 2 Research Sources ...................................................................................... 27

R E T A I L I N G I N V I E T N A M P a s s p o r t 1


RETAILING IN VIETNAM

EXECUTIVE SUMMARY

Slower Value Growth Due To Lower Consumer Price Index

Vietnam is witnessing many dramatic gas price drops in 2015 resulting in an impressively low

inflation rate and consumer price index. As a result, many products are witnessing noticeable

unit price plunges that mainly factor to slow down retailing’s performance in value terms. In

general, most channels are continuing to see another year of lucrative performances in 2015

due to good market demand and major players’ great efforts in expanding distribution coverage

and investing in costly yet effective marketing campaigns.

Aggressive Penetration From New Entrants Create An Increasingly Competitive Environment

Retailing in 2015 is witnessing strong entries from both international and domestic players,

creating dynamic competition. While many new entrants are emerging, several other perennial

players are being acquired due to their inability to compete. In terms of pricing competition, most

major retailers are trying to offer the most competitive discounts to attract customers and thus

increase sales.

Grocery and Non-grocery Split Remains Stagnant in Comparison With 2014

In 2015, the grocery and non-grocery split is experiencing stagnation in comparison with

2014. Because groceries are deemed essential, grocery retailers continue to contribute more to

retailing’s overall sales performance compared to non-store channels. Nevertheless, both

categories are experiencing a stronger presence of modern stores.

Saigon Union of Trading Cooperatives Continues To Lead Retailing in 2015

Saigon Union of Trading Cooperatives continues to launch new supermarkets not only in big

cities but also in rural areas such as Sa Dec, Thot Not and Ben Luc. Meanwhile, the company

has also launched the new mobile app facilitating a reward point-tracking feature and informing

users about the latest promotions and discounts at all Co.opMart supermarkets around Vietnam.

Slower Forecast Value Growth Due To Predicted Price Drops

Over the forecast period, retailing is expected to witness a decelerating trend. The stronger

presence of imported products as a result of the government’s exemption of import tax for

various categories is expected to create intense pricing competition over the forecast period,

resulting in falling average unit prices of many products. Additionally, emerging channels such

as internet retailing and convenience stores are expected to slow down to more stable growth

after rapid development over the review period. As a result, value growth is expected to record a

slower rate compared to the review period.

KEY TRENDS AND DEVELOPMENTS



Positive Economic Signs of Recovery Support Consumer Demands

According to the World Bank, Vietnam’s GDP of the first half of 2015 reached 6%, illustrating

the highest GDP growth rate since 2009. The impressive recovery is largely due to the strong

growth of manufacturing and construction at a rate of 9% in 2015. In terms of average income,

the country has also witnessed a strong average salary rise from VND3.8 million/month in 2014

to VND4.5 million/month in 2015, representing a growth rate of over 18%, mainly due to the new

rule published on 11 November 2014 regulating the minimum salary in 2015. Supported by a

relatively healthy economic climate and increasing average salary, overall retailing has recorded

good current value growth of 9% in 2015.

Nevertheless, in comparison with the growth rate of 14% in 2014, retailing’s performance in

2015 is experiencing a declining trend. The significantly low inflation rate in 2015 mainly factors

to slow down retailing’s performance. According to the World Bank, it was predicted that the

inflation rate for 2015 would be around 2.5%. In comparison with 4.1% in 2014 and 6.6% in

2013, this is a remarkable recovery. By 3 December 2015, gas prices have dropped 11 times,

which is the main factor restraining CPI and inflation growth at slow rates. As a result, retailing’s

overall performance is decelerating in terms of value due to the plunging inflation growth rate

rather than decreasing market demand.

According to Foreign Investment Association, FDI of the first 10 months of 2015 grew by 14%

against that of the previous year. Due to the government’s new legislation allowing foreigners to

have full ownership over their own businesses without having to co-operate with any local

companies, international players are making considerable increases their investments in

Vietnam. On 19 January 2015, NTAssian Discovery Fund increased its number of shares to 6.2

million to hold a less than 6% share of Mobile World JSC. Meanwhile, Vietsin Commercial

Complex Development JSC (VCCD) also launched its first SC Vivo City shopping centre in

District 7, Ho Chi Minh City. As a result of strong foreign investment, retailing is witnessing

rapid distribution expansion activities. Modern grocery retailers recorded a spectacular outlet

growth rate of 28% in 2015, presenting a sharp increase against the 14% recorded in 2014.

Outlook

According to the World Bank, Vietnam’s GDP is predicted to achieve a growth rate of around

6.6% in 2016, which promises a bright economic climate over the forecast period. By the end of

the forecast period, retailing is expected to reach VND2,410 trillion with a value CAGR of 5% at

constant 2015 prices.

In comparison with the review period’s value CAGR of 7% at constant 2015 prices, the

prospective performance of the market is predicted to decelerate. As a result of fierce

competition caused by new entrants’ aggressive entries in 2015, major retailers are expected to

concentrate on competitive pricing strategies to compete against newcomers over the forecast

period. Consequently, lower predicted product prices are expected to mainly contribute to slow

down retailing’s value growth over the forecast period.

With increasing forecast GDP, the average salary is also estimated to increase over the

forecast period, allowing more consumers to shift to modern grocery channels such as

convenience stores, supermarkets and mixed retailers. As such, modern grocery retailers is

expected to record a value CAGR of 9% at constant 2015 prices. Meanwhile, as more

consumers are expected to move away from conventional channels, traditional grocery retailers

is predicted to witness a value CAGR of 4% at constant 2015 prices.



Aggressive New Entries Create An Increasingly Competitive Environment

Vietnam is becoming a free trading playground in 2015 with significant changes supporting

international players investing in the country. The government has eliminated laws restricting the

number of outlets/shares a typical foreign company can own, which is leading to huge foreign

investment pouring into the country.

As a result, 2015 is witnessing a significant emergence of new players. Aeon Vietnam Co Ltd

is among the most noticeable examples. After the first year since its initial mall was launched in

Tan Phu, Ho Chi Minh City, the Japanese retailing company opened its third mall in Ha Noi in

2015. The new entrant’s operations in Vietnam are so successful that it has become the leading

mixed retailer in the country after only two years after its entry into Vietnam. Meanwhile, the

leading electronics and appliance specialist retailer in Vietnam, Mobile World JSC has received

enormous investment from international financial corporations such as Mekong Enterprise Fund

II and NTAssian Discovery Fund, reinforcing its capital resource to help expand its distribution

coverage from 352 outlets in 2014 to 506 in 2015.

Import tax exemptions for products from certain countries as part of the Trans Pacific

Partnership Agreement is leading to an increasing presence of imported products, placing

serious pressure on domestic players. Despite the ever increasingly competitive trading

environment, Vingroup has aggressively penetrated retailing with potentially around 110

convenient stores, 16 supermarkets and 40 electronics and appliance stores by the end of 2015.

On the other hand, some perennial players are deciding to withdraw from the retailing landscape

as they have predicted an inability to compete with new giant entrants. In March 2015, Central

Group acquired a 49% share of Nguyen Kim Trading JSC, while Lotte Shopping Co bought a

70% share of Diamond Plaza.

Outlook

Over the forecast period, these new giant entrants are predicted to continue imposing a

significant impact on the competitive landscape of retailing. Armed with giant financial

resources, Mobile World JSC also plans to penetrate grocery retailing with an ambitious goal of

6,000 – 8,000 outlets by the end of 2020. If the company successfully implements its expansion

strategy, it will become a huge threat to other players operating in grocery retailers over the

forecast period. In relation to its enormous capital resource, it is feasible for Mobile World JSC

to potentially become one of the leading grocery retailers. In 2015, Mobile World JSC ranked

second in overall retailing with a 1% value share. After entering grocery retailers, the company

has good potential to become the biggest retailer in Vietnam over the forecast period.

In terms of suppliers, domestic manufacturers are expected to experience rising competition

from imported brands. In order to encourage consumers to support local products and survive

the prospective rivalry against international companies, Vietnamese manufacturers should focus

on capital mobilising activities to reinforce financial resources in order to invest in new product

development and viral marketing campaigns.

In the meantime, local players should also be cautious in their decisions about collaborating

with international corporations to prevent being acquired by these companies in the long term.

On the other hand, as consumers’ awareness of supporting the local economy is expected to

improve over the forecast period, many of them will begin prioritising domestic brands over

imported products as long as local manufacturers can offer higher quality products at more

competitive prices.



Online Marketplaces Emerge As the Most Dynamic Internet Retailing Channel

During the review period, internet retailing emerged with small independent Facebook stores

as the main channel. Initially, online marketplaces were available yet did not contribute

noticeable revenue to internet retailing. After fluctuating growth in the early stages of e-

commerce’s development, the channel witnessed a declining trend as consumers’ trust in online

shopping was damaged by poor quality products, false advertisements and scams. Not until

2014-2015 did the channel begin to pick up again largely due to the emergence of online

marketplaces such as Lazada, Sendo and Tiki. According to Vietnam E-Commerce and

Information Technology Agency, by the end of 2014, Vietnam had 283 online marketplaces

officially registered to the government, a dramatic increase compared to 90 websites in 2013.

In terms of the leading players, Lazada is considered to be the most successful online

marketplace. Carefully examining disadvantages of pioneering players namely Chodientu and

5giay, the company adheres to three commitments: competitive prices, no commission fee

charges for storeowners and strictly no counterfeits, which mainly account for its remarkable

achievement. In addition, Lazada also invests heavily in television commercials and Facebook

advertisements to help strengthen brand awareness.

In response to Lazada’s outstanding performance, Vingroup – the most noticeable new

entrant in 2015, has established a subsidiary named VinEcom with a huge charter capital of

over VND1 trillion. On 15 August 2015, VinEcom launched its first online marketplace Adayroi,

offering various product types that are not commonly found at online stores such as

automobiles, motorbikes and fresh food.

In the meantime, perennial players namely Tiki and Sendo, are concentrating on capital

mobilising activity to reinforce their financial resources to survive the fierce rivalry among

different marketplaces in Vietnam. While Sendo has decided to cooperate with three Japanese

companies in SBI Holdings, Econtext ASIA, BEENOS; Tiki is collaborating with two other

Japanese funding groups, namely Sumitomo and CyberAgent Ventures.

Outlook

With such a huge number of new entrants penetrating retailing in 2015, the predicted

competitive landscape of online marketplaces is predicted to inevitably experience fierce

competition. Giant players, namely Lazada, Adayroi, Sendo and Tiki are expected to invest

heavily in online advertising campaigns to seize the lucrative share of this channel.

On the other hand, smaller players are expected to own superior unique selling points such as

marketplaces specialised for niche categories in order to survive the prospective competitive

environment. Without adequate budgets for marketing to build up brand awareness, these

inferior players will need to offer specific value to consumers that can fill the gap that giant

competitors are leaving. Failing to do this, these companies might face bankruptcy over the

forecast period due to their inability to compete against leading players.

Most online consumers will become wiser and more fastidious when making their buying

decisions. Tech-savvy consumers tend to carefully research different brands and prices before

purchasing products online. This could lead to strong pricing competition among different

marketplace operators over the forecast period. In response to the upcoming trend, major

players are predicted to improve customer services such as flexible exchange or returns policies

and complimentary shipping. In general, consumers are expected to benefit from the predicted

trend, while operators are predicted to engage in furious competition over the forecast period.

OPERATING ENVIRONMENT



Informal Retailing

Vietnam’s informal retailing is mostly inclusive of street vendors and C2C (customer-to-

customer) online merchants. As these trading activities are not registered with the

government, there are no official statistics or data presenting actual sales. It is common to see

street hawkers selling various items ranging from grocery to non-grocery items such as fruit,

tissues, chewing gum and books. Spontaneous wet markets around industrial zones are also

a popular informal retailing channel in Vietnam, where blue collar workers have little time and

limited budgets for daily grocery shopping. During the review period, social networks and

online marketplaces have been emerging strongly, reflecting the rapid growth of the internet.

As a result, C2C online trading is something of a popular trend as urban citizens seek to earn

extra income.

While street vendors can be seen as having reached maturity, C2C online trading continues

to flourish in 2015. As a country, Vietnam has one of the fastest growth rates of new

Facebook users in 2015, which is strongly linked to the C2C online trading evolution during

the review period. With no tax and costly store rental fees, many people are daring to start up

small businesses in the online marketplace and social network channel.

As a result of increasing food safety awareness, more consumers are shifting to other more

trustworthy mainstream channels such as supermarkets and convenience stores. This,

however, is contributing to a shift away from street vendors of grocery products. On the other

hand, the increasing popularity of online C2C fashion stores spurred the growth of informal

retailing at the expense of apparel sales through mainstream channels, especially during the

first half of the review period. Nevertheless, in 2015 with the notable penetration of new

entrants such as Sense City and SC Vivo City, store-based apparel and footwear sales are

greatly improving as consumers with increasing disposable incomes become more exposed

to various new fashion brands.

Street hawkers are present across the country in public spaces in urban centres, industrial

zones, suburbs and even in more rural locations. Meanwhile, online C2C trading resides

mostly on Facebook and many marketplaces such as www.5giay.vn and chodientu.vn.

Online C2C trading mostly attracts urban consumers who are more knowledgeable about the

internet, while street merchants target the lower-income segment, especially blue collar

workers living near industrial zones.

In spite of the fact that street vending is not legal in Vietnam, it is very common to see many

spontaneous street-side wet markets and street hawkers across the country. Online C2C

stores, on the other hand, are generally considered legal because there is no official law

regulating C2C online trading activities in Vietnam in 2015. However, the Ministry of Industry

and Trade has announced that a new tax would be imposed on online C2C trading, including

Facebook stores and all other online marketplace stores. Although the practical means of

controlling this trading, as well as tax collection, has yet to be clarified.

Opening Hours

Due to the generally busier lifestyles of urban consumers in comparison with those from the

countryside, store-opening hours in big cities are generally later, at 09.00-22.00hrs, while

many stores in rural areas tend to close at 17.00-18.00hrs. In addition, the presence of 24/7

convenience stores is significantly more prominent in big cities, as these outlets target the

increasingly busy urban “night owl” consumers.

There are no restrictions on the number of days a store can open each year. Most retail

outlets open on Sundays so that retailers can attract more consumers. The number of hours

that stores can open on Sundays is not restricted by law.



Despite the fact that there are no known restrictions on 24hr opening in Vietnam, 24/7

operations remain limited to convenience stores. Due to the necessary high level of human

resources and associated costs, as well as the low number of consumers out late at night,

supermarkets and shopping centres in Vietnam do not open 24/7. However, during busy

seasons, such as before the Lunar New Year holiday, major supermarket operators, such as

Saigon Union of Trading Cooperatives, tend to open on a 24-hour basis in order to fully

exploit the season of strongest purchasing power in Vietnam.

Summary 1 Standard Opening Hours by Channel Type 2015

Channel 24 hour present?

Monday-Friday

Saturday Sunday Public holidays

Supermarket No 07.30-22.00hrs

07.30 -22.00hrs

07.30-22.00hrs

Open

Hypermarket No 08.00-22.00hrs

08.00-22.30hrs

08.00-22.30hrs

Open

Convenience Store

Yes 24-hours 24-hours 24-hours Open

Food/Drink/Tobacco Specialists

No 08.00-22.00hrs

08.00-22.00hrs

08.00-22.00hrs

Open

Independent Small Grocers

No 07.00-21.00hrs

09.00-22.00hrs

09.00-22.00hrs

Open

Other Grocery Retailers

No 07.00-21.00hrs

07.00-21.00hrs

07.00-21.00hrs

Closed

Apparel Specialist Retailers

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Electronics and Appliance Specialist Retailers

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Beauty Specialist Retailers

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Chemists/Pharmacies

No 08.00-21.00hrs

08.00-21.00hrs

08.00-21.00hrs

Open

Optical Goods Stores

No 08.00-21.00hrs

08.00-21.00hrs

08.00-21.00hrs

Open

Drugstores/Parapharmacies

No 08.00-21.00hrs

08.00-21.00hrs

08.00-21.00hrs

Open

Other Healthcare Specialist Retailers

No 08.00-21.00hrs

08.00-21.00hrs

08.00-21.00hrs

Open

Home No 08.00- 08.00- 08.00- Open



Improvement and Gardening Stores

21.00hrs 21.00hrs 21.00hrs

Furniture and Homewares Stores

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Bags and Luggage Specialist Retailers

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Jewellery and Watch Specialist Retailers

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Media Products Stores

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Pet Shops and Superstores

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Sports Goods Stores

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Stationers/Office Supply Stores

No 08.00-21.00hrs

08.00-21.00hrs

08.00-21.00hrs

Closed

Traditional Toys and Games Stores

No 08.00-21.00hrs

08.00-21.00hrs

08.00-21.00hrs

Open

Other Leisure and Personal Goods Specialist Retailers

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Department Stores

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Variety Stores

No 10.00-22.00hrs

10.00-22.00hrs

10.00-22.00hrs

Open

Source: Euromonitor International

Physical Retail Landscape

Regarding heavy traffic in big cities, most consumers typically tend to frequent nearby stores

for daily grocery shopping. On the other hand, occasionally at the weekends, many

consumers are willing to travel longer distances to suburban areas to socialise with friends

and families at giant one-stop shopping centres.

High rent is the most common factor making physical space difficult to obtain for most

retailers. With strong financial resources, big corporations often choose the best and most

expensive locations. Meanwhile, small storeowners are utilising old apartments in central



areas to open new shops in order to save on rental costs. In addition, because of the high rent

in Vietnam, major players such as Mobile World JSC and FPT Corp are shifting to smaller-

sized stores located on main streets to reduce operation costs.

Because Vietnam is a tropical country with extremely high temperatures almost all year round,

most shopping centres are located indoors and equipped with air conditioners to create a

comfortable shopping environment for consumers. The majority of shopping centres in

Vietnam are consolidated properties combining different standalone stores with food courts,

gaming areas and cinemas. Even though these are not the primary shopping destinations for

Vietnamese people, many consumers visit them to socialise with their friends and browse the

stores.

Standalone stores are prevalent in Vietnam partially due to the consumer habit of commuting

by motorbike. Standalone stores conveniently located on main streets make it easy for

consumers to stop by at anytime without having to park their vehicles and walk a decent

distance to the stores.

The travel infrastructure is dominated by private motorbikes and cars rather than public

transportation. Most consumers tend to stop by some stores on the way back home from work

or school, which is turning parking into one of the most important factors affecting sales during

rush hour. A spacious modern garage with the ability to facilitate a large numbers of

motorbikes arriving at the same time will create an enhanced shopping experience for most

customers.

Luxury retailers are located at the best and most expensive locations in city centres in order to

directly target the upper-middle to higher-income segment. Most supermarkets and

hypermarkets are also located in major cities, but at less expensive locations as they seek to

reduce rental costs. Meanwhile, convenience stores are usually located near schools and

public buildings such as hospitals and apartments.

Cash and Carry

Cash and carry is a relatively nascent and consolidated market in Vietnam, with Metro Cash

and Carry as the sole player.

The target consumer segment for cash and carry is companies, restaurants and hotels, as

well as wholesale consumers. In order to shop at Metro, customers must be able to present a

membership card that can only be issued to business owners. There is a trend for people to

borrow membership cards from friends or relatives to ensure a smooth entrance. However,

this group remains the minority and does not contribute significant revenue to Metro.

During the review period, Metro witnessed aggressive competition from major supermarket

and hypermarket operators that introduced low-pricing strategies in a bid to gain share from

the sole cash and carry player in Vietnam. Consequently, some small retailers and companies

are gradually switching from cash and carry to supermarkets and hypermarkets, swayed by

the latter channels’ offer of attractive promotions and their close proximity to residential areas.

With Berli Jacker Public Co Ltd as the new owner of Metro Cash and Carry chain, the market

is witnessing a stronger presence of imported Thai products. Because Berli Jacker Public Co

Ltd originated from Thailand, the company has a potential advantage in terms of connections

with Thai manufacturers to obtain the most competitive prices. Additionally, due to the new

import tax exemption legislation bolstered by the Trans Pacific Partnership Agreement,

products from Thailand can benefit from 0% import tax.

Table 1 Cash and Carry Value Sales: 2010-2015

VND million, current prices



2010 2011 2012 2013 2014 2015 Cash and carry 5,693.3 7,624.6 10,100.2 11,977.6 13,432.6 15,682 % growth 33.9% 32.5% 18.6% 12.1% 7.1% 9.1%

Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Note: Value sales exclude VAT sales tax

Seasonality

Online Autumn Shopping Day

Date: 28 August 2015.

Shopping season: 24 – 27 August 2015.

Primary products bought: Apparel and footwear, electronics and appliances.

Retailer strategy: Most retailers offer Back-to-School themed items because students go back

to school shortly after the shopping event finishes. Urban students comprise the target

demographic of many retailers during this season.

Online Black Friday

Date: 4 December 2015.

Shopping season: 4 December 2015.

Primary products bought: Electronics and appliances, apparel and footwear, health and

beauty care, books and media.

Retailer strategy: Various retailers focus on offering shocking price to compete against each

other to catch consumers’ attention. Many players also utilise this opportunity to foster m-

commerce’s performance by providing special discounts for products purchased on mobile

phones.

Lunar New Year

Date: 19 February 2015.

Shopping season: January – 19 February 2015.

Primary products bought: Lunar New Year themed decoration products, apparel and footwear,

groceries, electronics and appliances.

Retailer strategy: This is considered the biggest and busiest shopping season of the year for

almost all retailing channels. As such, retailers develop Lunar New Year themed items with

attractive discounts and complimentary incentives such as lucky envelopes and sweet treats.

Payments and Delivery

Vietnam remains a cash society in 2015.

High financial card maintenance costs are the main deterring feature preventing card

payments from becoming the mainstream payment method in Vietnam. Additionally, many

retailers do not want to invest in POS machines, as they do not want to be charged by banks

for every trading transaction made in their stores. Even though many banks provide retailers

with free POS devices, some sellers intentionally deceive consumers and state that their

devices are broken to avoid card payments as often as possible.

Mobile payments are becoming increasingly popular among young tech-savvy consumers as

many big retailers offer special discounts for products purchased via mobile phones. lazada



from Recess Retail & Delivery Co Ltd is among the most avant-garde and successful retailers

deploying the mobile shopping method. In 2015, the company launched some attractive

promotions such as special discounts for the first transaction made via the lazada mobile app

and special price offers exclusively applicable for in-app purchases.

Generally, consumers do not have much trust in shipping fragile products with cargo delivery

services in Vietnam due to the lack of responsibility from these service providers. However,

the situation is improving in 2015 with major online retailers focusing on addressing this

particular problem, which has a direct negative impact on internet retailing. As a result, these

players are gaining trust from more consumers, contributing to their remarkable performances

in 2015. In general, most products are delivered to consumers’ doors intact. If customers are

not happy with the product quality, they can return the goods to the retailers within a specific

number of days from the purchase date.

Cash On Delivery (COD) is the main payment method for in-app purchases despite many

consumers’ growing interest in card payment due to its convenience. In general, most

consumers feel safer when they pay upon delivery. By doing so, consumers can make sure

that the ordered products actually meet their expectations.

By the end of the forecast period, COD is expected to remain the most popular payment

method for in-app purchases. As with other channels, cash will retain its prevalence. Unless

banks can lower financial card maintenance fees while increasing card security, non-cash

payment will continue being the inferior option.

Emerging Business Models

Online payment by instalments is becoming an increasingly popular business model in 2015.

Credit card owners from banks associated with online retailers can use their cards to make

online payments with instalment plan benefits without having to submit various financial proof

papers and wait for them to be verified by lending financial companies. Given the model’s

convenience and acceptable interest rates, more consumers are opting for this payment

method, making it the most noticeable business model in 2015.

Even though instalment plans have been available on the market for many years, they are

only just witnessing significant growth in 2015 when credit card owners gain instant access to

this payment method.

3G and the internet’s increasing affordability play an important role in stimulating this

emerging business model’s growth. In addition, smart phones’ unit price is also seeing a

dramatic price plunge as major players introduce many more cheap models in 2015, making

in-app purchases increasingly popular.

Traditional store-based channels seem to be direct competitors for this business model.

However, as they serve different needs from various groups of consumers, they are unlikely

to impose a noticeably negative impact on each other. While online payments by instalments

mainly serve credit card owners who shop online, the traditional payment method in full

amount and by instalment plans is suitable for non-credit card owners.

Digital channels obviously benefit from the business model’s emergence.

MARKET DATA

Table 2 Sales in Retailing by Store-based vs Non-Store: Value 2010-2015

VND tn 2010 2011 2012 2013 2014 2015



Store-based Retailing 946.5 1,169.5 1,333.7 1,528.7 1,741.4 1,888.2 Non-Store Retailing 4.5 7.3 10.6 13.9 17.6 22.5 Retailing 951.0 1,176.8 1,344.3 1,542.6 1,759.0 1,910.7


Table 3 Sales in Retailing by Store-based vs Non-Store: % Value Growth 2010-2015

% current value growth, retail value rsp excl sales tax 2014/15 2010-15 CAGR 2010/15 Total Store-based Retailing 8.4 14.8 99.5 Non-Store Retailing 27.7 38.2 404.8 Retailing 8.6 15.0 100.9


Table 4 Sales in Store-based Retailing by Channel: Value 2010-2015

VND tn 2010 2011 2012 2013 2014 2015 Grocery Retailers 573.5 739.0 917.5 1,094.0 1,262.4 1,371.4 Non-Grocery Specialists 370.6 427.9 413.0 430.7 473.0 509.2 Mixed Retailers 2.4 2.6 3.2 4.0 6.0 7.6 Luxury Retailing - - - 1.9 1.6 2.4 Store-based Retailing 946.5 1,169.5 1,333.7 1,528.7 1,741.4 1,888.2


Note: Luxury retailing not included in store-based retailing total to avoid double counting as luxury retailing is a duplicate category already accounted for within non-grocery specialists and mixed retailers.

Table 5 Store-based Retailing Outlets by Channel: Units 2010-2015

'000 outlets 2010 2011 2012 2013 2014 2015 Grocery Retailers 616.4 621.9 630.1 636.2 642.8 648.9 Non-Grocery Specialists 138.9 142.1 142.7 144.2 146.2 148.2 Mixed Retailers 0.1 0.1 0.1 0.1 0.1 0.1 Luxury Retailing - - - 0.0 0.0 0.0 Store-based Retailing 755.3 764.1 773.0 780.6 789.1 797.3



Table 6 Sales in Store-based Retailing by Channel: % Value Growth 2010-2015

% current value growth, retail value rsp excl sales tax 2014/15 2010-15 CAGR 2010/15 Total



Grocery Retailers 8.6 19.1 139.1 Non-Grocery Specialists 7.7 6.6 37.4 Mixed Retailers 26.9 25.6 212.5 Luxury Retailing 49.1 - - Store-based Retailing 8.4 14.8 99.5



Table 7 Store-based Retailing Outlets by Channel: % Unit Growth 2010-2015

% unit growth 2014/15 2010-15 CAGR 2010/15 Total Grocery Retailers 1.0 1.0 5.3 Non-Grocery Specialists 1.4 1.3 6.7 Mixed Retailers -3.2 8.3 48.8 Luxury Retailing 40.0 - - Store-based Retailing 1.0 1.1 5.5



Table 8 Sales in Non-Store Retailing by Channel: Value 2010-2015

VND tn 2010 2011 2012 2013 2014 2015 Direct Selling 3.4 4.3 5.2 5.9 6.3 6.7 Homeshopping 0.1 0.2 0.4 0.6 0.7 0.8 Internet Retailing 1.0 2.8 4.9 7.4 10.6 15.0 Vending - - - - - - Internet Pure Play - - 0.0 0.1 0.4 0.6 Retailers Mobile Internet Retailing - 0.0 0.1 0.2 1.4 2.3 Non-Store Retailing 4.5 7.3 10.6 13.9 17.6 22.5


Note 1: Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Note 2: Mobile internet retailing and internet pure play retailers not included in non-store retailing total to avoid double counting as these categories are already accounted for within internet retailing.

Table 9 Sales in Non-Store Retailing by Channel: % Value Growth 2010-2015

% current value growth, retail value rsp excl sales tax 2014/15 2010-15 CAGR 2010/15 Total Direct Selling 6.3 14.6 98.0 Homeshopping 11.3 67.3 1,210.1 Internet Retailing 41.6 71.9 1,402.3 Vending - - -



Internet Pure Play Retailers 78.0 - - Mobile Internet Retailing 66.1 - - Non-Store Retailing 27.7 38.2 404.8


Note 1: Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Note 2: Mobile internet retailing and internet pure play retailers not included in non-store retailing total to avoid double counting as these categories are already accounted for within internet retailing.

Table 10 Non-Grocery Specialists: Value Sales, Outlets and Selling Space 2010-2015

2010 2011 2012 2013 2014 2015 Value sales VND tn 370.6 427.9 413.0 430.7 473.0 509.2 Outlets '000 138.9 142.1 142.7 144.2 146.2 148.2 Selling Space mn sq m 10.5 11.4 11.3 11.5 11.8 12.1


Table 11 Sales in Non-Grocery Specialists by Channel: Value 2010-2015

VND tn 2010 2011 2012 2013 2014 2015 Apparel and Footwear 32.8 37.9 35.8 38.9 44.1 48.0 Specialist Retailers Electronics and 96.3 107.8 116.4 124.2 135.0 147.1 Appliance Specialist Retailers Health and Beauty 47.9 55.2 61.6 69.3 77.2 87.5 Specialist Retailers Home and Garden 96.9 115.5 98.8 96.7 106.2 110.6 Specialist Retailers Leisure and Personal 46.5 59.5 49.0 47.3 53.1 58.5 Goods Specialist Retailers Other Non-Grocery 50.2 51.9 51.4 54.4 57.4 57.4 Specialists Non-Grocery Specialists 370.6 427.9 413.0 430.7 473.0 509.2


Table 12 Non-Grocery Specialists Outlets by Channel: Units 2010-2015

'000 outlets 2010 2011 2012 2013 2014 2015 Apparel and Footwear 9.4 9.9 10.1 10.3 10.6 10.9 Specialist Retailers Electronics and 6.6 6.6 6.4 6.6 7.1 7.5 Appliance Specialist Retailers Health and Beauty 38.7 39.6 39.9 40.3 40.8 41.2 Specialist Retailers Home and Garden 10.6 11.5 11.4 11.5 11.6 11.8



Specialist Retailers Leisure and Personal 11.3 12.0 12.3 12.7 13.0 13.5 Goods Specialist Retailers Other Non-Grocery 62.2 62.5 62.7 62.9 63.1 63.3 Specialists Non-Grocery Specialists 138.9 142.1 142.7 144.2 146.2 148.2


Table 13 Sales in Non-Grocery Specialists by Channel: % Value Growth 2010-2015

% current value growth, retail value rsp excl sales tax 2014/15 2010-15 CAGR 2010/15 Total Apparel and Footwear Specialist 8.9 7.9 46.3 Retailers Electronics and Appliance Specialist 8.9 8.8 52.8 Retailers Health and Beauty Specialist Retailers 13.5 12.8 82.7 Home and Garden Specialist Retailers 4.1 2.7 14.2 Leisure and Personal Goods Specialist 10.3 4.7 25.9 Retailers Other Non-Grocery Specialists 0.1 2.7 14.4 Non-Grocery Specialists 7.7 6.6 37.4


Table 14 Non-Grocery Specialists Outlets by Channel: % Unit Growth 2010-2015

% unit growth 2014/15 2010-15 CAGR 2010/15 Total Apparel and Footwear Specialist 2.4 3.1 16.2 Retailers Electronics and Appliance Specialist 5.2 2.3 12.3 Retailers Health and Beauty Specialist Retailers 1.2 1.3 6.6 Home and Garden Specialist Retailers 1.6 2.2 11.4 Leisure and Personal Goods Specialist 3.8 3.5 19.0 Retailers Other Non-Grocery Specialists 0.3 0.4 1.8 Non-Grocery Specialists 1.4 1.3 6.7


Table 15 Retailing GBO Company Shares: % Value 2011-2015

% retail value rsp excl sales tax Company 2011 2012 2013 2014 2015 Saigon Union of Trading 1.4 1.4 1.4 1.4 1.4 Cooperatives Casino Guichard- 0.7 0.7 0.8 1.1 1.1



Perrachon SA Mobile World JSC 0.5 0.7 0.7 0.9 1.1 Nguyen Kim Trading JSC 0.5 0.5 0.5 0.6 0.6 Saigon Jewelry Co Ltd 1.7 1.0 0.7 0.5 0.5 FPT Corp 0.1 0.1 0.2 0.3 0.4 Phu Nhuan Jewelry JSC 1.2 0.5 0.3 0.3 0.3 Vien Thong A Import 0.2 0.1 0.2 0.2 0.3 Export Trading Production Corp Pico JSC 0.2 0.2 0.2 0.2 0.2 Lotte Group 0.1 0.1 0.1 0.1 0.2 Tran Anh Digital World 0.1 0.1 0.1 0.1 0.2 JSC AEON Group - - - 0.1 0.2 VinPro - - - - 0.2 Ho Chi Minh City Book 0.1 0.1 0.1 0.1 0.1 Distribution Co Parkson Holdings Bhd 0.2 0.2 0.2 0.1 0.1 TCT Group 0.1 0.1 0.1 0.1 0.1 Vietnam National 0.1 0.1 0.1 0.1 0.1 Textile & Garment Corp (VINATEX) DOJI Gold & Gems Group 0.1 0.1 0.1 0.1 0.1 Best Denki Co Ltd 0.1 - - - - G7 Trading & Service Co 0.0 - - - - Ltd Others 92.5 93.9 94.1 93.5 92.7 Total 100.0 100.0 100.0 100.0 100.0


Table 16 Retailing GBN Brand Shares: % Value 2012-2015

% retail value rsp excl sales tax Brand Company (GBO) 2012 2013 2014 2015 Co.opMart Saigon Union of Trading 1.4 1.3 1.2 1.2 Cooperatives Big C Casino Guichard- 0.7 0.8 1.1 1.1 Perrachon SA Mobile world Mobile World JSC 0.6 0.6 0.8 0.9 Nguyenkim - Saigon Nguyen Kim Trading JSC 0.5 0.5 0.6 0.6 Shopping Center SJC Saigon Jewelry Co Ltd 1.0 0.7 0.5 0.5 FPT Shop FPT Corp 0.1 0.2 0.3 0.4 PNJ Phu Nhuan Jewelry JSC 0.5 0.3 0.3 0.3 Vien Thong A Vien Thong A Import 0.1 0.2 0.2 0.3 Export Trading Production Corp Pico Pico JSC 0.2 0.2 0.2 0.2 Tran Anh Tran Anh Digital World JSC 0.1 0.1 0.1 0.2 Aeon Mall AEON Group - - 0.1 0.2 Lotte Mart Lotte Group 0.1 0.1 0.1 0.2 Blue Electronics Mobile World JSC - - - 0.2 Fahasa Ho Chi Minh City Book 0.1 0.1 0.1 0.1 Distribution Co Parkson Parkson Holdings Bhd 0.2 0.2 0.1 0.1 Fivimart TCT Group 0.1 0.1 0.1 0.1 VinMart VinPro - - - 0.1



Doji DOJI Gold & Gems Group 0.1 0.1 0.1 0.1 Electronic World Mobile World JSC 0.1 0.1 0.1 - Best Carings Best Denki Co Ltd - - - - Others 94.2 94.4 93.8 93.1 Total 100.0 100.0 100.0 100.0


Table 17 Store-based Retailing GBO Company Shares: % Value 2011-2015

% retail value rsp excl sales tax Company 2011 2012 2013 2014 2015 Saigon Union of Trading 1.4 1.5 1.4 1.4 1.4 Cooperatives Casino Guichard- 0.7 0.7 0.9 1.1 1.1 Perrachon SA Mobile World JSC 0.5 0.7 0.6 0.9 1.0 Nguyen Kim Trading JSC 0.5 0.5 0.5 0.6 0.6 Saigon Jewelry Co Ltd 1.8 1.0 0.7 0.5 0.5 FPT Corp 0.1 0.1 0.2 0.3 0.4 Phu Nhuan Jewelry JSC 1.2 0.5 0.3 0.3 0.3 Vien Thong A Import 0.2 0.1 0.2 0.2 0.2 Export Trading Production Corp Pico JSC 0.2 0.2 0.2 0.2 0.2 Lotte Group 0.1 0.1 0.1 0.1 0.2 Tran Anh Digital World 0.1 0.1 0.1 0.1 0.2 JSC AEON Group - - - 0.1 0.2 VinPro - - - - 0.2 Ho Chi Minh City Book 0.1 0.1 0.1 0.1 0.1 Distribution Co Parkson Holdings Bhd 0.2 0.2 0.2 0.1 0.1 TCT Group 0.1 0.1 0.1 0.1 0.1 Vietnam National 0.1 0.1 0.1 0.1 0.1 Textile & Garment Corp (VINATEX) DOJI Gold & Gems Group 0.1 0.1 0.1 0.1 0.1 Dong Hung Co Ltd 0.0 0.0 0.0 0.0 0.0 Best Denki Co Ltd 0.1 - - - - Others 92.5 93.9 94.1 93.6 92.8 Total 100.0 100.0 100.0 100.0 100.0


Table 18 Store-based Retailing GBN Brand Shares: % Value 2012-2015

% retail value rsp excl sales tax Brand Company (GBO) 2012 2013 2014 2015 Co.opMart Saigon Union of Trading 1.4 1.3 1.2 1.2 Cooperatives Big C Casino Guichard- 0.7 0.8 1.1 1.1 Perrachon SA Mobile world Mobile World JSC 0.5 0.5 0.8 0.9 Nguyenkim - Saigon Nguyen Kim Trading JSC 0.5 0.5 0.6 0.6



Shopping Center SJC Saigon Jewelry Co Ltd 1.0 0.7 0.5 0.5 FPT Shop FPT Corp 0.1 0.2 0.3 0.4 PNJ Phu Nhuan Jewelry JSC 0.5 0.3 0.3 0.3 Vien Thong A Vien Thong A Import 0.1 0.2 0.2 0.2 Export Trading Production Corp Pico Pico JSC 0.2 0.2 0.2 0.2 Tran Anh Tran Anh Digital World JSC 0.1 0.1 0.1 0.2 Aeon Mall AEON Group - - 0.1 0.2 Lotte Mart Lotte Group 0.1 0.1 0.1 0.2 Blue Electronics Mobile World JSC - - - 0.2 Fahasa Ho Chi Minh City Book 0.1 0.1 0.1 0.1 Distribution Co Parkson Parkson Holdings Bhd 0.2 0.2 0.1 0.1 Fivimart TCT Group 0.1 0.1 0.1 0.1 VinMart VinPro - - - 0.1 Doji DOJI Gold & Gems Group 0.1 0.1 0.1 0.1 Viet Tien Vietnam National 0.1 0.1 0.1 0.1 Textile & Garment Corp (VINATEX) Citimart Dong Hung Co Ltd 0.0 0.0 0.0 0.0 Electronic World Mobile World JSC 0.1 0.1 0.1 - Others 94.1 94.3 93.8 93.1 Total 100.0 100.0 100.0 100.0


Table 19 Store-based Retailing LBN Brand Shares: Outlets 2012-2015

sites/outlets Brand (GBO) Company (NBO) 2012 2013 2014 2015 Viet Tien (Vietnam Viet Tien Garment JSC 504 502 502 496 National Textile & Garment Corp (VINATEX)) Mobile world Mobile World JSC 207 220 330 473 FPT Shop FPT Corp 39 100 160 250 PNJ Phu Nhuan Jewelry JSC 153 145 174 178 Vien Thong A Vien Thong A Import 78 92 126 153 Export Trading Production Corp SJC Saigon Jewelry Co Ltd 175 158 132 135 Co.opMart Saigon Union of Trading 62 68 74 80 Cooperatives Fahasa Ho Chi Minh City Book 58 58 59 70 Distribution Co Doji DOJI Gold & Gems Group 24 35 35 33 Blue Electronics Mobile World JSC - - - 33 Big C Casino Guichard- 21 25 28 31 Perrachon SA Citimart (Dong Hung Dong Hung Trading 17 17 18 28 Co Ltd) Service Co Ltd Nguyenkim - Saigon Nguyen Kim Trading JSC 17 18 22 24 Shopping Center Fivimart TCT Group 16 16 15 21 Tran Anh Tran Anh Digital World JSC 4 9 11 19 VinMart VinPro - - - 16



Lotte Mart (Lotte Lotte Shopping Co Ltd 3 5 7 10 Group) Parkson (Parkson Lion Group, The 8 8 8 8 Holdings Bhd) Pico Pico JSC 5 5 4 6 Aeon Mall (AEON Aeon Vietnam Co Ltd - - 4 6 Group) Electronic World Mobile World JSC 12 12 22 - Others Others 771,575 779,061 787,376 795,183 Total Total 772,978 780,554 789,107 797,253


Table 20 Non-Store Retailing GBO Company Shares: % Value 2011-2015

% retail value rsp excl sales tax Company 2011 2012 2013 2014 2015 Mobile World JSC 5.5 5.4 5.3 5.4 6.7 Amway Corp 15.6 12.5 10.8 7.8 6.4 Rocket Internet GmbH - 0.1 0.7 3.6 6.2 Morinda Holdings Inc 5.3 4.6 3.8 3.6 3.6 FPT Corp - 0.0 0.2 1.9 3.6 Forever Living Products 9.7 8.4 6.8 4.7 3.2 International LLC Nguyen Kim Trading JSC 2.1 2.5 2.5 2.8 2.9 Tiens Group Co Ltd 3.9 2.9 2.6 2.3 2.2 Vien Thong A Import 1.0 1.8 2.3 2.3 2.1 Export Trading Production Corp Oriflame Cosmetics SA 5.4 3.2 2.5 1.7 1.3 Pico JSC 1.4 1.2 1.2 1.2 1.1 bHIP Global 0.1 0.3 1.0 1.1 1.1 Herbalife Ltd 2.0 1.6 1.5 1.3 0.9 Sophie Martin Indonesia 1.6 1.2 0.8 0.5 0.5 PT Nu Skin Enterprises Inc - 0.2 0.3 0.2 0.1 Avon Products Inc 2.8 1.8 0.4 - - Savico Automatic Retail - - - - - & Service Co Ltd ESQ Co Ltd - - - - - Others 43.6 52.3 57.2 59.7 58.1 Total 100.0 100.0 100.0 100.0 100.0


Note: Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 21 Non-Store Retailing GBN Brand Shares: % Value 2012-2015

% retail value rsp excl sales tax Brand Company (GBO) 2012 2013 2014 2015 Mobile world Mobile World JSC 5.4 5.3 5.4 6.7 Amway Amway Corp 12.5 10.8 7.8 6.4 3rd Party Merchants Rocket Internet GmbH 0.0 0.2 2.6 5.0 Tahitian Noni Morinda Holdings Inc 4.6 3.8 3.6 3.6



FPT Shop FPT Corp 0.0 0.2 1.9 3.6 Forever Living Forever Living Products 8.4 6.8 4.7 3.2 International LLC Nguyenkim - Saigon Nguyen Kim Trading JSC 2.5 2.5 2.8 2.9 Shopping Center Tiens Tiens Group Co Ltd 2.9 2.6 2.3 2.2 Vien Thong A Vien Thong A Import 1.8 2.3 2.3 2.1 Export Trading Production Corp Oriflame Oriflame Cosmetics SA 3.2 2.5 1.7 1.3 Pico Pico JSC 1.2 1.2 1.2 1.1 bHIP bHIP Global 0.3 1.0 1.1 1.1 lazada Rocket Internet GmbH 0.0 0.4 0.9 1.0 Herbalife Herbalife Ltd 1.6 1.5 1.3 0.9 Sophie Paris Sophie Martin Indonesia PT 1.2 0.8 0.5 0.5 Zalora Rocket Internet GmbH 0.0 0.0 0.1 0.2 Nu Skin Nu Skin Enterprises Inc 0.2 0.3 0.2 0.1 Avon Avon Products Inc 1.8 0.4 - - ESQ ESQ Co Ltd - - - - Savico Savico Automatic Retail - - - - & Service Co Ltd Others 52.3 57.2 59.7 58.1 Total 100.0 100.0 100.0 100.0


Note: Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 22 Non-Grocery Specialists GBO Company Shares: % Value 2011-2015

% retail value rsp excl sales tax Company 2011 2012 2013 2014 2015 Mobile World JSC 1.4 2.1 2.3 3.3 3.9 Nguyen Kim Trading JSC 1.3 1.6 1.8 2.1 2.2 Saigon Jewelry Co Ltd 4.8 3.2 2.4 1.9 1.9 FPT Corp 0.2 0.3 0.7 1.0 1.4 Phu Nhuan Jewelry JSC 3.4 1.6 1.2 1.2 1.2 Vien Thong A Import 0.6 0.4 0.6 0.7 0.9 Export Trading Production Corp Pico JSC 0.7 0.7 0.8 0.6 0.8 Tran Anh Digital World 0.4 0.4 0.5 0.5 0.8 JSC Ho Chi Minh City Book 0.3 0.4 0.4 0.4 0.5 Distribution Co Vietnam National 0.3 0.4 0.4 0.4 0.4 Textile & Garment Corp (VINATEX) DOJI Gold & Gems Group 0.2 0.3 0.4 0.4 0.4 Medicare Co Ltd 0.1 0.1 0.1 0.1 0.3 Dairy Farm 0.0 0.1 0.2 0.2 0.2 International Holdings Ltd VinPro - - - - 0.2 Shiseido Co Ltd 0.1 0.1 0.1 0.1 0.2 Bblue Co Ltd 0.1 0.1 0.1 0.1 0.1 Estée Lauder Cos Inc 0.0 0.1 0.1 0.1 0.1 LG Household & Health 0.1 0.1 0.1 0.1 0.1



Care Ltd AA Corp 0.2 0.1 0.1 0.1 0.1 LVMH Moët Hennessy 0.1 0.1 0.1 0.1 0.1 Louis Vuitton SA Best Denki Co Ltd 0.2 - - - - Others 85.5 87.8 87.8 86.6 84.3 Total 100.0 100.0 100.0 100.0 100.0


Table 23 Non-Grocery Specialists GBN Brand Shares: % Value 2012-2015

% retail value rsp excl sales tax Brand Company (GBO) 2012 2013 2014 2015 Mobile world Mobile World JSC 1.7 1.9 2.8 3.2 Nguyenkim - Saigon Nguyen Kim Trading JSC 1.6 1.8 2.1 2.2 Shopping Center SJC Saigon Jewelry Co Ltd 3.2 2.4 1.9 1.9 FPT Shop FPT Corp 0.3 0.7 1.0 1.4 PNJ Phu Nhuan Jewelry JSC 1.6 1.2 1.2 1.2 Vien Thong A Vien Thong A Import 0.4 0.6 0.7 0.9 Export Trading Production Corp Pico Pico JSC 0.7 0.8 0.6 0.8 Tran Anh Tran Anh Digital World JSC 0.4 0.5 0.5 0.8 Blue Electronics Mobile World JSC - - - 0.6 Fahasa Ho Chi Minh City Book 0.4 0.4 0.4 0.5 Distribution Co Doji DOJI Gold & Gems Group 0.3 0.4 0.4 0.4 Medicare Medicare Co Ltd 0.1 0.1 0.1 0.3 Guardian Dairy Farm 0.1 0.2 0.2 0.2 International Holdings Ltd VinPro - - - 0.2 Viet Tien Vietnam National 0.2 0.2 0.2 0.2 Textile & Garment Corp (VINATEX) Vinatex Vietnam National 0.2 0.2 0.2 0.2 Textile & Garment Corp (VINATEX) Shiseido Shiseido Co Ltd 0.1 0.1 0.1 0.2 Blue Exchange Bblue Co Ltd 0.1 0.1 0.1 0.1 adidas adidas Group 0.0 0.1 0.1 0.1 Gia Thanh Trading G T Co Ltd 0.1 0.1 0.1 0.1 Electronic World Mobile World JSC 0.4 0.4 0.5 - Others 88.0 88.0 86.8 84.6 Total 100.0 100.0 100.0 100.0


Table 24 Non-Grocery Specialists LBN Brand Shares: Outlets 2012-2015

sites/outlets Brand (GBO) Company (NBO) 2012 2013 2014 2015 Viet Tien (Vietnam Viet Tien Garment JSC 504 502 502 496 National Textile &



Garment Corp (VINATEX)) Mobile world Mobile World JSC 207 220 330 473 FPT Shop FPT Corp 39 100 160 250 PNJ Phu Nhuan Jewelry JSC 153 145 174 178 Blue Exchange Bblue Co Ltd 171 173 175 176 Vien Thong A Vien Thong A Import 78 92 126 153 Export Trading Production Corp Nha Be Nha Be Corp 157 169 166 138 SJC Saigon Jewelry Co Ltd 175 158 132 135 Pierre Cardin An Phuoc Garment Co Ltd 89 90 91 101 (Pierre Cardin SA) adidas (adidas Group) adidas Vietnam Co Ltd 43 45 47 96 Vinatex Vietnam National 72 72 72 72 Textile & Garment Corp (VINATEX) Fahasa Ho Chi Minh City Book 58 58 59 70 Distribution Co Ninomaxx Viet Fashion Co Ltd 73 73 73 64 VinPro VinPro - - - 40 Medicare Medicare Co Ltd 10 14 14 34 Doji DOJI Gold & Gems Group 24 35 35 33 Blue Electronics Mobile World JSC - - - 33 Guardian (Dairy Giant South Asia 9 18 25 31 Farm International (Vietnam) Ltd Holdings Ltd) Nguyenkim - Saigon Nguyen Kim Trading JSC 17 18 22 24 Shopping Center Shiseido (Shiseido Shiseido Cosmetics 15 15 15 22 Co Ltd) Vietnam Co Ltd Others Others 140,852 142,209 144,012 145,592 Total Total 142,746 144,206 146,230 148,211


Table 25 Non-Grocery Specialists LBN Brand Shares: Selling Space 2012-2015

selling space '000 sq m Brand (GBO) Company (NBO) 2012 2013 2014 2015 Viet Tien (Vietnam Viet Tien Garment JSC 71.2 70.5 70.5 69.7 National Textile & Garment Corp (VINATEX)) Mobile world Mobile World JSC 29.4 31.2 46.8 62.5 Nguyenkim - Saigon Nguyen Kim Trading JSC 38.3 40.1 44.9 51.0 Shopping Center Blue Electronics Mobile World JSC - - - 43.9 Medicare Medicare Co Ltd 12.1 16.6 16.6 33.5 Guardian (Dairy Giant South Asia 11.1 21.7 30.1 31.0 Farm International (Vietnam) Ltd Holdings Ltd) Vien Thong A Vien Thong A Import 15.6 18.6 25.3 30.7 Export Trading Production Corp PNJ Phu Nhuan Jewelry JSC 26.6 24.4 29.2 29.9 Nha Be Nha Be Corp 28.7 30.2 30.0 28.2 Pico Pico JSC 20.5 20.5 16.5 24.7



FPT Shop FPT Corp 10.1 10.9 17.4 23.4 Tran Anh Tran Anh Digital World JSC 4.2 8.2 9.4 16.3 Fahasa Ho Chi Minh City Book 12.9 12.9 13.3 15.8 Distribution Co Blue Exchange Bblue Co Ltd 15.4 15.6 15.6 15.6 SJC Saigon Jewelry Co Ltd 18.0 15.7 13.4 13.7 Ninomaxx Viet Fashion Co Ltd 13.5 13.5 13.5 11.8 Nha Xinh AA Corp 8.2 10.6 12.4 10.6 adidas (adidas Group) adidas Vietnam Co Ltd 4.4 4.6 4.9 10.0 Vinatex Vietnam National 9.6 9.6 9.6 9.6 Textile & Garment Corp (VINATEX) VinPro VinPro - - - 9.3 Electronic World Mobile World JSC 10.2 10.2 18.7 - Others Others 10,986.6 11,154.9 11,344.5 11,511.0 Total Total 11,346.7 11,540.6 11,782.6 12,052.1


Table 26 Forecast Sales in Retailing by Store-based vs Non-Store: Value 2015-2020

VND tn 2015 2016 2017 2018 2019 2020 Store-based Retailing 1,888.2 1,989.0 2,085.9 2,179.5 2,268.6 2,354.3 Non-Store Retailing 22.5 28.4 34.8 41.3 48.1 55.4 Retailing 1,910.7 2,017.3 2,120.8 2,220.7 2,316.7 2,409.7

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Note: Forecast value data in constant terms.

Table 27 Forecast Sales in Retailing by Store-based vs Non-Store: % Value Growth 2015-2020

% constant value growth, retail value rsp excl sales tax 2015/2016 2015-20 CAGR 2015/20 TOTAL Store-based Retailing 5.3 4.5 24.7 Non-Store Retailing 26.1 19.7 146.1 Retailing 5.6 4.7 26.1



Table 28 Forecast Sales in Store-based Retailing by Channel: Value 2015-2020

VND tn 2015 2016 2017 2018 2019 2020 Grocery Retailers 1,371.4 1,447.8 1,517.9 1,580.6 1,634.3 1,679.5 Non-Grocery Specialists 509.2 532.7 558.6 588.6 623.0 662.8 Mixed Retailers 7.6 8.5 9.4 10.3 11.2 12.0 Luxury Retailing 2.4 - - - - - Store-based Retailing 1,888.2 1,989.0 2,085.9 2,179.5 2,268.6 2,354.3




Note 1: Forecast value data in constant terms. Note 2: Luxury retailing not included in store-based retailing total to avoid double counting as luxury retailing is a

duplicate category already accounted for within non-grocery specialists and mixed retailers. Note 3: No forecast data available for luxury retailing.

Table 29 Forecast Store-based Retailing Outlets by Channel: Units 2015-2020

'000 outlets 2015 2016 2017 2018 2019 2020 Grocery Retailers 648.9 654.2 658.7 662.6 665.9 668.7 Non-Grocery Specialists 148.2 150.2 152.3 154.5 156.9 159.5 Mixed Retailers 0.1 0.1 0.1 0.1 0.1 0.1 Luxury Retailing 0.0 - - - - - Store-based Retailing 797.3 804.4 811.1 817.2 823.0 828.3


Note 1: Luxury retailing not included in store-based retailing total to avoid double counting as luxury retailing is a duplicate category already accounted for within non-grocery specialists and mixed retailers.

Note 2: No forecast data available for luxury retailing.

Table 30 Forecast Sales in Store-based Retailing by Channel: % Value Growth 2015-2020

% constant value growth, retail value rsp excl sales tax 2015/2016 2015-20 CAGR 2015/20 TOTAL Grocery Retailers 5.6 4.1 22.5 Non-Grocery Specialists 4.6 5.4 30.2 Mixed Retailers 11.8 9.5 57.6 Luxury Retailing - - - Store-based Retailing 5.3 4.5 24.7


Note 1: Forecast value data in constant terms. Note 2: Luxury retailing not included in store-based retailing total to avoid double counting as luxury retailing is a

duplicate category already accounted for within non-grocery specialists and mixed retailers. Note 3: No forecast data available for luxury retailing.

Table 31 Forecast Store-Based Retailing Outlets by Channel: % Unit Growth 2015-2020

% unit growth 2015/16 2015-20 CAGR 2015/20 Total Grocery Retailers 0.8 0.6 3.0 Non-Grocery Specialists 1.3 1.5 7.6 Mixed Retailers -1.6 0.0 0.0 Luxury Retailing - - - Store-based Retailing 0.9 0.8 3.9


Note 1: Luxury retailing not included in store-based retailing total to avoid double counting as luxury retailing is a duplicate category already accounted for within non-grocery specialists and mixed retailers.

Note 2: No forecast data available for luxury retailing.



Table 32 Forecast Sales in Non-Store Retailing by Channel: Value 2015-2020

VND tn 2015 2016 2017 2018 2019 2020 Direct Selling 6.7 7.0 7.3 7.5 7.8 7.9 Homeshopping 0.8 0.8 0.9 0.9 1.0 1.0 Internet Retailing 15.0 20.5 26.7 32.8 39.4 46.5 Vending - - - - - - Internet Pure Play 0.6 - - - - - Retailers Mobile Internet Retailing 2.3 3.6 5.3 7.2 8.8 11.3 Non-Store Retailing 22.5 28.4 34.8 41.3 48.1 55.4


Note 1: Forecast value data in constant terms. Note 2: Vending data captures vending systems installed in public and semi-captive environments only. For

further details refer to definitions. Note 3: Mobile internet retailing and internet pure play retailers not included in non-store retailing total to avoid

double counting as these categories are already accounted for within internet retailing. Note 4: No forecast data available for internet pure play retailers.

Table 33 Forecast Sales in Non-Store Retailing by Channel: % Value Growth 2015-2020

% constant value growth, retail value rsp excl sales tax 2015/2016 2015-20 CAGR 2015/20 TOTAL Direct Selling 4.0 3.3 17.7 Homeshopping 7.5 4.5 24.5 Internet Retailing 37.0 25.4 210.2 Vending - - - Internet Pure Play Retailers - - - Mobile Internet Retailing 57.2 37.6 393.3 Non-Store Retailing 26.1 19.7 146.1


Note 1: Forecast value data in constant terms. Note 2: Vending data captures vending systems installed in public and semi-captive environments only. For

further details refer to definitions. Note 3: Mobile internet retailing and internet pure play retailers not included in non-store retailing total to avoid

double counting as these categories are already accounted for within internet retailing. Note 4: No forecast data available for internet pure play retailers.

Table 34 Non-Grocery Specialists Forecasts: Value Sales, Outlets and Selling Space 2015-2020

2015 2016 2017 2018 2019 2020 Value sales VND tn 509.2 532.7 558.6 588.6 623.0 662.8 Outlets '000 148.2 150.2 152.3 154.5 156.9 159.5 Selling Space mn sq m 12.1 12.3 12.6 12.9 13.3 13.6





Table 35 Forecast Sales in Non-Grocery Specialists by Channel: Value 2015-2020

VND tn 2015 2016 2017 2018 2019 2020 Apparel and Footwear 48.0 51.5 55.4 59.7 64.7 70.3 Specialist Retailers Electronics and 147.1 155.5 164.7 175.7 188.6 203.8 Appliance Specialist Retailers Health and Beauty 87.5 94.1 100.2 106.2 111.9 117.4 Specialist Retailers Home and Garden 110.6 113.8 118.4 124.5 132.3 142.0 Specialist Retailers Leisure and Personal 58.5 61.7 65.4 69.8 74.9 80.9 Goods Specialist Retailers Other Non-Grocery 57.4 56.1 54.5 52.7 50.6 48.4 Specialists Non-Grocery Specialists 509.2 532.7 558.6 588.6 623.0 662.8



Table 36 Forecast Non-Grocery Specialists Outlets by Channel: Units 2015-2020

'000 outlets 2015 2016 2017 2018 2019 2020 Apparel and Footwear 10.9 11.2 11.7 12.2 12.8 13.5 Specialist Retailers Electronics and 7.5 7.9 8.3 8.8 9.3 9.8 Appliance Specialist Retailers Health and Beauty 41.2 41.7 42.2 42.7 43.2 43.7 Specialist Retailers Home and Garden 11.8 12.1 12.3 12.6 12.9 13.3 Specialist Retailers Leisure and Personal 13.5 13.8 14.2 14.5 14.8 15.2 Goods Specialist Retailers Other Non-Grocery 63.3 63.4 63.6 63.7 63.9 64.0 Specialists Non-Grocery Specialists 148.2 150.2 152.3 154.5 156.9 159.5


Table 37 Forecast Sales in Non-Grocery Specialists by Channel: % Value Growth 2015-2020

% constant value growth, retail value rsp excl sales tax 2015/2016 2015-20 CAGR 2015/20 TOTAL



Apparel and Footwear Specialist 7.2 7.9 46.4 Retailers Electronics and Appliance Specialist 5.7 6.7 38.6 Retailers Health and Beauty Specialist Retailers 7.5 6.0 34.0 Home and Garden Specialist Retailers 2.9 5.1 28.4 Leisure and Personal Goods Specialist 5.4 6.7 38.3 Retailers Other Non-Grocery Specialists -2.3 -3.4 -15.8 Non-Grocery Specialists 4.6 5.4 30.2



Table 38 Forecast Non-Grocery Specialists Outlets by Channel: % Unit Growth 2015-2020

% unit growth 2015/16 2015-20 CAGR 2015/20 Total Apparel and Footwear Specialist 3.1 4.4 24.0 Retailers Electronics and Appliance Specialist 5.3 5.6 31.6 Retailers Health and Beauty Specialist Retailers 1.2 1.2 5.9 Home and Garden Specialist Retailers 1.9 2.4 12.5 Leisure and Personal Goods Specialist 2.3 2.4 12.7 Retailers Other Non-Grocery Specialists 0.3 0.2 1.1 Non-Grocery Specialists 1.3 1.5 7.6


DEFINITIONS This report analyses the market for retailing in Vietnam. For the purposes of the study, the

market has been defined as follows:

Store-based Retailing

Grocery retailers

Modern grocery retailers

Convenience stores

Discounters

Forecourt retailers: chained forecourt retailers; independent forecourt retailers

Hypermarkets

Supermarkets

Traditional grocery retailers

Independent small grocers

Food/drink/tobacco specialists

Other grocery retailers



Non-grocery retailers

Apparel specialist retailers

Electronics and appliance specialist retailers

Health and beauty specialist retailers

Chemists/pharmacies

Drugstores/parapharmacies

Beauty specialist retailers

Other healthcare specialist retailers

Home and garden specialist retailers

Furniture and homewares stores

Home improvement and gardening stores

Leisure and personal goods specialist retailers

Jewellery and watch specialist retailers

Media products stores

Pet shops and superstores

Sports goods stores

Stationers/office supply stores

Traditional toys and games stores

Other leisure and personal goods specialist retailers

Mixed retailers

Department stores

Variety stores

Mass merchandisers

Warehouse clubs

Other non-grocery retailers

Non-store Retailing

Vending

Homeshopping

Internet retailing

Direct selling

Explanations of words and/or terminology used in this report are as follows:

GBO refers to global brand owner, which is the ultimate owner of a brand.

NBO refers to national brand owner, which is the company licensed to distribute a brand on

behalf of a GBO. The NBO may be a subsidiary of a GBO or it may be a completely separate

company. Share tables at both GBO and at NBO level are provided in the report. Reference

to shares in the report analysis is at NBO level.

SOURCES Sources used during the research included the following:

Summary 2 Research Sources

Official Sources Agro Info

American Chamber of Commerce in Vietnam



Department of Animal Health of Vietnam

General Department of Vietnam Custom

General Statistics Office of Vietnam

Hanoi Department of Trade

Ho Chi Minh Department of Trade

Investment & Trade Promotion Centre (ITPC)

Ministry of Health of Vietnam (MOH)

Ministry of Trade (MOT)

Trade Associations Association of Vietnam Retailers

Hanoi Supermarket Association

Retailing Association of Vietnam

Vietnam Agriculture Portal

Vietnam Association of Retailing

Vietnam E-Commerce & Information Technology Agency

Vietnam Multi-Level Marketing Association

Trade Press Binh Duong Newspaper

Dan Tri Newspaper

Direct Selling News

Doanh Nghiep

Economics & Development

Elle Vietnam

Embassy of Denmark, Vietnam

Enterprise Forum newspaper

Ho Chi Minh City Law News

Ho Chi Minh City People's Committee

Hue City

Industry & Commerce Newspapaer

International Herald Tribune

Landtoday

New Hanoi

People Newspapaer

People's Police

Portal of Vietnam High Quality Goods

Press

Sai Gon Marketing

Saigon Marketing

Saigon Times Daily

Saigon Times Online



Saigoneer

SGTT

TBIC - Trade & Business Information Centre

Thanh Nien News

The Saigon Times

The World & Vietnam Report

Thehetre.vn

Trading Market

Tuoi Tre Online

Vietnam Branding

Vietnam Express

Vietnam Investment Review

Vietnam Net

Vietnam News

Vietnam Newspaper

Vietnamnet

Vn Business News

VN Economy

VN Media

VnEconomy

Vnexpress.net

VTC news

Women Online

Source: Euromonitor International