With a young population, an expanding middle class and one of Southeast Asia’s fastest-growing economies, Vietnam is luring retailers that are looking for new markets amid China’s slowing economy and declining business at home.
“The Vietnamese economy is growing rapidly and its middle class is explosively expanding,” said Nagahisa Oyama, chief executive of Vietnam and ASEAN operations at Aeon, told Bloomberg.
“Its retail market is growing very quickly with strong appetite for spending, especially among young people.”
Almost 60 percent of the country’s population of 93 million are under 35 years old and are becoming better educated, according to market research company Nielsen Vietnam.
Four days after an Aeon Mall opened in Ho Chi Minh City on July 1, it recorded sales that were 18 percent higher than originally estimated, the company said.
Aeon, Japan’s largest retailer by sales, currently operates four malls and 54 supermarkets in Vietnam.
The number of Aeon supermarkets in the Southeast Asian country is more than double the company’s grocery stores in China and comprises a third of supermarkets the Japanese business has opened outside its home market.
Other Japanese firms are also seeking to tap the Vietnamese market.
About 20 consumer companies from Japan, including a chocolate maker, a noodle company and a green tea manufacturer, met with potential Vietnamese partners last Wednesday at an investment conference in Hanoi organized by Mitsubishi UFJ Financial Group Inc. and Vietnam JSC Bank for Industry and Trade.
Japanese corporations are increasingly looking outside of the nation for growth.
Aeon recorded a net loss for the March to May period, its third quarterly loss within a year as a declining and increasingly frugal Japanese population capped sales, Bloomberg said.
“We think competition in the Vietnamese retail market will increase with Japanese convenience stores as well as Korean and Thai companies entering there,” Oyama said.
The company’s tie-ups with local grocery chains Citimart and Fivimart will help expand its business, he added.
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