In recent years, purchasing in traditional markets has been falling but that of supermarkets has grown at 15 percent - 25 percent. Convenience, stable prices and promotions have become a magnet to consumers in Ho Chi Minh City.
200 supermarkets
By the end of 2011, Ho Chi Minh City had over 200 supermarkets, double the number in 2005. The number of convenience stores also increased four times. The Shop & Go system had 47 stores, and Co-op Food system had more than 20 stores.
In mid-2011, Saigon Trading Corporation (Satra) started to step into the convenience store business under the name of Satramart. Many companies also established and developed convenience store chains to sell and introduce products. Vissan, a food producer, is one of the most successful companies with nearly 80 well-performing shops.
According to statistics, modern retailing chains (shopping malls, supermarkets and convenience stores) account for some 35 percent of retail revenues in Ho Chi Minh City, more than double their value of 15 percent in 2002, and standing above the national average of 21 percent. In contrast, the number of traditional markets in the largest economic centre in Vietnam shrank from more than 300 markets in 2005 to just 200 markets. These figures show that the shopping habits of consumers in the city have changed.
A market research company also pointed out that HCM City consumers increased spending value per visit in supermarkets from VND627,000 in 2005 to over VND1.419 million in 2010 and nearly VND1.5 million in 2011. Three reasons are cited for the increasing popularity of supermarkets: Convenience, safety for health and shopping satisfaction. A survey of 1,000 people in HCM City showed that 80 percent went to the supermarket every week, compared to just 12 percent 10 years ago.
Private label development
A director of a supply system for supermarkets analysed that three important factors determined consumer behaviour now, that is, convenience, relatively stable price thanks to good inventories over time, and the choice and quality of goods. The convenience is not limited to a pleasant shopping space, a wide variety of commodities, diverse but easy-to-select goods, eye-catching display, home delivery services, online sales, card payment and free parking.
While consumer prices keep rising, a supermarket essentially launches a wide range of promotion programmes as a way to share difficulties with customers. Merchandise items in supermarkets are diverse, increasing from 20,000 - 30,000 items to 50,000 - 60,000 items. Currently, consumers purchase not only fresh foods and household goods but also tiny items like needles and threads.
The competitive advantage of a supermarket comes not only from price factors but also from its ability to develop its own branded goods. For example, Co.opMart is currently selling more than 500 products carrying Co-op labels which are 5 - 10 percent cheaper than similar items made by other producers. The lower price is attributed to the absence of advertisement costs attached to products.
Similarly, Vissan also orders its partners to produce favourite products for its retailing system. All products are Vissan-branded. The company controls everything related to those products, from marketing to retail prices. Big C also has partnered with nearly 50 different companies to turn out BigC-branded products for its hypermarket chains. Its products are 5 - 30 percent cheaper than similar items at its supermarkets.
Vietnamese
