Competition in the retail market of Vietnam

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In Vietnam, the retail business experiences more and more active competition between the major brands of Co.opmart; Big C and Metro.

Foreign enterprises entrance cause tougher competition in Vietnam but within this competition, the Vietnamese Co.opmart and the Thai Central Group’s retailer Big C are active competitors. Their strategies to differ from each other are characterized in various ways. Big C is considered to have lower price by 1-3% from other supermarkets. It also aims to provide the best price to the customers combined with quality control and good service.

Co.opmart’s business plan focuses on daily good prices for that customers can receive fresh food and good customer support. Experts say that Co.opmart understands the consumer psychology in Vietnam what definitely is an advantage. Both enterprises also have certain similarities in doing their business. For example, both retailers preferably sell domestic goods which represent an amount of 90-95% of their overall products and build good connections with farms, manufacturers and thereby enhance the presence of Vietnamese products in the market.

 They also launch more and more private label goods which are a real advantage for all distributors.  At the moment, the two retailers Big C and Co.opmart have a market share in the food retailing market of about 55-60% in Vietnam. But Co.opmart is not the only brand of the Saigon Co.op’s business in Vietnam. Another brand is Co.opXtraplus which is a competitor for the German Metro wholesale business. With Co.opXtraplus’ existance, Metro is no longer the only big wholesale business.

The business model of Co.opXtraplust is similar to the Metro Cash &  Carry one’s and having said that Co.opXtraplus not only targets individuals like the Co.opmart but also companies, factories, schools, restaurants and hotels. When in former times Metro was the wholesale giant in the business, now Co.opXtraPlus is becoming a serious competitor.  In the retail sector, the Saigon Co-op’s supermarket chain Co.opmart 63 willl compete more and more with Big C and the group will be a competitor in the two branches of retail and wholesale.

To counter back, Metro implemented new strategies to conquer Saigon Co-op by extending the target groups‘ profile to open for more specific customer groups such as bars, grocery stores, canteens or offices and Metro also starts to offer services such as delivery and consulting services for small retail stores to help them increase their efficiency and competitiveness. Additionally, Metro expands diversified distribution in multiple sales channels such as delivery and payment in debit form as addition to the model of the Cash & Carry tradition. Metro still has 24 centers in Vietnam and the government has supported Metro with good conditions for the distribution centers especially on conditions concerning location.  Intense but healthy competition is a good booster for innovative retail investors and professional services.  This creates opportunities to contribute to the growth and development of Vietnam‘s retail market to become more efficient and provide best products and service customers in Vietnam.

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