Retail demand steps up
Vietnam’s retail market is seeing signs of recovery, and industry insiders are expecting a boom in sales in the remaining months of this year.
Rice and cereal retailer Que Viet last month received 9,200 orders in an online flash sale campaign on June 6, nearly eight times what it gets on a normal day.
Other online vendors also experienced a similar surge in sales last month, according to data analysis firm YouNet ECI, which looked at over 24,000 vendors on e-commerce platforms Shopee, Lazada, and Tiki.
It found that the gross merchandise value of smartphones jumped by 49% from May to VND745 billion (US$31.49 million), the highest since November.
Other categories that saw double-digit growth included shower gel (20%), baby formula (19%), and TV sets (13%).
In the year-to-date baby formula has seen record sales of VND149 billion.
Nguyen Phuong Lam, director of market insights at YouNet, said brands are currently "testing the waters" to make predictions for end-of-year demand.
"The results were positive. We can expect a boom in sales on e-commerce platforms at the end of the year."
TikTok Shop Vietnam earlier this month said 90% of its users plan to shop during upcoming sales campaigns.
"This is a promising shopping season for the whole market, not just us," a company spokesperson said.
Over the first six months retail sales growth declined.
It was 20% year-on-year in January but gradually dropped to 6.5% last month, according to the General Statistics Office.
Brick-and-mortar stores have borne the brunt.
In Hanoi, retail property leases in the second quarter fell by 5% from the first. Occupancy fell to as low as 85% as many tenants shut up shop, according to property consultancy Colliers Vietnam.
There is a "considerable" drop in recruitment in the retail industry, recruitment platform Adecco said in its latest report.
Retail companies’ stocks lost 1.3% in the first six months even as the VN-Index gained 11.2%.
But analysts said they have bottomed out and would go back up in the remaining months.
Analysts at brokerage SSI Securities said retailers’ profits would rise again in the last quarter as export orders are expected to increase and consumer loans would become more accessible.
Brokerage Guotai Junan Vietnam said the retail market would recover in the last two quarters on back-to-school demand, especially for electronic devices.
Retailers with deep pockets are taking advantage of this difficult period to expand their market share, Do Thi Xuan Trang, manager of retail services at Colliers Vietnam, said.
Son Kim Retail recently partnered with the International Finance Corporation to expand its GS25 convenience store chain.
Nova F&B, which owns 18 restaurants in the south, has been bought by a Singaporean investor and they are now operated by IN Hospitality.
In HCMC, demand for space at malls remained stable last quarter, which showed that retailers were willing to hold on to their space or new tenants arrived immediately if someone vacated.
Lam of YouNet said since the end of last year many big brands have been setting up their own e-commerce channels, and their sales are rising.
Sales of smartphones via official online channels increased by 89% in June, with Apple, Samsung, and OPPO recording the highest growth, he said.
Bodycare products saw sales increase by 25% in the period, with Unilever, NIVEA, and Paula’s Choice topping in sales.
Adecco forecast that in the second half retailers would focus on maximizing their presence on e-commerce channels, and demand for digital marketing and data analysis workers will rise.