Central Retail, a major player in the retail industry, is reportedly in talks to acquire a large shopping mall chain in Vietnam, as the country’s retail market is an attractive destination for foreign investors.
The Thai company has a history of engaging in mergers and acquisitions (M&As) to expand its business in Vietnam. However, the domestic shopping mall chain in question has denied the rumors.
Central Retail, owned by the Thai billionaire family Chirathivat, has total assets worth $10.6 billion, and entered the Vietnamese market in 2012 as a fashion retailer. It has since expanded its network through M&A deals, such as the acquisition of Big C Vietnam in 2016 for $1.05 billion.
The company has also been expanding its smaller-scale food stores, competing directly with traditional markets and convenience stores. In 2021, it completed the renaming of supermarkets and hypermarkets, eliminating the Big C brand in Vietnam after 22 years.
Central Retail Vietnam currently has 340 business units in 40 cities/provinces, making it the largest international retailer in Vietnam, leading the hypermarket segment, and ranking second in terms of shopping center market share.
The company has set an ambitious goal of becoming the No. 1 omni-channel food retailer and No. 2 in terms of shopping centers in Vietnam by 2027. It plans to double its number of stores to 600 in 57 cities/provinces, with a total retail premises of 2 million sq m. The investment capital for 2023 alone is expected to be 6 billion Baht ($174 million).
While experts believe the company is likely to expand through further M&A deals, not all of its business deals in Vietnam have been successful. In 2019, it had to shut down Robins.vn.
Sophie Dao, Senior Partner at GBS – Global Business Services LLC – an awarded M&A advisory firm said “Foreign investors are attracted to Vietnam’s M&A market as it provides an opportunity to enter a growing market and expand their business operations in the region.”
“Vietnam has a rapidly growing economy, with a projected GDP growth rate of 6.7% in 2023 and 7.2% in 2024. This means that there is significant potential for businesses to grow and expand in the country. Vietnam’s retail market is estimated to be worth $49.7 billion per year and is growing at a rate of 10-12% per annum. This provides a large market for retail businesses to tap into.” Sophie added.
The country’s urban population is increasing, and the number of foreign travelers is predicted to rise. This presents opportunities for businesses in sectors such as hospitality and tourism. Vietnam’s government has implemented policies to encourage foreign investment in the country. This includes tax incentives, simplified regulations, and the removal of foreign ownership restrictions in several industries.