All 23 Fivimart stores will be intergrated into Vingroup’s system and renamed to Vinmart soon.
According to Vingroup's annoucement, the deal is a part of its market expansion plan of having 200 VinMart supermarkets and 4,000 VinMart+ convenience stores by 2020.
The value of the deal is not disclosed. After buying 100 per cent of supermarket chain Fivimart from Nhat Nam JSC, Vingroup will integrate all 23 Fivimart stores into its system and rename it to Vinmart soon.
The typical items of the Vinmart chain will be added to these stores, including VinEco agricultural products, preliminary processing and processing products VinMart Cook and consumer goods VinMart Home.
After taking acquisitions, VinCommerce becomes the biggest retailer in Vietnam with 100 supermarkets and 1,400 convenient stores.
Thai Thi Thanh Hai, CEO of VinCommerce said: “VinMart and VinMart+ not only appear in Vinhomes residential areas and Vincom trade malls but will also be expanded across Vietnam. The acquisition of Fivimart is one step in realizing our plan.”
After ten years appearing with most stores in Hanoi, Fivimart is one of the famous supermarket chains with supermarkets located in convenient locations.
In early 2015, Japan's Aeon retail group acquired a 30 per cent stake of Fivimart, which is one of the new moves in abroad investment strategy of the Aeon Group.
It was hoped that the partnership would help Fivimart develop more and more when it was supported by the Japanese management system. The presence of Fivimart supermarkets within the Aeon shopping malls along with their logo was expected to help sale increase as well as ensure the Japanese quality of goods sold.
However, Aeon's promise does not come true. After three years of shaking hands with the Japanese business, Fivimart is still stuck in expanding its stores and its results are not good.
According to Fivimart's financial report for 2016, this supermarket system reported a loss of $4.2 million in 2016, almost double that of 2015. After two years of cooperation with the Japan's group, Fivimart's accumulated loss had risen to nearly $7.5 million.
The main reason for Fivimart's loss was that the huge cost of business management which was higher than the gross profit from the sale of goods in supermarkets. Specifically, in 2016, business management costed more than $12 million while gross profit was only $7.9 million. The same thing happened in the previous year.
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