Follow Vingroup’s footprint
In October 2017, T&T Group under the chairmanship of Do Quang Hien suddenly established T&T Consumer Company to develop and manage the Qmart-branded supermarket chain with the goal of nationwide coverage.
Just over two months after brand introduction, T&T Consumer opened four new Qmart and Qmart+ supermarkets in Hanoi.
In particular, two Qmart supermarkets are located at No. 440 Vinh Hung and No. 10 Nguyen Duc, covering an area of 700 square metres each. Two Qmart+ supermarkets are located at No. 344 Kham Thien and No. 164 Tran Quang Khai with an area 100 square metres each.
A representative of T&T Group revealed on its website that in the future, the group will open additional Qmart supermarkets to facilitate its customers.
T&T Group's participation at lightning speed in the retail market recalls the public of the way Vingroup had gone when it announced its acquisition of the Oceanmart supermarket chain owned by Ocean Group at the end of 2014.
Soon after, Oceanmart was renamed Vinmart and continually expanded its network at tremendous speed. Vinmart also expressed its ambition from the start when it announced plans to build a retail distribution network of 100 supermarkets and a chain of 1,000 convenience stores over Vietnam in just three years.
In June 2015, Vingroup had 16 supermarkets and 35 convenience stores, by the end of December 2017, there were 65 supermarkets and more than 1,000 convenience stores in 26 provinces, becoming a large-scale retail chain in Vietnam. Vingroup has set an ambitious goal to open 200 supermarkets and 4,000 stores by 2020.
In the history of retail distribution industry in Vietnam, none of the enterprises can achieve both size and speed of growth as Vinmart. And when T&T group stepped into the market, it's hard for T&T to avoid competing directly with this 'brother'.
T&T Group is a big real estate investor and is developing many real estate projects from the north to south of Vietnam. Therefore, it has many advantages to access to locations serving the opening of supermarket. For instance, the first Qmart supermarket located at No. 440 Vinh Hung street was opened at the first floor of T&T Riverview apartment building developed by T&T Land, a member of T&T group. This is an advantage just a few retailers have.
Locating supermarkets and stores in T&T Group’s projects has not only increased the value but also generated profits in case of effective investment. This is also the strategy that Vingroup has implemented effectively through supermarket chains such as Vinmart, Vinmart+ and Vincom trade centre integrated into the housing projects.
The fierce battle with foreign retailers
Despite its advantages and successes in many areas, T&T Group is just an "amateur" and newbie in the retail market with the extremely fierce competition where even local veteran retailers are struggling to maintain their position against the massive influx of foreign large retailers.
With more than 90 million people of which nearly 40 per cent are urban residents, Vietnam is considered one of the most dynamic and attractive retail markets in Asia and around the world.
In particular, with the opening of the market under the integration commitments, the increasing participation of the world’s large retailers in Vietnam is placing great pressure on competition in this field.
Qmart now competes with not only local brands such as Vinmart or Saigon Co.op but also numerous foreign giants.
Notably, 'big man' Aeon Mall is clearly showing its ambition to expand aggressive investment in Vietnam. Aeon Mall announced the opening of the second Aeon trading center with investment capital of US$192 million in Hanoi, which is expected to operate in 2019.
This is also the fifth commercial centre of Aeon Mall in Vietnam after the group successfully conducted the pilot of the central business model combining shopping and entertainment. However, compared with its target, the group has only completed one-quarter of the way to set up a total of 20 trade centres in Vietnam by 2020.
Besides, Aeon has also stepped up its cooperation and acquisition of the existing supermarkets in the country with the target of 100 trade centres. Aeon owns a 49 per cent stake in Citimart, which was renamed AEON Citimart and a 30 per cent stake in Fivimart.
Takashimaya, another major retailer in Japan, has invested US$47 million in Vietnam since 2012, including Saigon Center and many other real estate properties.
7-Eleven, Japanese convenience store chain, also stated that it would open more 20 stores by 2017 and increase to 100 stores in the next three years.
Earlier, Big C supermarket acquired by the Central Group of Thailand at the price of US$1.14 billion continues to consolidate its position by constant expansion. Convenience stores such as Circle K and Family Mart have also expanded in HCMC and Hanoi.
Most recently, the convenience store chain of Korea GS25 was also officially present in Vietnam when opening its first store in HCMC. The goal of GS Retail and Son Kim Land is to open 2,500 stores in Vietnam in the next 10 years.
The massive participation of foreign players puts the domestic retailers ahead of the intense competition in their home markets. The failure of previous supermarket chains such as Oceanmart, Hiway Supercenter is still a costly lesson that not all of the retailers can overcome.
Foreign retailers have advantages over Vietnamese ones in management skills and capital. Their parent companies are global retail giants who have a large amount of capital and often have a loss-making strategy to gain market share and build brand before gaining profit in Vietnam.
The acceleration of domestic existing retailers together with the expansion of foreign brands have put Qmart and Qmart supermarket chain in a tough battle ahead.