Vietnam retail analysis (2008 2012)

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Vietnam retail analysis (2008 2012)

  1. 1. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research© RNCOS Page 1 of 81
  2. 2. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Published by RNCOS E-Services Pvt. Ltd. 29, Functional Industrial Estate Patparganj, Delhi - 110092 Tel: +91-11-4214-1229 Email: info@rncos.com www.rncos.com © Vietnam Retail Analysis (2008-2012) RNCOS, 2008 Edition 1.0 All rights reserved. This publication is protected by copyright. No part of it may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic mechanical, photocopying, recording or otherwise without the prior written permission of the publishers.© RNCOS Page 2 of 81
  3. 3. RNCOS Vietnam Retail Analysis (2008-2012)Online Business ResearchAbout the ReportVietnam is the fourth most attractive retail market in the world in terms of potential growthowing to both increasing demand for consumer goods and rising disposable incomes, behindIndia, Russia and China. The retail market of the country has expanded rapidly over the pastfew years and will accelerate further on the back of rising disposable income, growingconsumer spending and sector’s liberalization in the coming years, according to new marketresearch report, “Vietnam Retail Analysis (2008-2012)”, by RNCOS.The detailed data and analysis given in the report will help the client to evaluate the leading-edge opportunities critical to the success of the retail market in Vietnam. The report givesrational forecast and estimations that are intended as a rough guide to the direction in whichthe Vietnamese retail market is likely to move.Key Findings  Retail sales in Vietnam are forecasted to grow at a CAGR of about 13.6% during 2008- 2012.  Food is the most important component of Vietnam’s retail sector and accounts for nearly two-third of total retail sales.  Non-food sector is expected to grow at a faster pace than food, because of the rise in income and consumer spending on non-essential items such as clothing, electrical and DIY goods.  Demand for international brands and luxury products will rise as income level move upwards in the country.  Modern retailing formats like air-conditioned mini-marts, supermarkets and small shopping complexes will become more prevalent in the coming years and will lure consumers away from traditional outdoor markets.Key Issues & Facts Analyzed  Where Vietnam stands in terms of products affordability index?  What is the consumer behavior?  Which are the fastest growing products?© RNCOS Page 3 of 81
  4. 4. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research  What are the key driving factors to the market?  How the market is likely to move in future?  What are the key challenges for the market?  Who are the key players in the market?Research Methodology UsedInformation SourcesInformation has been sourced from books, newspapers, trade journals, and white papers,industry portals, government agencies, trade associations, monitoring industry news anddevelopments, and through access to more than 3000 paid databases.Analysis MethodsThe analysis methods include ratio analysis, historical trend analysis, linear regressionanalysis using software tools, judgmental forecasting, and cause and effect analysis.© RNCOS Page 4 of 81
  5. 5. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Table of Content1. Analyst View ..................................................................................................................................... 102. Vietnam - An Attractive Retail Market ............................................................................................ 113. Growing Retail Market - An Analysis.............................................................................................. 12 3.1 Purchasing Power & Consumer Spending ................................................................................ 12 3.2 Population.................................................................................................................................. 15 3.3 Urbanization............................................................................................................................... 17 3.4 Employment............................................................................................................................... 18 3.5 Tourism ...................................................................................................................................... 20 3.6 Consumer Financing.................................................................................................................. 22 3.7 Economic Liberalization............................................................................................................. 23 3.8 Economic Stability ..................................................................................................................... 244. Retail Market Performance .............................................................................................................. 26 4.1 Retail Sales................................................................................................................................ 26 4.1.1 Food ...................................................................................................................................... 28 4.1.2 Non-food................................................................................................................................ 29 4.1.2.1 Clothing......................................................................................................................... 31 4.1.2.2 Footwear ....................................................................................................................... 33 4.1.2.3 Cosmetics & Toiletries .................................................................................................. 35 4.1.2.4 Perfumes & Fragrances................................................................................................ 37 4.1.2.5 Furniture........................................................................................................................ 38 4.1.2.6 Household Cleaning Products ...................................................................................... 40 4.1.2.7 Consumer Electronics................................................................................................... 42 4.1.2.7.1 TV Sets.................................................................................................................... 42 4.1.2.7.2 Mobile Handsets...................................................................................................... 43 4.1.2.7.3 Personal Computers ............................................................................................... 44 4.1.2.7.4 Video Recorders...................................................................................................... 45 4.1.2.7.5 Washing Machines .................................................................................................. 45 4.1.2.7.6 Others...................................................................................................................... 47 4.2 By Province................................................................................................................................ 48 4.2.1 South East ............................................................................................................................. 48 4.2.2 Red River Delta ..................................................................................................................... 49 4.2.3 Mekong River Delta ............................................................................................................... 50 4.2.4 South Central Coast .............................................................................................................. 51 4.2.5 North Central Coast............................................................................................................... 52 4.2.6 North East.............................................................................................................................. 53 4.2.7 Central Highlands .................................................................................................................. 54 4.2.8 North West............................................................................................................................. 55 4.3 By Ownership ............................................................................................................................ 56 4.3.1 State-owned Companies ....................................................................................................... 56 4.3.2 Non-state-owned Companies................................................................................................ 57 4.3.3 Foreign-owned Companies ................................................................................................... 58 4.4 By Retail Format ........................................................................................................................ 59 4.4.1 Traditional Market.................................................................................................................. 61 4.4.2 Supermarket .......................................................................................................................... 62 4.4.3 Hypermarket & Warehouse Clubs......................................................................................... 63 4.4.4 Convenience Stores .............................................................................................................. 645. Consumer Behavior Pattern ............................................................................................................ 656. Product Affordability Analysis ........................................................................................................ 687. Future Growth Prospects ................................................................................................................ 69 7.1 Developing Trend of Modern Retailing ...................................................................................... 69 7.2 Online Retailing ......................................................................................................................... 70 7.3 Non-food Retailers..................................................................................................................... 71 7.4 POS Terminal ............................................................................................................................ 71 7.5 International Brands & Luxury Goods........................................................................................ 72© RNCOS Page 5 of 81
  6. 6. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research 7.6 IT in Retailing............................................................................................................................. 72 7.7 High-tech Retailers .................................................................................................................... 73 7.8 Hotel & Restaurants................................................................................................................... 748. Key Industry Hurdles ....................................................................................................................... 75 8.1 Skilled Staff................................................................................................................................ 75 8.2 Consumer Price Index ............................................................................................................... 76 8.3 Retail Space & Cost................................................................................................................... 77 8.4 Trade Barriers & State Subsidiaries .......................................................................................... 78 8.5 Infrastructure.............................................................................................................................. 789. Competitive Landscape ................................................................................................................... 79© RNCOS Page 6 of 81
  7. 7. RNCOS Vietnam Retail Analysis (2008-2012)Online Business ResearchList of Figures:Figure 3-1: Vietnam - Per Head Personal Disposable Income (in US$), 2002-2007E ............................... 12Figure 3-2: Vietnam - Forecast for Per Head Personal Disposable Income (in US$), 2008-2012 ............. 13Figure 3-3: Vietnam - Consumer Spending (in Million US$), 2002-2007E ................................................. 13Figure 3-4: Vietnam - Forecast for Consumer Spending (in Million US$), 2008-2012 ............................... 14Figure 3-5: Vietnam - Population (in Million), 2002-2007E ......................................................................... 15Figure 3-6: Vietnam - Forecast for Population (in Million), 2008-2012 ....................................................... 16Figure 3-7: Vietnam - Urban Population (in Million), 2001-2006P .............................................................. 17Figure 3-8: Vietnam - Employment (in Million), 2002-2007E ...................................................................... 18Figure 3-9: Vietnam - Forecast for Employment (in Million), 2008-2012 .................................................... 19Figure 3-10: Vietnam - Tourist Arrivals (in ‘000), 2003-2007E ................................................................... 20Figure 3-11: Vietnam - Forecast for Tourist Arrivals (in ‘000), 2008-2012 ................................................. 21Figure 3-12: Vietnam - Credit/Debit Cards (in Million Units), 2004-2006 ................................................... 22Figure 3-13: Vietnam - Nominal GDP (in Million US$), 2002-2007E .......................................................... 24Figure 3-14: Vietnam - Forecast for Nominal GDP (in Million US$), 2008-2012 ........................................ 25Figure 4-1: Vietnam - Retail Sales (in Million US$), 2002-2007E............................................................... 26Figure 4-2: Vietnam - Forecast for Retail Sales (in Million US$), 2008-2012............................................. 27Figure 4-3: Vietnam, China & Thailand - Share of Retail Sales in Nominal GDP (%), 2007 ...................... 27Figure 4-4: Vietnam - Food Retail Sales (in Million US$), 2002-2007E ..................................................... 28Figure 4-5: Vietnam - Non-food Retail Sales (in Million US$), 2002-2007E............................................... 29Figure 4-6: Vietnam - Non-food Retail Sales by Segment (%), 2007E....................................................... 30Figure 4-7: Vietnam - Clothing Sales (in Million US$), 2002-2007E........................................................... 31Figure 4-8: Vietnam - Forecast for Clothing Sales (in Million US$), 2008-2012......................................... 32Figure 4-9: Vietnam - Footwear Sales* (in Million US$), 2002-2007 .......................................................... 33Figure 4-10: Vietnam - Forecast for Footwear Sales (in Million US$), 2008-2012 ..................................... 34Figure 4-11: Vietnam - Cosmetics & Toiletries Sales (in Million US$), 2002-2007E .................................. 35Figure 4-12: Vietnam - Forecast for Cosmetics & Toiletries Sales (in Million US$), 2008-2012 ................ 36Figure 4-13: Vietnam - Perfumes & Fragrances Sales (in Million US$), 2002-2007E................................ 37Figure 4-14: Vietnam - Forecast for Perfumes & Fragrances Sales (in Million US$), 2008-2012.............. 37Figure 4-15: Vietnam - Furniture Sales (in Million US$), 2002-2007E........................................................ 38Figure 4-16: Vietnam - Forecast for Furniture Sales (in Million US$), 2008-2012...................................... 39Figure 4-17: Vietnam - Household Cleaning Product Sales (in Million US$), 2002-2007E ........................ 40Figure 4-18: Vietnam - Forecast for Household Cleaning Product Sales (in Million US$), 2008-2012 ...... 41Figure 4-19: Vietnam - TV Set Sales (in ‘000 Units), 2002-2007E ............................................................. 42Figure 4-20: Vietnam - Forecast for TV Set Sales (in ‘000 Units), 2008-2012 ........................................... 43Figure 4-21: Vietnam - Mobile Handset Sales* (in Million Units), 2006 & 2007 ......................................... 44Figure 4-22: Vietnam - Personal Computer Sales (in Million Units), 2006*-2008F .................................... 44Figure 4-23: Vietnam - Video Recorder Sales (in ‘000 Units), 2002-2005 ................................................. 45Figure 4-24: Vietnam - Washing Machine Sales (in ‘000 Units), 2002-2007E ........................................... 46Figure 4-25: Vietnam - Forecast for Washing Machine Sales (in ‘000 Units), 2008-2012 ......................... 46Figure 4-26: South East - Goods & Services Retail Sales (in Trillion VND), 2002-2006P ......................... 48Figure 4-27: Red River Delta - Goods & Services Retail Sales (in Trillion VND), 2002-2006P ................. 49Figure 4-28: Mekong River Delta - Goods & Services Retail Sales (in Trillion VND), 2002-2006P ........... 50Figure 4-29: South Central Coast - Goods & Services Retail Sales (in Trillion VND), 2002-2006P .......... 51Figure 4-30: North Central Coast - Goods & Services Retail Sales (in Trillion VND), 2002-2006P ........... 52Figure 4-31: North East - Goods & Services Retail Sales (in Trillion VND), 2002-2006P .......................... 53Figure 4-32: Central Highlands - Goods & Services Retail Sales (in Trillion VND), 2002-2006P .............. 54Figure 4-33: North West - Goods & Services Retail Sales (in Trillion VND), 2002-2006P ......................... 55Figure 4-34: Vietnam - Goods & Services Retail Sales by State-owned Companies (in Trillion VND),2002-2006P................................................................................................................................................. 56Figure 4-35: Vietnam - Goods & Services Retail Sales by Non-state-owned Companies (in Trillion VND),2002-2006P................................................................................................................................................. 57Figure 4-36: Vietnam - Goods & Services Retail Sales by Foreign-owned Companies (in Trillion VND),2002-2006P................................................................................................................................................. 58Figure 4-37: Vietnam - Share of Sales by Traditional & Modern Retail Format (%), 2007......................... 59© RNCOS Page 7 of 81
  8. 8. RNCOS Vietnam Retail Analysis (2008-2012)Online Business ResearchFigure 4-38: Ho Chi Minh & Hanoi - Share of Traditional & Modern Trade (%), 2004-2006 ...................... 60Figure 4-39: Vietnam - Share of Hypermarkets & Supermarkets in Food Retail Sales (%), 2007E & 2020F.................................................................................................................................................................... 63Figure 5-1: Vietnam - Main Shoppers* & Key Influencers** (%), 2005....................................................... 66Figure 7-1: Vietnam - Share of Modern Retailing in Retail Sales (%), 2007 & 2017F................................ 69Figure 7-2: Vietnam - Forecast for Internet Users (in ‘000), 2008-2012 ..................................................... 70Figure 7-3: Vietnam - Forecast for Consumer Expenditure on Hotel & Restaurants (in Million US$), 2008-2012 ............................................................................................................................................................ 74Figure 8-1: Vietnam - Consumer Price Inflation (%), Sep 2007 to Mar 2008 ............................................. 76© RNCOS Page 8 of 81
  9. 9. RNCOS Vietnam Retail Analysis (2008-2012)Online Business ResearchList of Tables:Table 2-1: Top 10 Retail Markets by Global Retail Development Index, 2007........................................... 11Table 4-1: Vietnam* - Number of Modern Retail Outlets by Brand (2004-2006) ........................................ 60Table 4-2: Vietnam* - Number of Traditional Stores by Format (2004-2006)............................................. 61Table 4-3: Vietnam* - Number of Supermarkets (2004-2006) .................................................................... 62Table 4-4: Vietnam* - Number of Hypermarkets & Warehouse Clubs (2004-2006)................................... 63Table 4-5: Vietnam* - Number of Convenience Stores (2004-2006) .......................................................... 64Table 6-1: Vietnam - Price & Affordability Rank by Product, 2007 ............................................................. 68© RNCOS Page 9 of 81
  10. 10. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research1. Analyst ViewRetail market in Vietnam has expanded significantly over the past few years, but it is stillfragmented and underdeveloped, with small family-owned businesses (based on traditionalformats) dominating the sector. The government also retains a tight control over the entranceof new foreign players into the market. But despite a slow start, the sector has expandedquickly and recently seen a greater degree of foreign investment. Moreover, the market hasexperienced consolidation, leading to the creation of large shops and shopping centers. Inview of rapidly expanding retail market, foreign-owned retailers too have expanded theiroperations in the country.However, there is a wide gap between big cities and rural provinces in terms of retailinginfrastructure. Less-developed cities and provinces, which account for about 80% of thepopulation, have a large number of retail businesses, especially traditional retail outlets andmarkets. It is only few big cities, such as Ho Chi Minh City and Hanoi, which have recorded asignificant increase in the number of new modern retail outlets, including both local andforeign.Segment-wise, the demand for consumer goods has been strong, particularly in urban areas.White goods and consumer electronics sectors have seen a number of foreign-invested jointventures that manufacture their brands locally. Most of the output is exported. Clothingsector is well-developed and export-oriented while the cosmetics and toiletries sector doesnot possess well-developed local manufacturing facilities.As expected from a developing market, food is the most important component of retail sales,accounting for about two-thirds of the total sales. However, this share has begun declining asincome rise and consumers spend more on non-essential items such as clothing, electrical andDIY goods.In rural areas, the development of modern form of retailing will be slow compared to the fastpace development in urban centers. Therefore, the traditional retailing sector will remaindominant in rural areas in coming few years.© RNCOS Page 10 of 81
  11. 11. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research2. Vietnam - An Attractive Retail MarketThe rapid growth in Vietnamese retail market in the recent past has made the country anattractive destination to multinational retailers. The World Bank ranked Vietnam fourth afterIndia, Russia and China in terms of Global Retail Development Index (GRDI). The retail sales inthe country grew 18-22% annually during 2003-2007. Moreover, Vietnam currently housesaround 140 supermarkets and hypermarkets, 20 trade centers, and nearly 1 Million SquareMeter of floor area is under construction for retail business. Table 2-1: Top 10 Retail Markets by Global Retail Development Index, 2007 Country Market Market Time GRDI* Rank Country Region Risk Attractiveness Saturations Pressure Score (25%) (25%) (30%) (20%) 1 India Asia 67 42 80 74 92 2 Eastern Russia Europe 62 52 53 90 89 3 China Asia 75 46 46 84 86 4 Vietnam Asia 57 34 76 59 74 5 Eastern Ukraine Europe 41 43 44 88 69 6 Chile Americas 80 51 42 43 69 7 Eastern Latvia Europe 77 32 21 86 68 8 Malaysia Asia 70 44 46 54 68 9 Mexico Americas 83 58 33 33 64 10 Saudi Middle Arabia East 65 40 66 35 64Source: Euromoney, World Bank, Global Competitiveness Report 2005-06 & AT Kearney AnalysisNote: *Global Retail Development Index© RNCOS Page 11 of 81
  12. 12. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research3. Growing Retail Market - An Analysis3.1 Purchasing Power & Consumer SpendingPer head personal disposable income has gone up at a CAGR of about 7.3% during 2002-2007and further it is forecasted to grow at a CAGR of about 10.3% during 2007-2012. Increase inper head personal disposable income resulted in a rise in the purchasing power and in turn,growth in consumer spending on retail products. Thus, rise in disposable income has been themain driver for the growth in Vietnamese retail market and will continue to drive the marketin coming years too. Figure 3-1: Vietnam - Per Head Personal Disposable Income (in US$), 2002-2007E 400 376 341 350 317 306 300 282 264 250 in US$ 200 150 100 50 0 2002 2003 2004 2005 2006E 2007ESource: Euromonitor & EIU Calculations© RNCOS Page 12 of 81
  13. 13. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 3-2: Vietnam - Forecast for Per Head Personal Disposable Income (in US$), 2008-2012 700 615 600 560 512 500 468 426 in US$ 400 300 200 100 0 2008 2009 2010 2011 2012Source: Euromonitor & EIU CalculationsConsumer spending, in line with disposable income, grew at a CAGR of about 14.5% during2002-2007 and is projected to hit a CAGR of about 14.8% during 2007-2012 to reach US$ 89.7Billion by 2012 end. Figure 3-3: Vietnam - Consumer Spending (in Million US$), 2002-2007E 50,000 44,935 45,000 38,814 40,000 33,618 35,000 in Million US$ 29,575 30,000 26,206 25,000 22,825 20,000 15,000 10,000 5,000 0 2002 2003 2004 2005 2006E 2007ESource: International Financial Statistics© RNCOS Page 13 of 81
  14. 14. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 3-4: Vietnam - Forecast for Consumer Spending (in Million US$), 2008-2012 100,000 89,685 90,000 78,769 80,000 69,511 70,000 60,733 in Million US$ 60,000 53,102 50,000 40,000 30,000 20,000 10,000 0 2008 2009 2010 2011 2012Source: International Financial Statistics© RNCOS Page 14 of 81
  15. 15. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research3.2 PopulationRapid growth in population is one of the main drivers for growth in Vietnamese retail market.As the population increases, demand for retail products too increases. The population grew ata constant rate with an increment of one million each year to estimated figure of 86 Million atthe end of 2007. Figure 3-5: Vietnam - Population (in Million), 2002-2007E 87 86 86 85 85 84 84 83 in Million 83 82 82 81 81 80 79 78 2002 2003 2004 2005 2006E 2007ESource: General Statistical Office, Statistical Yearbook; World Bank, 1997 Country EconomicMemorandum; World Bank, Rising to the Challenge, 1998The population of the country is further is anticipated to grow by 5 Million in 2012 over thepopulation of 87 Million in 2008 to reach 92 Million.© RNCOS Page 15 of 81
  16. 16. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 3-6: Vietnam - Forecast for Population (in Million), 2008-2012 93 92 92 91 90 90 89 in Million 89 88 88 87 87 86 85 84 2008 2009 2010 2011 2012Source: General Statistical Office, Statistical Yearbook; World Bank, 1997 Country EconomicMemorandum; World Bank, Rising to the Challenge, 1998© RNCOS Page 16 of 81
  17. 17. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research3.3 UrbanizationMost of the modern retail formats in Vietnam are concentrated in urban areas and urbanpopulation has comparatively easy asses to various retail formats as compared to their ruralcounterparts. Thus, increase in urbanization gives a big boost to the Vietnamese retailmarket. Urban population increased at a CAGR of about 3.2% during 2001-2006 to reach apreliminary figure of 22.8 Million at the end of 2006. Figure 3-7: Vietnam - Urban Population (in Million), 2001-2006P 24 22.8 23 22.3 22 21.7 20.9 in Million 21 20 20 19.5 19 18 17 2001 2002 2003 2004 2005 2006PSource: General Statistical OfficeNote: P = Preliminary© RNCOS Page 17 of 81
  18. 18. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research3.4 EmploymentEmployment is increasing in Vietnam, making it an attractive market for retailing. Employedpopulation has source of regular income and they keep buying retail products regularly.Hence, employed population is more loyal and regular to their retailers. The employmentlevel has increased at a CAGR of about 2.88% for the period spanning from 2002 to 2007. Figure 3-8: Vietnam - Employment (in Million), 2002-2007E 45 43.8 44 43 42.6 42 41.3 in Million 41 40.1 40 39 39 38 38 37 36 35 2002 2003 2004 2005 2006E 2007ESource: International Labor Organization & Economic Intelligence Unit (EIU)The country is expected to witness rising employment in future. It is forecasted thatemployed population will grow at a CAGR of 2.42% during 2008-2012 to reach 49.4 Million bythe end of 2012.© RNCOS Page 18 of 81
  19. 19. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 3-9: Vietnam - Forecast for Employment (in Million), 2008-2012 50 49.4 49 48.3 48 47.2 47 in Million 46.1 46 44.9 45 44 43 42 2008 2009 2010 2011 2012Source: International Labor Organization & EIU© RNCOS Page 19 of 81
  20. 20. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research3.5 TourismVietnam is fast emerging as a preferred tourism destination. Tourist arrivals in Vietnamincreased at a CAGR of 15% during 2003-2007 to reach an estimated figure of 4.25 Million atthe end of 2007. Seeing this concrete growth, the Vietnamese government, as part of itseconomic plans, has earmarked the tourism industry as a key provider of growth in retailmarket. The expected increase in the number of tourists will boost retailing in Vietnam. Withthe local populace growing sophisticated and disposable incomes are rising, industry expertsview the coming period as a good time to set up international standard retailing outlets,especially in leading cities such as Ho Chi Minh City and Hanoi. Figure 3-10: Vietnam - Tourist Arrivals (in ‘000), 2003-2007E 4,500 4,248 4,000 3,583 3,468 3,500 2,972 3,000 2,429 in 000 2,500 2,000 1,500 1,000 500 0 2003 2004 2005 2006E 2007ESource: World Development Indicators & World Tourism Organization© RNCOS Page 20 of 81
  21. 21. RNCOS Vietnam Retail Analysis (2008-2012)Online Business ResearchFurther, tourist arrivals are expected to keep the Vietnamese retail industry in motion.Tourist arrivals are anticipated to grow at a CAGR of about 8% during 2008-2012. Figure 3-11: Vietnam - Forecast for Tourist Arrivals (in ‘000), 2008-2012 7,000 6,522 6,103 6,000 5,607 5,157 4,797 5,000 in000 4,000 3,000 2,000 1,000 0 2008 2009 2010 2011 2012 Source: World Development Indicators & World Tourism Organization© RNCOS Page 21 of 81
  22. 22. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research3.6 Consumer FinancingEasy consumer financing through credit cards and other related products in Vietnam make thecountry attractive destination for the retailers. Spending by cards is on the rise, which showsthat Vietnamese people have a positive attitude toward the use of cards as a paymentmethod. Consumers can easily afford the retail products, particularly consumer electronicproducts like Televisions and mobile handsets by using credit cards and other mode offinancing. Thus, the availability of easy consumer financing is fueling growth of retailing inVietnam. In 2006, total number of credit/debit cards increased by 50% annually. Figure 3-12: Vietnam - Credit/Debit Cards (in Million Units), 2004-2006 3.5 3 3 2.5 2 in Million 2 1.5 1 0.6 0.5 0 2004 2005 2006Source: Vietnam Economic Times - No.157 [2007-03-01]© RNCOS Page 22 of 81
  23. 23. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research3.7 Economic LiberalizationAlthough the government continues to exercise tight control over retailing, the sector hasbeen liberalized under the conditions of Vietnams membership of the World TradeOrganization (WTO). Foreign investors are permitted to contribute up to 49% of capital injoint ventures from early 2008. From January 1, 2009, Vietnams retail markets will be opento foreign investors, and wholly foreign-owned firms will be allowed to operate independentoutlets. Owing to competitive pricing structures and modern operating methods, thepopularity of large foreign firms will increase, putting intense pressure on domestic retailersto modernize. Foreign-owned retailers that have already been permitted to establish apresence are expected to expand their market shares in the coming years.Vietnamese retailers have recently established the Vietnam Distribution Association NetworkDevelopment and Investment Joint-Stock Company to enhance co-operation betweenmembers in anticipation of increased competition resulting from the WTO membership. Thegovernment believes that enhanced co-operation as well as mergers and acquisitions will helpto modernize the retail market.© RNCOS Page 23 of 81
  24. 24. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research3.8 Economic StabilityEconomic stability of Vietnam is also one of the key drivers of the retail market. Globalretailers feel risk-free and confident to penetrate and expand in Vietnam. Vietnam’s nominalGDP recorded growth at a CAGR of 14.8% during 2002-2007 to reach an estimated value of US$69.9 Billion at the end of 2007. Figure 3-13: Vietnam - Nominal GDP (in Million US$), 2002-2007E 80,000 69,892 70,000 61,707 60,000 52,832 in Million US$ 50,000 45,445 39,553 40,000 35,064 30,000 20,000 10,000 0 2002 2003 2004 2005 2006E 2007ESource: International Financial StatisticsThe nominal GDP of Vietnam is expected to grow at a CAGR of about 15.5% during 2008-2012to reach US$ 147.3 Billion by 2012 end.© RNCOS Page 24 of 81
  25. 25. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 3-14: Vietnam - Forecast for Nominal GDP (in Million US$), 2008-2012 160,000 147,277 140,000 125,877 120,000 108,893 in Million US$ 95,585 100,000 82,855 80,000 60,000 40,000 20,000 0 2008 2009 2010 2011 2012Source: International Financial Statistics© RNCOS Page 25 of 81
  26. 26. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4. Retail Market Performance4.1 Retail SalesThe value of retail sales in Vietnam has expanded rapidly over the past few years. It reachednearly US$ 30 Billion in 2007 from US$ 16 Billion in 2002 on account of increasing disposableincome, improving living standard and growing urban population. Food is the most importantcomponent of retail sales and accounts for about two-third of the total sales. Figure 4-1: Vietnam - Retail Sales (in Million US$), 2002-2007E 35,000 29,699 30,000 26,224 23,701 25,000 in Million US$ 20,691 20,000 18,420 16,167 15,000 10,000 5,000 0 2002 2003 2004 2005 2006 2007ESource: Planet RetailFurther, the retail sales are forecasted to grow at a CAGR of approximately 13.6% during2008-2012. The liberalization of retail sector under the conditions of Vietnams WTOmembership (foreign investors have been permitted to contribute up to 49% of capital in jointventures from early 2008. From January 1, 2009, Vietnams retail market will be opened forforeign investors and wholly foreign-owned firms will be allowed to operate independentoutlets), continuous rise in income level, growing urbanization and continuous cultural shifttowards the western markets will drive the retail industry in Vietnam.© RNCOS Page 26 of 81
  27. 27. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 4-2: Vietnam - Forecast for Retail Sales (in Million US$), 2008-2012 70,000 57,487 60,000 50,391 in Million US$ 50,000 44,334 39,011 40,000 34,528 30,000 20,000 10,000 0 2008 2009 2010 2011 2012Source: EIUThe total retail sales in Vietnam during 2007 were equal to 42% of nominal GDP - a valuemuch higher than that recorded in many other Asian countries, including China and Thailand.However, the retail sector officially accounted for just 12% of total employment in the sameyear. Figure 4-3: Vietnam, China & Thailand - Share of Retail Sales in Nominal GDP (%), 2007 45 42 40 35 35 33 30 25 % 20 15 10 5 0 Vietnam China ThailandSource: EIU© RNCOS Page 27 of 81
  28. 28. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.1 FoodFood is the most important component of retail industry. In terms of sales, it accounts forabout two-third of the total retail sales in the country. Food retail sales in Vietnam grew at aCAGR of around 11.6% from 2002 to 2007, reaching an estimated value of US$ 19.8 Billion atthe end of 2007. Food retailers account for around 80% of the overall retailing sector in termsof the number of outlets. Moreover, food retailing is dominated by wet markets andindependent grocers, with more than 80% of food retailers being independent grocers.In addition, wet markets are extremely popular in Vietnam and more than 2,500 of them arelocated in Ho Chi Minh City alone. Although the proportion of overall food sales accounted forby modern retail outlets is low, there has been some growth in the size of supermarket chainsand the number of hypermarkets. This is especially the case with Hanoi and Ho Chi Minh City,where consumers are increasingly moving away from traditional grocers and wet markets dueto lack of air-conditioning, cramped atmosphere and unhygienic spaces. Figure 4-4: Vietnam - Food Retail Sales (in Million US$), 2002-2007E 25,000 19,814 20,000 17,696 16,191 in Million US$ 14,300 15,000 12,880 11,453 10,000 5,000 0 2002 2003 2004 2005 2006 2007ESource: Planet Retail© RNCOS Page 28 of 81
  29. 29. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.2 Non-foodApart from food retail sales in Vietnam, non-food sales have grown at a rapid pace. Non-foodretail sales surged at a CAGR of nearly 16% during 2002-2007. Non-food retailers mainlyconsist of small-scale businesses focused on selling white goods, consumer electronics,clothes and cosmetics & toiletries. However, a large number of modern shopping complexeshas been opened in the main urban centers and they are attracting wealthy urbanites.Presently, non-food retailing represents nearly one-third of the total retail sales in Vietnam,but this share has started to increase, as high income consumers spend more on non-essentialitems such as clothing, electrical and DIY (Do-It-Yourself) goods. Figure 4-5: Vietnam - Non-food Retail Sales (in Million US$), 2002-2007E 12,000 9,885 10,000 8,528 in Million US$ 8,000 7,510 6,391 5,540 6,000 4,714 4,000 2,000 0 2002 2003 2004 2005 2006 2007ESource: Planet RetailNon-food retailing is basically driven by clothing, footwear and cosmetics & toiletriessegments. With rising income, consumers are becoming more fashion and look conscious andspending more on their clothing and cosmetic products. These three sub-segments togetheraccount for over 40% of the total non-food retail sales. For example - in 2007, clothing,footwear, and cosmetics & toiletries had a share of 16.5%, 17.7% and 6.9% respectively,making up for over 41% of the total non-food retail sales.© RNCOS Page 29 of 81
  30. 30. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 4-6: Vietnam - Non-food Retail Sales by Segment (%), 2007E 16.5% 17.7% 54.5% 6.9% 4.0% 0.2% 0.3% Clothing Footwear Cosmetics & Toiletries Perfumes & Fragrances Furniture Household Cleaning Products Others*Source: Planet Retail, Euromonitor & RNCOSNote: *Includes sales of products like Home Appliances, Personal Computers and Mobile Handsets etc.© RNCOS Page 30 of 81
  31. 31. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.2.1 ClothingAlthough the domestic garment sector in Vietnam is strongly export-oriented, local demandfor better quality garments has grown in line with rising brand-consciousness and consumer-oriented society. The domestic textile/garment industry’s clothing sales has been recordingannual growth of over 15% per year, absorbing one-fourth of its manufacturers production.Famous brand names, like Mango, Bossini, Gucci, Giordano, D&G, and Valentino, are nowavailable in the country but genuine label products are very expensive for most people.Moreover, popular brand goods, produced in China, for example - Bossini, Mango andGiordano, sell well in Vietnams big cities as the prices are not very high.In the wholesale markets of Tan Binh and Binh Tay in Ho Chi Minh City, one will find about70% of Chinese-made textiles and garments in medium to low in quality at relatively cheaperrates.Clothing sold in Tan Binh market ships to Central Vietnam, the Mekong Delta, Cambodia, Laosand Thailand. Local clothing retailers say that the Chinese garments are the cheapest andthose with a nice design sell very well. A Chinese shirt or T-shirt sells for VND 30,000-40,000,while a pair of jeans or khaki trousers sells for VND 70,000-90,000. Seconds are also availableand they come from China, selling at the cheapest rates - perhaps VND 5,000-10,000/item.These seconds are often sold in remote, rural areas and industrial zones and sell very wellbecause of attractive prices. Figure 4-7: Vietnam - Clothing Sales (in Million US$), 2002-2007E 2000 1632.1 1394.5 in Million US$ 1500 1192.9 925.0 1033.0 1000 790.7 500 0 2002 2003 2004 2005 2006E 2007ESource: Euromonitor© RNCOS Page 31 of 81
  32. 32. RNCOS Vietnam Retail Analysis (2008-2012)Online Business ResearchIn view of rising brand and fashion consciousness, increasing demand for quality clothes andhigh consumption, it is forecasted that clothing sales will grow at a CAGR of around 15%during the period spanning from 2008 to 2012. Figure 4-8: Vietnam - Forecast for Clothing Sales (in Million US$), 2008-2012 4,000 3,396.6 3,500 2,957.2 3,000 2,583.9 in Million US$ 2,500 2,235.1 1,946.1 2,000 1,500 1,000 500 0 2008 2009 2010 2011 2012Source: EIU© RNCOS Page 32 of 81
  33. 33. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.2.2 FootwearFootwear retail sales in Vietnam rose to US$ 1.75 Billion in 2007 at a CAGR of approximately15.6% from 2002. The domestic footwear market is fragmented with many small retailers,thus making it hard for producers who typically fill medium or large orders to accumulateprofits. However, the domestic demand for footwear is increasing and it needs around 160Million pairs of shoes a year, assuming each Vietnamese requires two pairs, according to theVietnam Leather and Footwear Association (VLFA). Figure 4-9: Vietnam - Footwear Sales* (in Million US$), 2002-2007 2000 1748.8 1800 1600 1494.1 1400 1278.1 in Million US$ 1200 1106.9 991.1 1000 847.2 800 600 400 200 0 2002 2003 2004 2005 2006 2007Source: EuromonitorNote: *Values are estimatedWith rising demand, footwear sales are expected to reach US$ 3.6 Billion by 2012, up fromUS$ 2.0 Billion in 2008, growing at a CAGR of nearly 15%. Impetus from the currentmodernization drive and a more streamlined logistical pattern will make the Vietnamesemarket more attractive to local and foreign players.© RNCOS Page 33 of 81
  34. 34. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 4-10: Vietnam - Forecast for Footwear Sales (in Million US$), 2008-2012 4,000 3,639.4 3,500 3,168.6 3,000 2,768.6 in Million US$ 2,394.9 2,500 2,085.1 2,000 1,500 1,000 500 0 2008 2009 2010 2011 2012Source: EIU© RNCOS Page 34 of 81
  35. 35. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.2.3 Cosmetics & ToiletriesRetail sales of cosmetics & toiletries rose at a CAGR of 16.5% during 2002-2007 to anestimated value of US$ 683.4 Million. The market for cosmetics and skincare products isexpanding on the back of fast improving living standards and extensive advertising campaigns.But the growth is still centered in urban areas and rural consumers are demanding for basicand affordable toiletries.Realizing the attractiveness and potential of the market, international brands have begun todeveloping the domestic market. For example - Lancôme, a luxury cosmetics brand, opened abeauty counter in a department store in Ho Chi Minh City in mid-2006, and has plans toexpand further. Considering the increasing brand-awareness among people, foreign cosmeticsproducers are keen to embark on joint ventures. Firms, with established joint ventures, suchas an Anglo-Dutch company Unilever, which operates through its subsidiary, UnileverVietnam, dominate the local market. However, smuggling and fake goods make it difficult tojudge the true size of the cosmetics and skincare products market. Figure 4-11: Vietnam - Cosmetics & Toiletries Sales (in Million US$), 2002-2007E 800 683.4 700 582.3 600 in Million US$ 496.1 500 429.8 374.7 400 318.9 300 200 100 0 2002 2003 2004E 2005E 2006E 2007ESource: EuromonitorRising income, increasing fashion consciousness, aggressive promotional campaigns, and entryof foreign players will drive the retail sales of cosmetics & toiletries in Vietnam. Resultantly,sales are expected to grow at a CAGR of 16.5% during 2008-2012.© RNCOS Page 35 of 81
  36. 36. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 4-12: Vietnam - Forecast for Cosmetics & Toiletries Sales (in Million US$), 2008-2012 1,600 1,502.2 1,400 1,280.9 1,200 1,096.0 in Million US$ 945.6 1,000 815.4 800 600 400 200 0 2008 2009 2010 2011 2012Source: EIU© RNCOS Page 36 of 81
  37. 37. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.2.4 Perfumes & FragrancesPerfumes & fragrances market in Vietnam is quite developed, and grew at a CAGR of around14.4% during 2002-2007. This growth will be further boosted by the government’s move oflifting cap on foreign investment. Figure 4-13: Vietnam - Perfumes & Fragrances Sales (in Million US$), 2002-2007E 18 15.5 16 13.5 14 11.8 in Million US$ 12 10.6 9.4 10 7.9 8 6 4 2 0 2002 2003 2004 2005 2006E 2007ESource: EuromonitorGovernment’s step to allow foreign investment and rising disposable income will push themarket to grow at a projected CAGR of about 14.6% from 2008 to 2012. Figure 4-14: Vietnam - Forecast for Perfumes & Fragrances Sales (in Million US$), 2008-2012 35 31.4 30 27.3 23.6 in Million US$ 25 20.7 20 18.2 15 10 5 0 2008 2009 2010 2011 2012Source: EIU© RNCOS Page 37 of 81
  38. 38. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.2.5 FurnitureFurniture manufacturing sector in Vietnam is mainly export-oriented but the domesticdemand is also mounting gradually. Due to rising living standard and rapidly growing middleclass population, the domestic furniture sales, both residential as well as commercial,increased at a CAGR of 11.8% from 2002 to 2007. Presently, the furniture industry in Vietnamis largely dominated by outdoor furniture market, but the demand for indoor furniture is alsogrowing rapidly; consequently, the production of indoor furniture is surging at a fast pace.Under such scenario, the demand for indoor furniture is expected to surpass the demand foroutdoor furniture in coming years. Figure 4-15: Vietnam - Furniture Sales (in Million US$), 2002-2007E 30 25.0 25 22.0 19.4 in Million US$ 20 17.4 16.0 14.3 15 10 5 0 2002 2003 2004E 2005E 2006E 2007ESource: EuromonitorThe domestic furniture market is projected to see growth at a CAGR of 14.32% during 2008-2012. The domestic demand is expected to spurt by increasing number of households andrising income level of higher middle class population in the forecasted period.© RNCOS Page 38 of 81
  39. 39. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 4-16: Vietnam - Forecast for Furniture Sales (in Million US$), 2008-2012 60 49.7 50 43.1 in Million US$ 37.6 40 32.9 29.1 30 20 10 0 2008 2009 2010 2011 2012Source: EIU© RNCOS Page 39 of 81
  40. 40. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.2.6 Household Cleaning ProductsIn 2007, household cleaning products recorded robust growth due to the increasedpenetration in suburban and rural areas. This penetration was mainly driven by domesticplayers who have extensive knowledge on consumer’s lifestyle, preferences and needs. Best-selling and standard household care products, such as laundry detergents and handdishwashers, are increasingly accepted by rural consumers, and are often competitivelypriced to raise sales. Rising awareness about hygiene in rural areas, as a result of severalcampaigns launched by the Vietnamese government, boosted the demand for household careproducts, especially those that have already attained relatively large exposure in urban areas. Figure 4-17: Vietnam - Household Cleaning Product Sales (in Million US$), 2002-2007E 450 395.5 400 360.0 350 328.3 302.0 in Million US$ 300 279.0 254.3 250 200 150 100 50 0 2002 2003 2004 2005 2006E 2007ESource: EuromonitorIncreasing hygienic awareness in rural areas and rising number of households will furtherboost the sales of household cleansing products. So the sales are forecasted to surge at aCAGR of 8.65% in the next five years from 2008 to 2012.© RNCOS Page 40 of 81
  41. 41. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 4-18: Vietnam - Forecast for Household Cleaning Product Sales (in Million US$), 2008-2012 700 614.5 600 566.1 523.2 480.2 in Million US$ 500 440.9 400 300 200 100 0 2008 2009 2010 2011 2012Source: EIU© RNCOS Page 41 of 81
  42. 42. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.2.7 Consumer ElectronicsDemand for consumer electronics has accelerated quickly in Vietnam, reflecting rising incomeand easier access to such products. The local consumer electronics manufacturing sector hasseen significant growth in the past few years largely because of high import tariffs on finishedgoods. Annual output growth in electronic goods has been impressive in recent years ataround 25% per year. Moreover, the number of joint ventures between leading foreignmanufacturers and local partners has increased as Samsung, Daewoo and LG of South Koreaand Toshiba, Sanyo and Sony of Japan - all are investing in the local production bases.The demand for consumer electronics and white goods is expected to expand further incoming years, as Vietnamese consumers become more active in this market and regard itemssuch as television sets, washing machines and refrigerators as necessities rather than luxuries.4.1.2.7.1 TV SetsThe sales of television sets in the country grew at a CAGR of around 5.5% in the last five years(2002-2007). This impressive growth in sales of TV sets largely stemmed from the risingnumber of households and easy access to consumer finance. The future is also expected tosee the same trend. Figure 4-19: Vietnam - TV Set Sales (in ‘000 Units), 2002-2007E 1400 1221.5 1126.0 1161.2 1200 1067.0 1105.9 1000 936.0 800 in000 600 400 200 0 2002 2003 2004 2005 2006E 2007ESource: Euromonitor© RNCOS Page 42 of 81
  43. 43. RNCOS Vietnam Retail Analysis (2008-2012)Online Business ResearchTelevision sales are forecasted to surge at a CAGR of approximately 6.4% during 2008-2012.Rising sales of LCD TVs will be one of the key factors driving growth in the Vietnamesetelevision market. Figure 4-20: Vietnam - Forecast for TV Set Sales (in ‘000 Units), 2008-2012 1,800 1650.4 1544.9 1,600 1446.1 1363.4 1,400 1287.7 1,200 in000 1,000 800 600 400 200 0 2008 2009 2010 2011 2012Source: EIU4.1.2.7.2 Mobile HandsetsAnother important consumer electronics product - mobile phone - has seen strong growth inrecent past. Vietnam consumed nearly 4.7 Million mobile phones in 2006 and roughly 6.3Million in 2007. Nearly 53% of mobile phones sold in the country in 2006 were camera phones.In value terms, Vietnams mobile phone market was estimated at US$ 877 Million in 2006 andUS$ 1,167 Million in 2007. Best-selling mobile phones in 2006 were priced at US$ 100-US$ 200per unit, while handsets with price tags of US$ 400-US$ 500 accounted for only 3-4% of thetotal sales in the same year.© RNCOS Page 43 of 81
  44. 44. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 4-21: Vietnam - Mobile Handset Sales* (in Million Units), 2006 & 2007 7 6.3 6 4.7 5 in Million 4 3 2 1 0 2006E 2007ESource: GfK Asia & Vietnam News AgencyNote: Estimated sales for 2006 and 20074.1.2.7.3 Personal ComputersThe sales of computer are rapidly growing in Vietnam, with nearly one million units sold inthe year 2006. The market is further expected to jump about 25% in 2008 over 2007, thanksto the country’s solid economic foundation and growing awareness and interest in IT in bothprivate and public sectors. Figure 4-22: Vietnam - Personal Computer Sales (in Million Units), 2006*-2008F 1.6 1.5 1.4 1.2 1.2 1 in Million 1 0.8 0.6 0.4 0.2 0 2006E 2007E 2008FSource: International Data Group & RNCOSNote: It is assumed that market grew by 20% in 2007 over 2006*Estimated data for 2006 and 2007© RNCOS Page 44 of 81
  45. 45. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.2.7.4 Video RecordersAs video recorders are being replaced by high-tech mobiles rapidly, the sales of videorecorder declined a massive 32.5% between 2002 and 2005, reaching 27,000 Units. Figure 4-23: Vietnam - Video Recorder Sales (in ‘000 Units), 2002-2005 45 40 39 40 35 33 30 27 in000 25 20 15 10 5 0 2002 2003 2004 2005Source: Euromonitor4.1.2.7.5 Washing MachinesThe demand for white goods, particularly washing machines, has seen a strong upsurge inrecent years. Sales of washing machines rose at a CAGR of over 12% from 2002 to 2007,reaching 98,000 Units at the end of 2007.© RNCOS Page 45 of 81
  46. 46. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research Figure 4-24: Vietnam - Washing Machine Sales (in ‘000 Units), 2002-2007E 120 98.0 100 87.0 77.0 80 69.0 62.0 in000 55.0 60 40 20 0 2002 2003E 2004E 2005E 2006E 2007ESource: EuromonitorFurthermore, washing machine sales in Vietnam are projected to grow at a CAGR of over 14%during 2008-2012. Rising disposable income and increasing accessibility due to rapidurbanization and consumer financing will propel the growth in washing machine sales duringthe forecasted period. Figure 4-25: Vietnam - Forecast for Washing Machine Sales (in ‘000 Units), 2008-2012 250 191.0 200 167.0 146.0 150 127.0 in000 112.0 100 50 0 2008 2009 2010 2011 2012Source: EIU© RNCOS Page 46 of 81
  47. 47. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.1.2.7.6 OthersRefrigeratorsThe annual sales volume of refrigerators in Vietnam stood at 181,500 in 2002 (latest availabledata), but since then, it has declined slowly. The penetration rate of refrigerators in 2000 wasabout 65% in Hanoi, 73% in Ho Chi Minh City and 10-40% in provinces and towns.Air ConditionersThe penetration rate of air conditioners is low, averaging 3-8% in 2002, with the highest ratein the southern part of the country.© RNCOS Page 47 of 81
  48. 48. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.2 By ProvinceThe retail sales of goods and services reflect the total sales of goods and services of businessestablishments (including commercial businesses, production units, farmers, hotels,restaurants, tourism, services held by individuals or organizations) retailed directly toconsumers in the market.Almost all the provinces in Vietnam are reporting high retail sales, thanks to rising disposableincome, increasing demand for consumer goods, surging consumer spending, rapidurbanization and growing brand- and fashion-consciousness.4.2.1 South EastThe retail sales of goods and services in Southeast Vietnam increased dramatically at a CAGRof around 19% during 2002-2006 to a preliminary value of VND 201.8 Trillion at the end of2006 from VND 101.1 Trillion in 2002. Figure 4-26: South East - Goods & Services Retail Sales (in Trillion VND), 2002-2006P 250 201.8 200 in Trillion VND 166.0 144.5 150 121.6 101.1 100 50 0 2002 2003 2004 2005 2006PSource: GSONote: P= Preliminary© RNCOS Page 48 of 81
  49. 49. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.2.2 Red River DeltaRed River Delta of Vietnam also witnessed a significant rise in retail sales of goods andservices at a CAGR of 20.5% from 2002 to 2006 to a preliminary value of VND 117.9 Trillion atthe end of 2006. Figure 4-27: Red River Delta - Goods & Services Retail Sales (in Trillion VND), 2002-2006P 140 117.9 120 96.4 in Trillion VND 100 79.3 80 66.1 56.0 60 40 20 0 2002 2003 2004 2005 2006PSource: GSONote: P= Preliminary© RNCOS Page 49 of 81
  50. 50. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.2.3 Mekong River DeltaThe retail sales of goods and services in Mekong River Delta of Vietnam surged strongly at aCAGR of around 21% during the period spanning from 2002 to 2006. Figure 4-28: Mekong River Delta - Goods & Services Retail Sales (in Trillion VND), 2002-2006P 140 115.6 120 97.5 in Trillion VND 100 76.3 80 63.9 54.0 60 40 20 0 2002 2003 2004 2005 2006PSource: GSONote: P= Preliminary© RNCOS Page 50 of 81
  51. 51. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.2.4 South Central CoastSouth Central Coast of Vietnam logged an impressive growth in retail sales of goods andservices at a CAGR of about 20.5% during 2002-2006. Figure 4-29: South Central Coast - Goods & Services Retail Sales (in Trillion VND), 2002-2006P 50 46.4 45 37.8 40 in Trillion VND 35 31.7 30 27.3 25 22.0 20 15 10 5 0 2002 2003 2004 2005 2006PSource: GSO© RNCOS Page 51 of 81
  52. 52. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.2.5 North Central CoastThe retail sales of goods and services in North Central Coast of Vietnam stood at a preliminaryvalue of VND 35.7 Trillion at the end of 2006 from VND 17.9 Trillion in 2002, representing aCAGR hike of nearly 19%. Figure 4-30: North Central Coast - Goods & Services Retail Sales (in Trillion VND), 2002-2006P 40 35.7 35 30.0 in Trillion VND 30 24.6 25 20.6 20 17.9 15 10 5 0 2002 2003 2004 2005 2006PSource: GSO© RNCOS Page 52 of 81
  53. 53. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.2.6 North EastThe retail sales of goods and services in North East of Vietnam also experienced robust growthat a CAGR of approximately 19% from 2002 to 2006, touching a preliminary value of VND 35.9Trillion. Figure 4-31: North East - Goods & Services Retail Sales (in Trillion VND), 2002-2006P 40 35.9 35 30.1 in Trillion VND 30 25.3 25 20.7 20 17.8 15 10 5 0 2002 2003 2004 2005 2006PSource: GSO© RNCOS Page 53 of 81
  54. 54. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.2.7 Central HighlandsLike other regions, Central Highlands also registered strong growth in retail sales of goods andservices. It grew at a CAGR of around 23% during 2002-2006 to a preliminary value of VND 21.3Trillion. Figure 4-32: Central Highlands - Goods & Services Retail Sales (in Trillion VND), 2002-2006P 25 21.3 20 17.4 in Trillion VND 15 12.9 10.5 9.3 10 5 0 2002 2003 2004 2005 2006PSource: GSO© RNCOS Page 54 of 81
  55. 55. RNCOS Vietnam Retail Analysis (2008-2012)Online Business Research4.2.8 North WestThe retail sales of goods and services in North West increased at a CAGR of about 21.5%during 2002-2006 to a preliminary value of VND 6.1 Trillion at the end of 2006 from VND 2.8Trillion in 2002. Figure 4-33: North West - Goods & Services Retail Sales (in Trillion VND), 2002-2006P 7 6.1 6 5.0 in Trillion VND 5 3.9 4 2.8 3.0 3 2 1 0 2002 2003 2004 2005 2006PSource: GSO© RNCOS Page 55 of 81

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