More than 10 convenience store brands in the central business district in HCMC are in a competition to secure retail premises in advantageous positions.
The locations near residential quarters, traditional markets, schools and office buildings are being hunted by retailers who are rushing to expand their convenience store networks.
Since the opening of its first store in mid-2017, 7-Eleven has opened 11 stores located in districts 1, 2, 7 and Binh Thanh, near office buildings and high-end residential quarters.
The retail chain is continuing to seek retail premises in all districts. An ad says 7-Eleven will pay VND40 million a month in rent for small premises and VND90-120 million for large premises. The premises must be at least 8 meters wide and 30 meters long.
“The retail premises in CBDs and localities with high population density are getting very scarce and the rent has been escalating,” said Nguyen Thi Hong Trang, CEO of GS25 Vietnam, which made its debut in HCMC on January 19.
Yun Ju Young from GS25 Vietnam also commented that retail premises rent is the costliest expense for investors who want to join the Vietnamese convenience store market. He said GS25 anticipated that it won’t make a profit or even take a loss in the first three years of operation in Vietnam.
An analyst commented that GS25 has great advantages joining the Vietnamese market because it is backed by a big real estate firm – Son Kim Land, which holds 70 percent of capital of SG25 Vietnam. The remaining 30 percent is held by South Korean GS25.
Son Kim Land created favorable conditions for GS25 stores to open. A Son Kim fashion shop on Truong Dinh street in district 3, HCMC, has been replaced by a convenience store.
Vinmart+, with powerful financial capability, also is competing fiercely for retail premises in many cities and provinces.
In December 2017 alone, it opened more than 100 stores in 11 cities/provinces. It is estimated that 3 Vinmart+ stores open a day. The brand now has 1,000 stores and is seen everywhere in HCMC.
More convenience stores have opened in Vietnam as retailers have been expanding their networks.
On a short section of road, several hundreds of meters long, several convenience stores can be seen. Bui Thi Xuan street, for example, has three convenience store brands – Circle K, Family Mart and B’s Mart.
Even the newcomers whose names are still unfamiliar to Vietnamese, such as GS25 and Toromart, also have ambitious plans to open thousands of stores. The former plans to have 50 stores this year, while the latter wants 200.