Vietnam's retail and consumer sector might be booming, but only a few top Vietnamese corporations leverage their potential by using impressive and targeted strategies that can take this opportunity to achieve their achievement.
Vietnam's Consumer-retail industry outlook
The fast-moving consumer goods (FMCG) sector and its demand are forecast to recover highly in the second half of 2022 after two consecutive years of decline by COVID-19. As a result, total retail sales are estimated at VND 3.2 quadrillion, in the first seven months of the year, up 16 percent compared to last year. Then many top Vietnamese corporations will benefit from Vietnam's consumption growth.
Although Vietnam is not spared from the global inflation spike context, in 2022, consumer price inflation will also increase, averaging 3.7% over the year (compared to the annual average of 2.6% from 2015-2019). Still, it will remain significantly below the rate of disposable income growth of 9.7% y-o-y. Moreover, this inflation will continue in 2023, with the trend of household disposable income outpacing inflation maintained throughout our forecast period to 2026. As a result, consumers in Vietnam will see their disposable incomes increasing. Subsequently, real growth in consumer income levels will lead to their propensity to spend rising. This is an ideal opportunity for consumer businesses, especially top Vietnamese corporations, to accelerate.
The potential of Vietnam's retail sector makes the industry fertile ground for top Vietnamese corporation
According to Kantar Worldpanel Vietnam, a rising affluent class, more nuclear families, the successful development of digital technology, and increasing demand for personalization among consumers will offer opportunities and challenges for consumers' small companies and top Vietnamese corporations in the coming years.
The potential of Vietnam's retail sector makes the industry fertile ground for top Vietnamese corporations with well-organized development strategies for large-scale consumers. Among these corporations is Masan Group.In 2021, Masan became the top Vietnamese corporation in retail-consumer, with the most potent market capitalization (above VND177 trillion or USD7.78 billion). In that year, Masan achieved many outstanding results, including but not limited to revenue growth, profit growth, business model innovation, and retail expansion. Masan understood that its most significant asset is a large customer base with millions of daily transactions. So, applying technologies is the best way to solve unmet needs and bring outstanding consumer benefits.
After acquiring supermarket chains WinMart and WinMart+, Masan introduced significant changes in their customer approaches. Since mid-2021, Masan has been offering add-on services inside WinMart+ minimarkets, such as Phuc Long kiosks, Reddi telecom stalls, pharmacy kiosks, and Techcombank financial services.
Top Vietnamese corporation on the journey to serve consumers
Consumer behavior was altered by the COVID-19 pandemic, which also expedited the digitization process. The most resilient organizations were those who swiftly implemented the required technology to accelerate their digital transition.
Over the past seven years, the number of online shoppers has multiplied by ten and in FMCG by twenty thanks to the rise of the internet. This enormous development is fueled mainly by e-commerce sites, modern trade retailers and top Vietnamese corporations. Especially Masan, on the fierce journey of market share competition in the retail consumer industry, this corporation focuses on digital transformation to boost consumer-retail industry development.
Furthermore, the increase of young middle-class people who are also tech-savvy and discerning shoppers, along with the development of retail chains, has paved the way for the development of the retail sector in Vietnam.
Consumers have a higher demand for personalization, not only with products but in every moment brands interact with them. Likewise, they have a greater need for convenience, not only with the product but also in every step of the buying journey. Thus, businesses must pay attention to local consumer confidence in their products.
As the Vietnamese economy continues to recover from the pandemic's effects and consumers' income levels rise, many top Vietnamese corporations in the retail-consumer sector are encouraging customer spending in the grocery sector by launching expansion initiatives.
A representative of Masan Group said: "During the past three years, Masan not only restructured WinMart/WinMart+ to become a profitable retail platform, but also taken steps to pioneer multi-utility retail models to meet the ever-evolving consumer demand. As a result, we are proud to launch the WINLife ecosystem, with the message "WIN is all you need," a destination with outstanding quality made by Vietnamese to serve Vietnamese consumers."
The urban population in Vietnam is expected to grow strongly over the next three decades. By 2030, 44.5% of Vietnamese would live in urban areas, an increase from 38.8% in 2022. This will give urban centers in Vietnam, such as Hanoi, Ho Chi Minh City, and Danang, an additional 8mn urbanized consumers by 2030. The young population is also a significant strength for Vietnam’s consumer sector.
In addition, consumers in urban areas will possess the requisite technical skills and hardware, such as smartphones, to access e-commerce platforms, allowing businesses to complement their business offerings by having multiple channels for consumers to access their products.
As a result, Top Vietnamese corporation - Masan launched WINLife "Is All You Need" ecosystem and opened 27 multi-utility stores on September 9, 2022. These first stores were established at prime locations in Hanoi and Ho Chi Minh City. WINLife is the one-stop shop ecosystem that provides consumers with a convenient and seamless offline-to-online experience. WINLife serves essential daily use items, ranging from the grocery (WinMart+), financial services (Techcombank), healthcare (Dr. Win), and F&B (Phuc Long) to telecommunication services (Reddi). In 2022, Masan plans to launch up to 100 WIN stores nationwide. The WINLife ecosystem will be Masan's next breakthrough to enhance customer experience via its consumer tech platform.
"WINLife is an all-in-one ecosystem that can meet our consumers' life needs, from necessities and entertainment to finance," said Danny Le, CEO of Masan Group.
WIN shops will save customers time and provide them with high-quality goods and services at a lower price for their daily essential consumption needs by providing multi-utility at one destination. As a result, WINLife Ecosystems will assist Masan in increasing its competitiveness and position as a top Vietnamese corporation in the retail consumer market.
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