Vingroup to focus on its retail business
One of Vietnam’s biggest conglomerates, Vingroup, increasing the importance of its retail business. Currently, this line of this corporation makes up around 20% of total revenues.
Recently, Pham Nhat Vuong, the Vingroup’s Chairman, revealed that the conglomerate is making retailing a core business. He mentioned that the management believes retail could add up to 50% of group’s total sales in the years to come.
In the first half of 206, Vingroup’s revenue doubled to more than 1 billion USD, with the net profits reaching the 130 million USD limits. These results already met 98% of the company’s full-year target.
The conglomerate attributed the strong growth in the first half of the year due to a significant increase of 226% in retails sector, followed by 59% growth in tourism. Education and health care also had high growth rates, 57% and 53% respectively. The real estate segment, the main contributor to overall revenue, increased by 31% to around 200 million USD.
According to Mr. Pham: "We do grasp any chance to take locations and open retail outlets, even if 30% of the locations may be unprofitable for a few years. We have to expand our presence as broadly as we can before big foreign retailers spread into the market". He also added that the conglomerate will focus on second- and third-tier cities, as well as smaller rural towns, with the aim to have more than 10,000 convenience stores, and 400 shopping malls across Vietnam in the next three years.
Vietnam's retail market is expected to grow to more than $150 billion within four years. International players, including shopping mall operators Lotte, Aeon, E-mart, Auchan, Takashimaya, Metro and Big C, and convenience store chains such as Family Mart, Shop&Go, 7-eleven, Ministop and Circle K are all pushing into the country.
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