[A $2 Billion Investment Plan] Why Do Japanese Retail Giants Value Vietnam So Highly?

In recent years, Vietnam has not only attracted significant foreign investment for factory establishment, but also drawn many renowned international fashion brands such as Uniqlo, MUJI, and Zara to open stores and gain popularity among Vietnamese consumers. Even milk tea chains commonly seen on the streets and alleys of China have now opened in Vietnam!

This shows that, with the rapid pace of domestic economic growth, global companies have maintained strong expectations for Vietnam’s future consumer market potential.

Moreover, Japanese retail giant AEON announced at the end of last year that it plans to invest USD 2 billion to open 20 shopping malls in Vietnam by 2025. It is expected that a new mall will be constructed in Ho Chi Minh City within the next year.

AEON is one of the largest retail groups in Japan and even in Asia, and it has consistently ranked among the top 500 global retailers for many years.

Since entering the Vietnamese market in 2014, AEON has opened six AEON shopping centers across the country. The group’s ambitions have never been limited to just establishing large-scale commercial centers.

According to Mr. Nishitohge Yasuo, General Director of AEON Vietnam, in addition to malls, AEON plans to introduce various types of specialty stores to the local market, such as the MaxValu food supermarket chain.

After conducting market research, AEON decided to establish around 100 MaxValu food supermarkets in Hanoi, as the city lacks a large number of modern supermarkets and has a massive population and growing middle class—factors that contribute to a strong demand for convenient, first-class urban shopping environments.

AEON is not alone—many other Japanese retail giants have also publicly expressed optimism about the Vietnamese market.

In the second half of last year, Matsumoto Kiyoshi, Japan’s largest pharmacy chain, opened its first store in Vietnam in Ho Chi Minh City.

At the press conference announcing its official entry into Vietnam, a Matsumoto Kiyoshi representative shared that, according to company analysis, the number of Vietnamese consumers shopping at Japanese pharmacies in 2017 and 2018 increased by more than 150% compared to previous years!

Matsumoto Kiyoshi plans to open around 10 stores in major Vietnamese cities over the next 3 to 5 years, with each store ranging in size from 500 to 2,000 square meters. These numbers make the company highly optimistic about the future of Vietnam’s consumer market.

Today, with its rapidly growing economy, the standard of living for Vietnamese people is steadily improving.

According to official statistics from the General Statistics Office of Vietnam, in Q4 2020, Vietnam's retail and service revenue reached nearly USD 60 billion—up 6.4% from the previous quarter and 8% year-on-year.

In 2020, the annual growth rates for local wholesale and retail, finance, logistics, hospitality, and food service industries were 5.53%, 6.87%, 1.88%, and 14.68%, respectively.

Looking ahead, can Vietnam become a key growth driver of the global consumer economy as expected? What kind of model do you think Vietnam will represent in the future?