HO CHI MINH CITY, Vietnam, June 2, 2018 /PRNewswire/ -- Which is the most popular market for foreign retail investors in recent years? The answer is Vietnam. According to the General Statistics Office of Vietnam, the total retail sales in Vietnam reached $129.56 billion in 2017, increasing 10.9% compared with the previous year, which shows that the country's retail market continues to maintain a steady growth with huge market potential. Therefore, the Vietnamese market has become a fertile ground for many international retail brands, including 7-Eleven, Family Mart, ZARA, MINISO and other well-known retail brands. MINISO, the Japanese designer brand has opened 40 stores in this country so far, and is popular with local consumers.
With a saving ratio of merely 15%, Vietnamese young people have a strong sense of consumption
The frenzied influx of foreign retailers has undoubtedly intensified competition in Vietnam's retail market. MINISO is not the first retail brand to enter the market, but it is one of the strongest. Since its establishment in September 2016, the Vietnamese subsidiary of MINISO has opened nearly 40 stores in Vietnam and plans to open another 50 stores by the end of 2018.
MINISO has adopted the strategy of developing around "north-south" key cities, centering on Ho Chi Minh in the south of Vietnam and Hanoi in the north. Mr. Ted, the general manager of MINISO Vietnam expressed that, currently there are 17 MINISO stores in Ho Chi Minh, 19 stores in Hanoi, and 4 stores in different provinces, and the performances of those stores were prominent. With high quality and affordable prices as well as exquisite design, most MINISO products are priced between VND 43,000 and VND 500,000, thus earning love from the major consumers aged from 18 to 35. Even in the same age group, people's consumption behaviors vary from region to region.
According to market research, Ho Chi Minh City, with a population of 12 million, is Vietnam's largest province and economic center. In recent years, Ho Chi Minh City has maintained a high growth rate of GDP of 9% a year, with a per capita GDP of $5,500 and a per capita income of about VND 10 million (about RMB 3,000). Compared with other countries of the same type, Vietnam's savings ratio is at a relatively low level, at about 15%. Mr. Ted indicated that MINISO's current consumer group is mainly young women. Those who shop in stores are mainly young people, with both men and women, but their income level is from medium to upper class. At the same time, their consumption level is relatively high, with per capita consumption as high as RMB 60-80. This is one of the major reasons that the retail market of Vietnam has huge potential.
MINISO focuses on the shopping mall and shapes the brand perception of consumers
With the influx of foreign investment, and the rise of a large number of urban commercial complex, especially the rapid development of the third industry, the consumption habits of the Vietnamese are changing from the traditional street consumption to the shopping mall, which integrates different kinds of beer and skittles. MINISO, which is keenly aware of the trend, has adjusted its expansion strategy in the Vietnamese market, moving from crowded neighborhoods to malls and shopping centers.
The correct strategy adjustment needs to be analyzed in combination with the actual situation of the country. According to the Ministry of Trade and Industry of Vietnam, there will be 1,200 to 1,500 supermarkets, 180 commercial centers and 157 shopping centers nationwide by 2020. Last October, MINISO reached cooperation with Vincom, Vietnam's largest commercial real estate group, to pave the way for the brand's future development in Vietnam's major commercial and shopping centers. Mr. Ted, the general manager of MINISO Vietnam said that, the headquarters of Vincom is in Hanoi and is known as China's "Wanda Group" in Vietnam, which has opened two stores in Hanoi cooperating with MINISO, and both of them are in Hanoi, where sales are very good.
For the future strategic transformation of the Vietnamese market, MINISO not only cooperated with Vincom, but also reached cooperation with Vietnamese super star Son Tung M-TP as its brand spokesman. Son Tung M-TP is a well-known singer in Vietnam, whose fans are about 16 to 30 years old, which fits the target consumption group of MINISO. His Facebook has over ten million fans, which is highly influential in the local area. The cooperation aims to build positive brand image of MINISO to local consumers and deepen their awareness of the brand.
Among 10,000 stores worldwide, there are 400 stores established in Vietnam, which shows MINISO's superiority in the local market.
The retail industry in Vietnam has great potential, and there are new brands being introduced into Vietnam almost every day. Support of government policies, the rapid rise of the middle class and the relatively young demographic structure are the factors contributing to the rapid growth of the retail market. However, the competitiveness of domestic retail brands is relatively weak. There are many large-scale enterprises with large market share in the Vietnamese retail market, such as Co. Op Mart, Vinmart, Fivimart, SaigonCoop, etc., but there are few brands of the same type with MINISO. Compared with those domestic brands, MINISO Vietnam's advantage is obvious.
What are MINISO's unique selling points in addition to its high quality but low-price products and the designer brand image? As for this, Mr. Ted expressed that, first of all, MINISO has a strong supply chain system to support its operation. The 10,000-square-meter sorting warehouse in Ho Chi Minh City will be put into use in the middle of 2018. It will provide strong support for store digital operation and analysis as well as the whole logistics supply chain; secondly, MINISO owns its unique "IP products", the latest design of new products, fast update speed, meets the consumption habit of local consumers and caters to the taste of the masses. At the same time, it does its best to let consumer love and rely on MINISO products.
In recent years, the development of MINISO in the global market is eye-catching. So far, MINISO has opened more than 2,600 stores worldwide, covering over 62 countries and regions, including the U.S., Australia, Canada, Korea, Japan, China and Indonesia, etc. In 2017, the turnover of MINISO reached USD 1.8 billion, which has doubled comparing the turnover of 2015. With a highly growing rate, MINISO opens 80-100 stores every month. It is expected to open 10,000 stores throughout the world by 2022, among which there will be 400 stores being opened in Vietnam.