HCM City (VNA) - Convenience stores and minimarts have become increasinglypopular in the country, with more than one third of households shopping thereregularly, according to some analysts’ estimates.

If they reduce their prices further, they would have even more opportunities togrow, they said.

Le Viet Nga, deputy head of the Ministry of Industry and Trade’s domesticmarket department, said convenience stores have got a good reception from themarket, and now make up the fastest growing retail segment with double-digitgrowth.

“This is a modern trading channel, selling goods with clear origins and havinggood management. Convenience stores offer good opportunities for small andmedium-sized enterprises and farmers to bring their products into the market.”

According to the ministry, investors are also favouring convenience storessince their return on investment is much higher than traditional supermarketsor hypermarkets and investment is lower.

Besides, getting licences for convenience stores and minimarts is much easierthan for supermarkets since opening retail outlets of less than 500sq.m is notsubject to the economic needs test (ENT), it said.

Traditional retail channels still account for 72 percent of the market but thisis forecast to reduce to 60 percent by 2020.

In China, there is one convenience store for every 21,000 people, while thefigure is 1,800 in the Republic of Korea and 69,000 in Vietnam, meaning thereis immense potential for the segment to grow in the country, it said, addingthat the steady increase in incomes and changes in consumer behaviour are otherbig factors.

The number of convenience stores more than doubled in 2012-14 to 348. Thenumber of minimarts went up from 863 to 1,452.

In 2015 and 2016, convenience stores continued with their impressiveperformance, with local and foreign players like Saigon Co.op, Satra, Vingroup,B’s mart, Shop&Go and Circle K beefing up their presence as shoppers eyedconvenience while a robust economy increased their spending power.

For instance, Saigon Co.op, which owns Co.opmart, Co.opXtra and Co.op Food,last year launched Co.op Smile, a new retail model.

Saigon Co.op General Director Nguyen Thanh Nhan said plans are in theworks to increase the number of Co.op Smile stores to 200-300 by the end ofthis year from just 20 outlets last year.

Satra, which has a joint venture with Heineken in Vietnam, also plans to expandits retail system, with a focus on developing its convenience store chainSatrafoods to create a distribution channel for its subsidiaries like meatproducer Vissan and Vietnamese producers in general.

This year it will open 55 Satrafoods stores, including 10 in the Mekong Deltacity of Can Tho alone, raising the total number to 172.

According to the ministry, foreign enterprises have a 70 percent market shareof convenience stores, 17 percent of malls and supermarkets, 15 percent ofminimarts and 50 percent of the online shopping channel.

According to insiders, the biggest disadvantage for convenience stores and minimartsis their higher prices compared to supermarkets, traditional markets, andgrocery stores.

To improve their competitiveness, they must reduce prices and sell qualitylocal products, they said.

Vu Vinh Phu, chairman of the Hanoi Supermarkets Association, said domesticproducers and distributors should develop closer links to cut intermediarycosts.

According to the Global Retail Development Index (GRDI) from consulting firmA.T. Kearney, Vietnam has been in the top 30 most attractive retail markets since2008.-VNA