Industry Trend Analysis - High F&D Expenditure Attracting Foreign Convenience Stores - MAR 2018
BMI View: Rising levels of disposable income and a large millennial consumer base that demands greater accessibility are prompting the entry and expansion of international convenience store brands in to Vietnam. One of the leading South Korean convenience store companies, GS Retail, is the latest to follow this trend, opening its first store in Ho Chi Minh City in January 2018. Increased spending on food and drink, as well as an expanding urban population will continue to attract more grocery chains to the market.
On the back of rising disposable incomes and growing demand for the convenience store format in Vietnam, one of South Korea's leading convenience store companies, GS Retail, is launching its first stores in Ho Chi Minh City. GS Retail has partnered with Son Kim Land, the property arm of Son Kim Group, to set up a joint venture called GS25 Vietnam to bring the South Korean GS25 convenience stores to Vietnam. GS25 Vietnam is scheduled to open four outlets in January 2018 in Ho Chi Minh City before opening 50 more stores later in 2018. It then plans to expand to Hanoi by 2020.
Vietnam is one of the outperforming emerging markets in Asia, with consumer spending forecast to grow by an average 7.2% annually over 2018 and 2022 in real terms. In particular, food and non-alcoholic drinks spending will be the main driver of this as it accounts for the majority of consumer spending, at 20.4% in 2022. We project food and non-alcoholic drinks spending to reach VND981.6trn (USD40.9bn) in 2022, up from VND628trn (USD27.3bn) in 2018.
|F&D Spending Remains Robust|
|Food And Non-Alcoholic Drinks Spending, VNDbn|
|e/f= BMI estimate/ forecast. Source: BMI/National Statistics|