Page 34 - Layout 1

BUSINESS REPORT

teams, or trucks, but rather links available
resources to serve actual needs, including
manufacturers, distributors, grocery stores,
and consumers. In addition to tech solutions,
GT Link also indirectly helps them resolve
outstanding problems like warehouse man-
agement, inventory, sales teams, delivery, and
logistics, and provides an operations manage-
ment system to enhance the user experience.”
Meanwhile, another Vietnamese e-com-
merce B2B startup, Telio, was born to connect
micro-retailers with brands and distributors
on a centralized platform. Its smartphone
app enables retailers to order products from
a range of fast-moving consumers goods
(FMCG) brands and distributors, providing
affordable pricing and an efficient supply
chain. The company is building a network of
warehouses to ensure 24-hour delivery and
is assisting shop owners to better manage
their cash flow and inventory management.
Telio is now empowering more than 12,000
PHOTO: VIET TUAN
retailers in Hanoi and Ho Chi Minh City on a
monthly basis. “It has also partnered with
more than 80 international and local brands
Tradition meets modernity to help them with optimal distribution,” said
Telio founder Mr. Bui Sy Phong. “Trading
volumes and its customer base are growing
Given the dominance of the traditional trade model, tech developers are 20 per cent each month. It is leveraging tech-
competing to accelerate e-commerce for mom-and-pop grocery stores in nology in order to bring greater efficiency,
Vietnam’s retail market. convenience, and transparency to the tradi-
tional distribution value chain.”
T HONG NHUNG rEPOrTS
Revolutionizing tradition
Vietnam’s retail market remains frag-
ocated down a small alley on Tran City, the southern region, and the Red River mented and dominated by bricks-and-mortar
Xuan Soan Street in Ho Chi Minh City’s Delta in the north. shops and grocery stores. Traditional traders
L District 7, the mom-and-pop shop of “Our ‘weapon’ is to bring new technology contribute about 70 per cent of FMCG sales
Mr. Dang Van Thang and his wife sells sin- to change the habits of traditional stores,” in key urban areas and more than 95 per cent
gle-use packets of daily consumables such as said Ms. Truong Quynh Phuong, Business in rural areas, according to Kantar Wolrdpanel.
shampoo, coffee, and food spices, among Development Director at the One Mount “Traditional trade’s value share has been
other items. “We’ve opened our doors from Group, a member of Vingroup. “The VinShop shrinking over the last few years, given the
early morning until late every day for the last app conveniently connects shop owners and ongoing expansion of modern trade, with
ten years,” Mr. Thang said. suppliers, using technology to break down emerging retail formats such as minimarts
His business has now become a little easier geographical barriers and offering solutions and convenience stores, especially in urban
to run compared to previous years after he to resolve market bottlenecks, especially in areas,” said Mr. Peter Christou, Commercial
bought merchandise management software distribution chains. It quickly became a bright Director at Kantar Worldpanel Vietnam. “Tra-
and started using apps to connect with suppliers spot in Vietnam’s retail market, as the first- ditional channels are still growing in terms
and manufacturers. Many other grocery store ever B2B2C model in the country.” of value sales and have maintained positive
owners have done likewise, adopting modern Before VinShop, other apps had been performance, mainly driven by street shop
technology to run their business, and this has introduced to the market using similar tech- formats like grocery stores or mom-and-pop
gradually been changing Vietnam’s traditional nology but with a few different utilities. Tech shops, which account for over 50 per cent of
retail landscape and triggered a new race in project Bach Hoa Viet, which belongs to the the FMCG retail share in urban key cities
tech development in the segment. K-Group JSC, launched General Trade Link and three-quarters in rural Vietnam.”
(GT Link) in March last year, a multi-tasking Despite the rapid expansion of modern
Rapid coverage distribution platform for products and services trade outlets around Vietnam, traditional
Vietnam’s largest conglomerate, Vingroup, combining the online-to-offline (O2O) model grocery retailers still have an important role
launched a mobile app three months ago for and part of the sharing economy model. to play in the overall retail market and continue
bricks-and-mortar retail outlets, aiming to “This is the starting point of our goal for to exhibit steady growth. Vietnam’s traditional
digitize a traditional business upended by the traditional retail market,” said Mr. Vu grocery sales grew 4 per cent in 2019 to
modern convenience stores. The group Trung Kien, Deputy CEO of K-Group. “Vietnam $44.34 billion, according to a Deloitte report.
announced that its VinShop app was being has over 40 million smartphone users, 4G Vietnamese shoppers prefer to shop at
used by 65,000 small shops in 20 cities and networks, and broad knowledge among people local stores or street vendors but micro-retail-
provinces around Vietnam as of the end of about tech platforms. GT Link does not invest ers have limited supply chain visibility for
last year, primarily in Hanoi and Ho Chi Minh in goods, warehouses, sales staff, delivery product availability, pricing, and quality. Small

32 | VIETNAM ECONOMIC TIMES | FEBRUARY 2021