Vietnam’s convenience market will outpace other countries in the region with double-digit growth over the next four years, according to international grocery research organization IGD
The Asian Development Bank’s prediction of 5.7% growth in 2017 means Asia’s economic expansion, despite stabilising, remains world beating. Laos, India and Cambodia are among the region’s fastest growers.
Such growth has provided fertile ground for Asia’s blooming grocery market. It is already the biggest in the world, and will grow by 6.3% over the next four years to reach a size of $4.8trn by 2021 – equivalent to Europe and North America’s markets combined.
Vietnam’s economic growth has progressed less consistently than some of its neighbours, but foodservice has rocketed ahead. Using convenience store operator performance as an indicator, IGD forecasts 37.4% growth in Vietnam’s convenience market, compared to 24.2% in the Philippines and 15.8% in Indonesia.
Nick Miles, Head of Asia-Pacific at IGD, is optimistic that conditions are in place for sustained growth in Asia’s convenience sector. “Among all the bricks and mortar grocery channels, convenience shows the strongest growth prospects in Asia, thanks to rapid urbanisation, a growing young population and greater levels of disposable income”.
According to Miles, Vietnam’s convenience stores have tapped into the country’s burgeoning youth market, placing them in a particularly strong position. “The stores provide them with an air-conditioned environment, well-organised shelves and seating areas, high quality products and, in some stores, free Wi-Fi”.
Growth set to continue
IGD has identified three key characteristics making Asia a hub for convenience growth.
Store expansion is a key factor, with the fastest growing convenience markets driven by an increase in store numbers. Stores are increasingly moving from the biggest cities to more provincial areas, driving growth in new terrain.
Linked to this, local firms with superior insight into national convenience trends are becoming more prominent players. Vietnam’s VinMart is an outstanding example, scaling up operations to achieve countrywide status in a market previous dominated by Japanese retailers.
In addition to the expansion of national supermarket chains, mini-supermarkets springing up in local neighbourhoods have also helped to boost convenience markets by catering to local needs.
Asia’s convenience boom is picking up pace as more regional players get in on the action. Vietnam leads the way, but conditions are ripe continent-wide for foodservice professionals to carve a niche in this vibrant industry.