Auchan Retail Vietnam would have to face great challenges in an increasingly competitive market if it wants to reach the target of expansion.
Auchan expects to expand its business in Vietnam into 300 supermarkets within the next four years in the two main zones – Hanoi and Ho Chi Minh City. This information was provided by HR Director of Auchan Retail Vietnam Jean-Manuel Cros on the sideline of the conference on 30 years of foreign direct investment attraction in Vietnam.
The possibility of additional 279 stores over the next four years, meaning that scaling up at a rate of 10 times faster than the current average speed of 7 stores opened per year is still a huge ambition for any enterprises operating in the retail sector in Vietnam in the context of a fierce competition today.
Vietnam is considered as a potential retail market with nearly 100 million people in the population, the income of the people, as well as the number of people in the middle class, tend to increase. And the consumer demand in Vietnam is also on the rise.
Those are the factors making Vietnam a lucrative cake that both domestic and foreign retailers scramble for. Many years ago, names of world's leading retailers such as Lotte (South Korea), Aeon, Family Mart, Ministop, 7-Eleven (Japan) or Big C (Thailand) landed in Vietnam and keep growing at a dizzy pace.
Notably, Vietnamese giant Vingroup has recently emerged in the Vietnamese retail market when VinCommerce, a wholly-owned subsidiary of the group, acquired the entire stake in Fivimart to further expand its operations in the retail sector.
With this deal, after nearly four years, Vingroup’s supermarket system witnesses a dramatic growth in terms of scale with 100 Vinmart supermarkets and 1,400 Vinmart+ grocery stores. It expects to expand its operation to 200 supermarkets and 4,000 grocery stores by 2020.
Meanwhile, despite being a world leading retailer listed in the Fortune 500 with nearly 300,000 employees in 17 countries, Auchan has opened only 21 supermarkets in Hanoi, Tay Ninh and Ho Chi Minh City since the official launch of its first supermarket in Vietnam three years ago.
To fulfill the ambition of dominating the Vietnamese retail market, according to Philippe Courbois, Innovation Director of Auchan Retail Vietnam, technology and digital application is utmost important in the retail value chain that the group is building.
“In order to well serve customers in the retail sector, we have done research and applied machine learning, IoT and cloud computing, social network, omnichannel, mobile apps, etc.,” said Philippe Courbois.
With the parent company’s abundant financial and technology resources, Auchan is one of the pioneering retailers in applying technology to business as well as being nimble with the latest retail trends in Vietnam market.
Also, HR Director of Auchan Retail Vietnam Jean-Manuel Cros said that in order to be successful in Vietnam, “getting married to Vietnam”, which means cooperating with local partners, is unavoidable as Vietnam is a new market to Auchan.
The connection, according to the leader of Auchan Retail Vietnam, is the cooperation in terms of products and locations for supermarkets. In that case, the company can have enough supplies and the local partners can develop clean materials, targeting at better serving Vietnamese customers.
“It is necessary to identify Vietnamese as the main target customer when doing business in Vietnam. In order to change their lives positively, it is necessary to have a clear strategy of combining with the localities to become a fighter for the health and life of the consumers,” said Jean-Manuel Cros.
However, for businesses in general and businesses in the retail sector, in particular, to develop in the Vietnam market, Auchan's representative said that the Government should support enterprises in the import of goods, especially the reduction of procedure required.
He said that when importing a shipment, a long-lasting and complicated verification process is required. Also, some products are not allowed to import to Vietnam.
In terms of human resources in the retail sector, Jean-Manuel Cros highlighted that the Government should invest in this sector by opening a retail major in colleges and universities for youngsters to get access to more knowledge and opportunities in this field.
By doing that, enterprises could recruit high quality and well-trained employees, greatly supporting enterprises in particular and Vietnam retail markets as a whole to develop strongly.
“There are many training programs about economics, business administration but no one about retail; therefore, it is hard for the sector to develop when employees do not have a thorough understanding,” said HR Director of Auchan Retail Vietnam.
TheLEADER,9 Oct 2018