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Country is 'most important' part of Japanese retailer's overseas strategy
A MaxValu store in Vietnam: Aeon plans to expand the chain to about 100 locations in the Southeast Asian country.
SHOHEI KONO and TOMOYA ONISHI, Nikkei staff writersDecember 25, 2021 23:00 JST
TOKYO/HANOI -- Jam-packed market stalls have long served as Vietnam's go-to source for putting food on the table. But the coronavirus pandemic, combined with lower barriers to foreign investment, created what one of Japan's top supermarket operators sees as its chance to reach more of the Southeast Asian nation's consumers.
Aeon plans to open 100 or so of its MaxValu supermarkets in Vietnam by 2025, up from just four in the Hanoi area now.
The retail group faces few large foreign-owned competitors in the capital, where wet markets would draw crowds with fresh meat, fish and produce.
These vendors are now seeing shoppers stay away after a rash of COVID-19 outbreaks in big Vietnamese cities this year. Supermarkets are pricier, but shoppers like Nguyen Thi Lan view them as more hygienic. The Hanoi resident says she shops at supermarkets "twice as much" as before.
Aeon will add bigger stores with 500 sq. meters or more of floor space in its expansion. "Vietnam is the most important market for our overseas strategy," said Soichi Okazaki, the executive in charge of the group's Southeast Asian business.
Supermarkets are one part of the group's vision for growth. Tokyo-listed subsidiary Aeon Mall plans to increase its shopping centers in Vietnam to 16 locations by 2025 from the current six.
In its pursuit of scale, Aeon will chase Vietnamese supermarket leader Masan Group and Thailand's Central Group, which operates 230 stores.
The region holds big potential for economic growth, forecasters say. The market for processed food in the six leading Association of Southeast Asian Nations' economies is expected to grow around 60% from 2016 to 2026, reaching about $112.7 billion, according to Euromonitor. Vietnam has the fastest growth rate among the six, at nearly 90% during this period. Health foods are one of the most notable areas of fresh demand, one study shows.
As a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade deal, Vietnam is expected to drop a barrier to foreign retail investment, economic needs testing, as early as 2024. ENT requires foreign retailers to obtain local approval for each new store of 500 sq. meters or more. Ending this requirement will create a tailwind for multinationals such as Aeon by removing a source of uncertainty for its expansion plans.
Aeon, which outsells convenience store operator Seven & i as Japan's top listed retailer by revenue, looks to quicken its overseas growth.
By fiscal 2025, Aeon aims to increase the overseas share of its annual investment to 25%, nearly twice the previous level, and to more than double its annual operating profit in Asia outside Japan to a little over 100 billion yen ($875 million). It plans to open more supermarkets in Indonesia, Cambodia and elsewhere in the region.
Aeon is not the only Japanese group with an eye on Southeast Asian consumers.
Trading house Sumitomo Corp. plans to open more locations of Japanese-style supermarket chain FujiMart in Vietnam with local conglomerate BRG Group.
FujiMart has three locations in Hanoi. "With the COVID-19 pandemic, supermarkets have drawn a following of customers who see them as hygienic," said Keisuke Hitotsumatsu, who heads the joint venture.
The operator of the Don Don Donki store chain, Pan Pacific International Holdings, aims to increase its overseas sales to 1 trillion yen by the year ending June 2030 -- about six times last fiscal year's level.
Don Don Donki sells a variety of Japanese-style foods, such as bento meals, fresh sushi and sake, made with produce sourced from Japan. The company plans to open around 10 stores in Southeast Asia this fiscal year, bringing the total to 20.
Convenience store operator FamilyMart has expanded into five Southeast Asian countries, tailoring its product lineup to local needs and tastes. In Malaysia, where it has about 250 stories, Japanese-style rice balls and oden stew have proved popular.
asia.nikkei.com
A MaxValu store in Vietnam: Aeon plans to expand the chain to about 100 locations in the Southeast Asian country.
SHOHEI KONO and TOMOYA ONISHI, Nikkei staff writersDecember 25, 2021 23:00 JST
TOKYO/HANOI -- Jam-packed market stalls have long served as Vietnam's go-to source for putting food on the table. But the coronavirus pandemic, combined with lower barriers to foreign investment, created what one of Japan's top supermarket operators sees as its chance to reach more of the Southeast Asian nation's consumers.
Aeon plans to open 100 or so of its MaxValu supermarkets in Vietnam by 2025, up from just four in the Hanoi area now.
The retail group faces few large foreign-owned competitors in the capital, where wet markets would draw crowds with fresh meat, fish and produce.
These vendors are now seeing shoppers stay away after a rash of COVID-19 outbreaks in big Vietnamese cities this year. Supermarkets are pricier, but shoppers like Nguyen Thi Lan view them as more hygienic. The Hanoi resident says she shops at supermarkets "twice as much" as before.
Aeon will add bigger stores with 500 sq. meters or more of floor space in its expansion. "Vietnam is the most important market for our overseas strategy," said Soichi Okazaki, the executive in charge of the group's Southeast Asian business.
Supermarkets are one part of the group's vision for growth. Tokyo-listed subsidiary Aeon Mall plans to increase its shopping centers in Vietnam to 16 locations by 2025 from the current six.
In its pursuit of scale, Aeon will chase Vietnamese supermarket leader Masan Group and Thailand's Central Group, which operates 230 stores.
The region holds big potential for economic growth, forecasters say. The market for processed food in the six leading Association of Southeast Asian Nations' economies is expected to grow around 60% from 2016 to 2026, reaching about $112.7 billion, according to Euromonitor. Vietnam has the fastest growth rate among the six, at nearly 90% during this period. Health foods are one of the most notable areas of fresh demand, one study shows.
As a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade deal, Vietnam is expected to drop a barrier to foreign retail investment, economic needs testing, as early as 2024. ENT requires foreign retailers to obtain local approval for each new store of 500 sq. meters or more. Ending this requirement will create a tailwind for multinationals such as Aeon by removing a source of uncertainty for its expansion plans.
Aeon, which outsells convenience store operator Seven & i as Japan's top listed retailer by revenue, looks to quicken its overseas growth.
By fiscal 2025, Aeon aims to increase the overseas share of its annual investment to 25%, nearly twice the previous level, and to more than double its annual operating profit in Asia outside Japan to a little over 100 billion yen ($875 million). It plans to open more supermarkets in Indonesia, Cambodia and elsewhere in the region.
Aeon is not the only Japanese group with an eye on Southeast Asian consumers.
Trading house Sumitomo Corp. plans to open more locations of Japanese-style supermarket chain FujiMart in Vietnam with local conglomerate BRG Group.
FujiMart has three locations in Hanoi. "With the COVID-19 pandemic, supermarkets have drawn a following of customers who see them as hygienic," said Keisuke Hitotsumatsu, who heads the joint venture.
The operator of the Don Don Donki store chain, Pan Pacific International Holdings, aims to increase its overseas sales to 1 trillion yen by the year ending June 2030 -- about six times last fiscal year's level.
Don Don Donki sells a variety of Japanese-style foods, such as bento meals, fresh sushi and sake, made with produce sourced from Japan. The company plans to open around 10 stores in Southeast Asia this fiscal year, bringing the total to 20.
Convenience store operator FamilyMart has expanded into five Southeast Asian countries, tailoring its product lineup to local needs and tastes. In Malaysia, where it has about 250 stories, Japanese-style rice balls and oden stew have proved popular.
As Vietnam's wet markets suffer, Aeon moves in with big stores
Country is 'most important' part of Japanese retailer's overseas strategy
asia.nikkei.com
