Japanese retailers have continued their expansion in Vietnam, but Korean investment has gone the other way amid fiercer competition.
Uniqlo is set to launch a new shop at Aeon Mall Hai Phong in Le Chan district, the northern port city of Hai Phong on Friday. This is the Japanese casual wear retailer's 12th store in Vietnam.
Previously, the company in April opened a shop of more than 3,000 square meters at Saigon Center, right at the heart of Ho Chi Minh City. Uniqlo said the 11th store played an important role in the brand’s expansion strategy in the Vietnamese market, where the first Uniqlo store opened in late 2019, also in the southern megacity.
Uniqlo Vietnam CEO Osamu Ikezoe has repeatedly told local media that its business has gone beyond expectations. “The 12th store marks another milestone in our development strategy and long-term commitment to Vietnam,” he said in a release.
Having expanded like Uniqlo, Aeon Group plans to open an additional 16 shopping malls in the country by 2025, including three or four in Hanoi. Aeon Mall Vietnam CEO Nakagawa Tetsuyuki said on May 13 the giant has approved this plan.
“Aeon is prepared to break ground for Aeon Mall Hoang Mai in Hoang Mai district in the third quarter of this year as investment procedures near completion. Homework is underway for another mall in Bac Tu Liem district in the capital," Tetsuyuki said while meeting with Hanoi’s Party Chief Dinh Tien Dung.
The Japanese giant in 2020 stated that it would invest $2 billion expanding its presence across Vietnam, eyeing a total 25 malls by 2025 – a bold move aimed at the country’s growing middle class. The group is operating six malls in the country - two in Hanoi, one in Hai Phong city, two in Ho Chi Minh City, and one in nearby Binh Duong province.
Aeon entered the Vietnamese market in 2013, with the first mall located in HCMC. Last May, Aeon Mall Vietnam signed a memorandum of understanding (MoU) with Dong Nai province’s administration on developing shopping malls there, with the first in Bien Hoa town, about 35 kilometers northeast of HCMC.
Three months before that, the company signed an MoU with Thua Thien-Hue to do market research for opening a mall in the central province, which is likely to cost $160 million. Aeon has also prepared for the construction of a $190-million mall in Bac Ninh province next to Hanoi.
Meanwhile, Muji, a major Japanese retailer of household products and clothing, opened its third store in Vietnam in late April this year at AEON Mall Long Bien in Hanoi.
"It has been almost a year since we inaugurated the first store in Hanoi, and following its success, we are thrilled to open the second store in the capital," MUJI Vietnam CEO Nagaiwa Tetsuya said.
Muji launched its first Vietnam store in November 2020 in HCMC. The company said it focused on the country’s two largest markets, Hanoi and HCMC, to build brand awareness. It envisages 10 stores in all the nation, home to almost 100 million in population, with the timeline and total investment undisclosed.
Korean shrinkage
Meanwhile, E-mart, South Korea’s largest retailer, started to exit its Vietnam business last year by transferring the business to Thaco, one of the country’s biggest private conglomerates and a leading player in the local auto market.
E-mart said about $60 million had been invested in the first hypermarket and the two sides did not publicize the deal’s value. Thaco continues the franchising business without changing the brand.
The Korean giant launched its first Vietnam discount store in December 2015, located in HCMC’s Go Vap district near Tan Son Nhat International Airport. It is still the only one in the country despite the Korean company’s network expansion efforts.
Thaco in February said it planned to open two new E-mart stores in HCMC this year, followed by expansions to neighboring Dong Nai and Binh Duong provinces and Hanoi next year.
Lotte Mart Vietnam, in last July, closed its Lotte Mart Dong Da mall in Hanoi, which the Korean retailer said was part of its restructuring scheme in the Vietnamese market. Two other Lotte Mart malls in the capital, in Ba Dinh and Cau Giay districts, are still open, and its Vietnam system has 14 operational malls.
Three months before that, Lotteria Vietnam, which is part of food unit Lotte GRS of the Seoul-based Lotte Group, denied reporting from Korean media at the time that Lotte GRS was leaving the Vietnamese market.
After the Lotteria Vietnam denial, Lotte GRS made clear from Korea that it was leaving just the Indonesian market and continuing with its franchise and food retail business in Vietnam.
Lotte GRS added its Vietnam business was facing problems due to a halt in facility construction and delays in the import of equipment caused by the pandemic.