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BUSINESS REPORT

grocery stores typically call over 50 wholesalers NUMBER OF OUTLETS, FLOOR SPACE, AND SALES GROWTH FOR SUPERMARKETS
and distributors to place orders. Deliveries (2014-2019)
can sometimes take more than a week to
arrive. However, “one recent observation is 3,450 16%
that a number of traditional grocery retailers 14% 2,734
have also begun to make improvements to 12% 2,285
their store infrastructure, invest in technology, 8% 10%
and increase their product assortment to 8% 1,487 1,619
include higher quality products, to appeal to 1,220 1,032 1,343 1,672 1,403 1,436
consumers who desire an experience in mod- 605
ern retail,” the report noted.
With the ambition of changing the domestic
traditional retail landscape, VinShop aims to 2014 2015 2016 2017 2018 2019
be a pioneer in revolutionizing the grocery
system in Vietnam. “In order to realize this Number of outlets Floor space (thousand sq m) Sales growth
goal, we have been using technology to resolve
retailers’ problems, from inputting goods, track- Source: Euromonitor, Deloitte, 2020
ing incentives, and owning free tools to manage
merchandise and revenue, to advanced financial
solutions,” Ms. Phuong told VET. “Our target GROCERY RETAIL SALES IN VIETNAM IN 2019, BY CHANNEL ($ MILLION)
is to achieve total transaction value of $1 billion
by the end of 2021 and become one of the
largest distribution channels in the market.” 50 44.26
GT Link is also completing its ecosystem
with 200 brands / manufacturers, 600 dis-
tributors, and 40,000 grocery stores nation- 40
wide, and it plans to raise this to 80,000
stores and more than 20 million end-users
by 2022. It clearly defines its mission as being 30
to transform traditional retail channels and
upgrade grocery stores in the long term.
Meanwhile, Telio is planning to push its 20
market share higher and technology further
to revolutionize the distribution value chain.
“Telio will this year invest more in the tech- 10
nology platform, adding functionalities to 2.45
make retailers’ business easier,” Mr. Phong 0.19
said. “We are targeting to serve at least 50,000 0
Traditional
retailers in Hanoi and Ho Chi Minh City, grocery retailers Supermarkets Hypermarkets Convenience
Stores
together with expanding our offers in other
major cities in Vietnam. We are also launching Source: Euromonitor, Deloitte, Statista, 2020
other verticals apart from FMCG, targeting to
make Telio a true B2B platform.”
Thanks to the rapid increase in internet not so aggressive, Mr. Christou commented. deploy services. “There are good signs in the
penetration in Vietnam, using technologies Technical issues might occur, and in order to market, though, as since the end of last year
for mom-and-pop shops is no longer something smooth the process and user experience for more and more players have joined, especially
new and it has already seen success in other shop owners / suppliers, huge investment is retail giants, which will help educate the mar-
Asian markets where traditional trade is still needed not only to set up the platforms but ket faster,” he said. “We believe this is not an
one of the key shopping channels, according also to maintain and upgrade them and provide issue in terms of market coverage, but that
to Mr. Christou from Kantar. Even in Vietnam, better customer services in the context of whoever takes care of their customers better
he observed, some players have started to more players arriving. will win in the end.”
heavily invest in this model recently, but some Despite the high penetration of smart- As such, Mr. Christou recommended key
disappeared after just a few months, indicating phones and mobile internet in Vietnam, retail- players in the market educate or train shop
that there are both opportunities and challenges ers remain one of the slowest adopters of owners about the benefits of joining a network.
in implementing this kind of operating model. new technologies, so it will be more difficult Installation is important but maintenance and
to convert traditional transactions to digital- customer service is more crucial to success.
Hurdles to surmount ization, according to Mr. Phong. Nevertheless, Moreover, they should offer support and
The biggest challenge is that shop owners, with a strong technology products team, Telio incentives / reward programs to shop owners,
particularly older owners in rural areas, are is developing easy-to-use platforms for its to increase loyalty and expand networks.
not familiar with tech-related matters so are customers in parallel with providing Telio Finally, technology developers need to embrace
less likely to try new things, especially when over Zalo (the retailer’s daily app), in order partnerships and cooperation between part-
their business is still doing well. Street shop to foster adoption. ners, as this plays a significant role in developing
formats are still growing year after year in Similarly, Mr. Kien from GT Link said the digital retail ecosystem and in communi-
terms of FMCG value sales and in rural areas most grocery store owners are older and not cating with consumers in order to increase
where the competition with modern trade is technologically-savvy enough to access and awareness about the concept. %

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