Omnichannel to thrive in Vietnam retail sector: Deloitte

Most urban Vietnamese consumers are already used to omnichannel purchasing, making this modern retailing method a clearer trend in the country, according to Deloitte Vietnam.

“In the years ahead, Vietnam’s retail sector is expected to experience a rapid rebound. We believe that at least some of the new omnichannel habits will become permanent as consumers grow accustomed to the convenience that they offer,” Vu Duc Nguyen, head of consumer industry at the professional services firm, said in a new sector report.

Omnichannel retail is an expansion of what was previously known as multichannel retailing. It optimizes multiple sales channels while bringing about a high level of integration.

The Deloitte Vietnam report, issued Wednesday, also pointed out other trends. “Looking ahead, we also expect two other developing trends to continue to play out in the retail sector, with wide-ranging, long-term knock-on effects. They are accelerated uptake of digital wallets and non-cash payments; and growth in the wholesale e-commerce segment,” said Nguyen.

The two trends are supported by government incentives, including the National Digital Transformation Program to 2025, with a vision to 2030, which sets a target that over 50% of the Vietnamese population would have an electronic payment account by 2025, and over 80% by 2030.

In addition, Vietnam’s wholesale e-commerce segment is expected to experience a boom as the nation is currently the fastest growing business-to-business e-commerce market in Southeast Asia, with a market value of $13.2 billion in 2020, and is expected to see a compound annual growth rate of 43% through 2025.

The report said these trends were based on digitization of Vietnam’s retail sector, a process of wide-ranging digitization of the entire retail supply chain, not just limited to business-to-consumer retail, or from shopping to delivery and payment.

At present, Thailand’s Central Retail is eyeing the No.1 Omnichannel platform in food and property in Vietnam via its new investments of 30 billion baht (around $800 million) into the country between this year and 2026.

Announcing this new sum in Bangkok this July, Central Retail Vietnam CEO Olivier Langlet said his company expected to sales to hit 100 billion baht (about $2.76 billion) during the period, doubling the firm’s omnichannel sales penetration to 15%, and expanding its presence across 55 of 63 provinces in the nation, from 40 at present.

Meanwhile, Thai supermarket chain MM Mega Market also wants to become the number one wholesale food retailer in Vietnam, MM merchandise director John Lee told The Investor late this September.

TCC Holding, part of TCC Group, which is controlled by Thai beer tycoon Charoen Sirivadhanabhakdi, acquired German retailer Metro’s Vietnam unit in 2015 for 655 million euro ($704 million), and renamed it MM Mega Market in early 2017.

In March 2022, TCC’s retail unit Berli Jucker announced it planned a total investment budget of 60-70 billion baht (up to $1.94 billion) for Southeast Asian expansions in the 2022-2026 period, with an average of 12-14 billion baht (about $387 million) per year. Of the total, 70% will support retail business, while 30% will go to packaging, consumer products and healthcare. As for Vietnam, the firm said it would add 88 MM Food Service outlets in the five years. The outlets are smaller in size than its department store brand MM Mega Market.