Central pushes Vietnam sites

Central pushes Vietnam sites

Mr Broianigo and Mrs Jariya are propelling the expansion of Central's brands in Vietnam.
Mr Broianigo and Mrs Jariya are propelling the expansion of Central's brands in Vietnam.

Central Group, Thailand's largest retail conglomerate, plans to raise the number of retail sites in Vietnam over the next five years to 720, almost four times last year's number.

According to Philippe Broianigo, chief executive of Central Group Vietnam and Big C Vietnam, the company is allocating US$500 million to expand in Vietnam during 2018-22.

"We've invested US$1.5 billion [49.1 billion baht] in Vietnam over the past five years and we are the No.1 foreign retailer in Vietnam," Mr Broianigo said. "The company is spending about $100 million a year over the next five years in Vietnam to expand retail in all formats, from shopping complexes, wholesale and fashion to electrical appliances."

Mr Broianigo cited Vietnam's GDP growth, which is about double that of Thailand.

Vietnam also boasts a 93-million-strong population, with the figure expected to increase to 100 million over the next five years.

More importantly, the middle-income segment in Vietnam continues to grow every year.

According to Mr Broianigo, the company plans to open two Big C shopping complexes this year. The first branch will open in Ho Chi Minh City in October this year and the second one will open in northern Vietnam this year or early next year, depending on the availability of locations.

Apart from the existing business, the company also plans to open new category killer stores this year.

They include Look Kool, which has just introduced to Central's Vietnam portfolio in the past six months.

Jariya Chirathivat, executive vice-president of business development at Central Group, said Look Kool is a value-for-money shop like Daiso, the Japanese variety store.

There are 26 Look Kool stores in Vietnam and the company aims to increase the stores to 30 over the next 2-3 months of this year. The company has also introduced Home Mart, the do-it-yourself store for home decoration on 500-600 square metres, targeted at families.

The first Hello Beauty, a beauty corner, has also been opened on the space of 250 square metres at Big C Shopping complex before rolling out outside its retail shopping complexes in the near future.

There are 250 retail stores under Central Group in Vietnam, up from 210 stores at the end of last year. They include 31 Big C shopping complexes, 59 Big C Express and LanChi Mart, 49 fashion stores under Robins, Delala, Supersport, Marks & Spencer, 79 Nguyen Kim electrical appliance stores and online stores.

Vietnam is the strategic investment country of Central Group. The group plans to increase to total retail stores to 7,509 stores within 2022. Central Group of Companies expects sales to reach 397 billion baht this year, up 14% over last year.

Apart from Vietnam, the group also plans to allocate about 47.5 billion baht to expand Thailand and other countries this year, up 27.8% from last year.

"Central's business fared well in Vietnam, with double-digit growth in the first seven months of this year, better than Vietnam's GDP growth of 7%," Mr Broianigo said. "Food business has driven major sales. Our food segment is very strong in Vietnam."

Central Group's sales in Vietnam were 44 billion baht in 2017, higher than the earlier projection of 37 billion baht. About half of sales came from the food business and the other half from fashion, wholesale and electronics.

"The biggest challenge when expanding in Vietnam is understanding Vietnamese customers," Mr Broianigo said. "We need a strong local team to understand trade regulations and have to look closely at operations costs. We are quite happy to have entered Vietnam early."

In a related development, Central Group yesterday officially launched Vietnamese Goods and Tourism Week, organised by Central and Vietnam's Ministry of Industry and Trade, in cooperation with the Vietnam National Administration of Tourism.

The event will take place until Sunday at CentralWorld.

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