7 Eleven opens first store in HCMC
7Eleven finally opened its first store in Vietnam, at the Saigon Trade Center, District 1.
The retail competition in Vietnam is heating up at a fast pace. Many international and local brands are now competing for Vietnamese customers.
Here under a non-complete list of retailers operating in in Vietnam.
Convenience: CircleK, Familymart, 7Eleven, Bsmart, Shop&Go, Zakkamart, Vinmart+
Supermarkets and Hypermarkets: Big C, Lotte, MegaMarket, Auchan, Vinmart, Citimart
Premium or Specialized: Annam Gourmet, K Mart
The Vietnamese retail market is still far from maturity, what does this mean? There won´t be enough space for everybody, there will be casualties, there will be mergers and acquisitions.
A retailer is a brand, which means it must follow the same rule than any product, services or company that needs to connect with an audience.
You cannot satisfy every customer segment, you must target the one segment you can serve better than your competitors.
The objective value difference between each retailer in Vietnam is quite low. Except in the specialized category where I must say Annam is doing the job perfectly in targeting the more affluent expat and Vietnamese population.
Too many of them are trying to occupy the low-cost segment of cash-strapped customers, with no real added value or differentiation strategy compared to the competitors next door. There are others strategical options worth considering.
In the everyday more competitive Vietnamese retail industry, it is more important than ever that each retailer position itself in the mind of the customer.
Retailers must differentiate to own a strong place in customer’s mind. Even if it means creating a new artificial segment, it is better to be the leader of a smaller category than third of a bigger one.
To tackle the Vietnamese rising middle class’s concerns regarding the quality of the food they provide to their family.
I believe that a great strategy for a local retailer is to position himself as the one with a strong focus on safety enforced by:
- A strict control of the whole supply chain
- Clean markets
- Staff training (in and off-market) to increase safety awareness
- Heavy communication to health-conscious customers
Obviously, if a retailer selects a positioning strategy, the brand must deliver a customer experience that is consistent with the marketing promise. Communicating is not enough, to create loyalty you must deliver what was agreed.
Vietnamese consumers are becoming more and more concerned about their health. When shopping food and beverage goods, the huge rising middle class will soon shift from price-sensitive to brand/safety sensitive.
They represent a huge market opportunity, but retailers must start shifting now to benefit from the first mover advantage.