Kiyoyasu Asanuma (left), Managing Director of AEON Thana Sinsap (Thailand) Public Company Limited together with Teerapol Chotichanapibal, Executive Vice-President Commercial of Thai Airways International Public Company Limited joined the recent launch of “Journey of Happiness with Thai Airways 2017” campaign at Fashion Hall, Siam Paragon. The campaign offers privileges to AEON credit cardholders from AEON, Thai Airways, H.I.S, and JCB partners.
AEON Thana Sinsap (Thailand) Public Company Limited together with Thai Airways International Public Company Limited launched “Journey of Happiness with Thai Airways 2017” campaign to offer privileges from AEON, Thai Airways and JCB partners such as special airfares from Thai Airways, great deals on tour packages from H.I.S and other special privileges from JCB partners to attendants. In addition, AEON Royal Orchid Plus Platinum cardholders, as well as other AEON credit cardholders, will be eligible for a credit refund of up to 10,000 baht on purchases made via AEON credit cards during the event. The event starts from 27-29 January at Fashion Hall, 1st floor, Siam Paragon.
Aeon, a Japanese e-commerce group, has launched aeoneshop. The website began its operation on January 1, 2017, mostly distributing the products from Japan and the ones bearing Topvalu, an Aeon’s private band. In Vietnam, nearly 1,000 products bear the brand.
Of the products it distributes, Aeon hopes ‘Me va Be’ (mother and babies) products will be popular with Vietnamese mothers who like Japanese goods.
Initially, Aeon will only delivery goods in HCMC. Like other e-commerce websites, Aeon will provide free deliveries to orders worth at least VND300,000.
Analysts said that Aeon’s policies on goods purchases, payments and exchanges are nearly the same as other e-commerce firms.
With Aeon in Vietnam, the market now has the most powerful rivals in the region. Two months ago, South Korean Lotte launched the Lotte.vn website, hoping for an ambitious plan to hold 20 percent of market share and become a top player in the market.
Meanwhile, Jack Ma of China, a billionaire who owns Alibaba, has taken over Lazada in Vietnam, while Thailand’s Central Group bought Zalora Vietnam through Nguyen Kim, of which it holds a large capital stake.
The Vietnamese e-commerce market is known as a ‘money burning machine’, meaning that investors pay big money even though profits are unpredictable.Competing against the four big players from Japan, South Korea, Thailand and China are three Vietnamese groups – Adayroi (Vingroup), Tiki (VNG) and Vuivui (The Gioi Di Dong).
Lingo, Beyeu and Deca all have left the market because they ‘did not have enough money to burn’. Tiki has reported a loss of VND160 billion in the last eight months since it received investment from VNG.
Analysts believe that those who have more powerful financial capability will win the battle, leaving the field to foreign companies.
Commenting about the competitiveness of aeoneshop.com and Lotte.vn, Nhip Cau Dau Tu said they had the advantage of confidence. Lotte.vn focuses on cosmetics and fashion products because ‘South Korean cosmetics’ are popular in Vietnam.
Aeon focuses on electronics and children’s products because products from Japan have a good reputation among Vietnamese.
The second advantage is the large store network. Aeon, for example, besides the four shopping malls in HCMC and Hanoi, also has 18 Fivimart shops in Hanoi and 66 Ministop shops in HCMC after acquiring 30 percent of Fivimart and 49 percent of Citimart stakes.
Aeon Vietnam has launched an online store, AeonEshop.com, offering discounted Japanese goods and local brands.
The Japanese-headquartered retailer says its AeonEshop.com B2C platform in Vietnam will stock a majority of Japanese and imported products, along with Aeon’s own brand Topvalu which has been available at its physical stores nationwide.
Products span various categories, including fashion, cosmetics, furniture, electronics, household items, food and office stationery.
Similar to Aeon’s other eCommerce sites in the region, AeonEshop will provide discounts up to 50 per cent for specific product types.
Ho Chi Minh City is the first market for AeonEshop with other Vietnamese cities to follow in the near future. The company plans to develop an English-language version and mobile app by mid-2017.
Vietnam is the third market where Aeon has established online retail, after Japan and Malaysia.
At the end of 2016, Korean retail giant Lotte also launched its online store Lotte.vn, targeting a share of the US$4 billion local online retail market.
Fabrice Carrasco, MD of market research house Kantar World, predicts the figure will grow five-fold by 2020 thanks to the development of smartphone usage and consumer convenience.
Praphan Rangsiyopas, Vice President Marketing of AEON Thana Sinsap (Thailand) Public Company Limited, together with Chanisa Kaewruen (third right), Deputy Managing Director Marketing Event and Business Relations Division, and Saruntorn Asaves (third left), Assistant Managing Director Marketing Promotion and Customer Relationship Management of Siam Piwat Co., Ltd., attended the recent launch of “Siam The Ultimate Giving” campaign.
The Siam Ultimate Giving campaign offers Aeon credit cardholders special privileges, such as movie tickets for two at Major Cineplex cinemas with every 5,000 baht of accumulated purchases at Siam Paragon, Siam Center, and Siam Discovery. With every 2,000 baht of accumulated purchases, cardholders receive two coupons for a lucky draw for chances to win prizes worth over 7.8 million baht, including a brand new BMW 218i GT. The campaign runs until January 15, 2017.
Waraporn Nilpanich (third left), Vice President Credit Card of AEON Thana Sinsap (Thailand) Public Company Limited, together with Voralak Tulaphorn (middle), Senior Vice President Marketing of The Mall Group Co., Ltd. has launched “The Magic of Giving” campaign to reward AEON credit cardholders this New Year.
Accumulated spending of every 3,000 baht at the Mall shopping center with AEON credit cards, entitles cardholders to receive a gift voucher of up to 1,000 baht. Besides, cardholders will receive x3 lucky draws for chances to win prizes valued over 1 million baht when spending every 1,000 baht. The campaign runs until January 11th, 2017
Myanmar retail will get a boost from the lifting of US sanctions, opening the way for foreign investment.
The official end of the restrictions was formalised on October 7 and confirmed by the US Treasury, unblocking sanctioned properties, removing various banking restrictions and reporting requirements for investment. Exporters and manufacturers are expected to be the main beneficiaries, but the retail sector is also expected to see Western brands seeking local partners.
With the easing of restrictions, local partners will find it easier to find international firms looking to enter the country, but due diligence will be needed as per industry analysts.
Several brands have already entered the market in recent years including KFC, Pizza Hut and Gloria Jean’s Coffees. Japanese retail company Aeon was the first foreign retail chain to gain access to the market this year. It partnered with Creation (Myanmar) Group to open stores in Yangon and Mandalay.
In addition, demand for retail space, which is in shortage, is expected to go up following Aeon’s lead. While the trend of shifting from local stores to large retail centers will take time, the pattern is already changing in major urban centers. The wider range of products, particularly foreign brands is expected to further quicken the process.
Saranya Pipoppinyo (right), Vice President Marketing of AEON Thana Sinsap (Thailand) Public Company Limited, hands over keys to a Nissan March, valued at 451,000 baht, to Suthit Saisuwan from Sisaket, the lucky winner of the grand prize from the AEON Promotion Your Cash Car Lucky Draw campaign which had run from July 1 to September 30.
AEON Thana Sinsap (Thailand) Public Company Limited will be offering information on its different financial services and special promotions at the 11th Money Expo Chiangmai 2016. Services include Personal Loan, Your Cash, Cash Withdrawal, AEON Credit Cards and Member Cards application service.
AEON customers who make financial transactions at the expo will also be in with a chance to win a 1-Baht gold necklace, John Lang Ford Bag or AEON Umbrella. Furthermore, AEON customers who has the financial transaction that meet AEON’s conditions will receive Caggioni Luggage or Big C Gift Voucher valued at 2,000 Baht maximum. Additionally, AEON is giving a special interest 0% installment on gold.
The 11th Money Expo Chiangmai 2016 will be held from Nov 18 – 20, 2016 at Chiangmai Hall, Central Plaza Chiangmai Airport.
Japanese retailer Aeon has seen its revenue edged up 0.9 per cent in the latest half year, but its results vary greatly between formats.
Total sales reached JPY 4,112 billion (US$39.2 billion), for the six months to August 31, while operating profit improved by a meagre 0.1 per cent to JPY72.4 billion (US$0.69 billion).
In an analysis of the company’s performance, retail research house IGD observed stronger performances by Aeon’s convenience store business and its pharmacy interests than in its general merchandise and supermarket businesses.
Aeon’s convenience store business reported a 6.1 per cent increase in operating revenues of JPY190.6 billion (US$1.8 billion), up 7 per cent year-on-year for the first half.
“The group’s Ministop and My Basket operations performed strong thanks to the enhanced merchandise selection and improved services,” says IGD.
The drugstore and pharmacy business grew revenues by 5.8 per cent, with the Welcia banner increasing its number of 24-hour stores to enhance customer convenience, driving steady growth in same-store sales.
Conversely, the supermarket and discount store business posted a 7 per cent decline in revenue to JPY1,448.5 billion (US$13.8 billion). This was mainly due to the impact of the transfer of Daiei’s stores.
And its general merchandise store business suffered a significant loss, amid weak consumer spending in Japan.
Outside Japan, Aeon reported operating revenue of JPY205.3 billion (US$1.96 billion), down 5.4 per cent year-on-year. Aeon China and Hong Kong achieved an improvement after the group completed refurbishment of its flagship stores, which helped strengthen the business foundation in China and bolster earrings. In the reporting period, the group also expanded further in Asean markets, opening a new stores in Malaysia and Vietnam.
Prime Vietnam retail rents are rising as a flurry of international retail brands move into Ho Chi Minh City.
The third quarter of 2016 saw major changes of supply market in HCMC, according to a research report by Colliers International.
In recent months, more than 100,000 sqm of retail space has been added in the city with the opening of the revamped Saigon Center anchored by Japanese department store Takashimaya and a new Aeon Mall opening in Binh Tan.
But average retail rental rates have slightly increased to US$126/sqm/month in the CBD and US$36/sqm/month in the suburbs.
Saigon Centre has been completed and occupied by 400 local and foreign brands, including concessions in Takashimaya. Aeon’s Binh Tan mall is the company’s second in Ho Chi Minh City, home to a large supermarket, restaurants, fashion shops, cinemas and a variety of retail stores.
Geert Jan ten Hoonte, retail advisor of Kusto Management Vietnam, said these two malls will bring an extra level into the market. “It will force other operators to rethink their offer to the consumers. It would be a good development if shopping centre developers start to think in location, functionality and market positioning for the malls they are planning,” he said.
Foreign brands
Vietnam’s retail industry’s latest quarter started with the departure of well-known F&B brand NYDC. The exit of the Singaporean dessert and coffee chain partly confirmed the struggle of international F&B brands face competing with domestic players.
Q3 also saw the debuts of many international fashion brands. The first, and largest, was Spanish fast-fashion brand Zara, which has taken up 2400 sqm of Vincom Dong Khoi with its first flagship store in Vietnam. The opening day brought Zara more than VND5 billion sales, reportedly the highest first-day sales of any new Zara store opening worldwide.
Saigon Center and Takashimaya has enticed many international brands to HCMC such as Dsquared2, Fred Perry, and Ted Baker.
Other significant retailers to launch in the city during the quarter included faux Japanese, Chinese-headquartered retail chain Miniso, Naughty Cat and Innisfree.
With its fast-growing young population and emerging middle class, Vietnam’s retail market is expected to mature into a more convenient, modern retail environment in coming years. Vietnam’s admission to the WTO and the upcoming TPP trade agreement will draw a significant amount of FDI from international retailers in the future.
Online shopping
Meanwhile, online shopping is growing rapidly, with the Vietnam eCommerce and Information Technology Agency (VECITA) forecasting some 30 per cent of the population will be buying goods online by 2020, spending US$10 billion a year.
In 2015, online sales were $4.07 billion, and growing at 37 per cent on the previous year.
Despite being comparatively small by Asian standards, Vietnam’s eCommerce market is growing exponentially with more than 54 per cent of the population now connected online.
The government plans to boost eCommerce with a goal of 50 per cent of local enterprises setting up online stores and 80 per cent doing business through eCommerce platforms.
-Yen Hai Nguyen
Việt Nam’s growing retail market has attracted the attention of foreign retailers. A series of famous retailers from Japan, Thailand, South Korea and France have flocked to the country, hoping to penetrate the market, a recent JLL Việt Nam report said.
As penetration of foreign retailers into the country has increased, fierce competition in the retail space has become more intense. This will put the retail market to the test and only retailers with the right positioning to meet market demand will gain market share.
In 2014, the Berli Jucker acquisition of Metro Cash & Carry Việt Nam for an enterprise value of 655 million euro (US$700 million) – the largest-ever Merger & Acquisition deal in Việt Nam at that point – signalled entry of the Thailand retailer into the country.
Later, another Thailand giant, Central Group, acquired Nguyễn Kim Trading – Việt Nam’s top electronics retailer, and BigC Việt Nam- the second largest supermarket chain in terms of store number in the nation.
In October 2015, Emart – the leading South Korean retailer – officially marked its entrance with a US$60 million shopping centre in north HCM City. Also from South Korea, Lotte Mart is quite successful with 11 supermarkets, a number expected to increase to 60 stores by 2020.
Most Japanese investors consider the success of Aeon in Việt Nam a praiseworthy case in overseas investment. Aeon has four malls and expects to reach 20 malls before 2020. Also from Japan, Takashimaya arrived in July 2016 as anchor tenant of downtown HCM City’s Saigon Centre retail mall.
Adding to three Simply Mart stores in HCM City, AuchanSuper, a major retail brand from France, is planning to open another 17 supermarkets by end-2017 in the city and 20 stores by 2020 in northern Việt Nam.
Thanks to increasing disposable incomes, big fashion brands such as Gap, Mango and Topshop have become the top choice of many young Vietnamese. In September 2015, Zara opened its first flagship store in HCM City. H&M will reportedly enter Việt Nam early next year.
With 90 million people, Việt Nam has attracted retailers with its relatively young population – 70 per cent are aged between 15 and 64 years – who promise to be a key driver of robust market growth. Việt Nam’s urban population is expected to grow 2.6 per cent annually from 2015 to 2020, the highest rate among regional peers.
“Increasing disposable incomes, rapid urbanisation and rising living standards make Việt Nam one of the most dynamic emerging economies in South East Asia,” says Bùi Trang, Commercial Leasing Director at JLL Việt Nam.
According to the Boston Consulting Group, Việt Nam has the fastest growing middle and affluent class (MAC) in the region, which will double in size between 2012 and 2020, from 12 million to 33 million. MAC consumers, whose income is VNĐ15 million (US$700) or more a month, will be a key group of potential customers for retailers.
Việt Nam e-commerce is set for strong growth thanks to its growing consumer and online population. According to the Nielsen’s report, nine out of ten consumers in Việt Nam (91 per cent) own smartphones, compared to 82 per cent in 2014, and the rapid up-take of connected devices, especially smartphones and tablets are instrumental in media consumption shifting.
“Significantly increasing the amount of the credit card holders has also had an impact on the change in consuming behaviour. It is observed that people now are more willing to spend as they can afford more with credit and it tends to make shoppers less canny,” she said.
Additionally, increasing international arrivals and continuously improving infrastructure are also factors that make Việt Nam an alluring market for retailers.
Mr. Praphan Rangsiyopas (middle), Vice President Marketing and Mrs. Waraporn Nilpanich (right), Vice President Credit Card of AEON Thana Sinsap (Thailand) Public Company Limited together with Ms. Nopchanok Tantiwechwuttikul (left), Payment and Loyalty Manager of The Shell Company of Thailand Limited offer special promotion for AEON credit cardholders, Accumulate spending amount of 3,000 Baht and up at Shell Service Station via AEON Gold and AEON Classic credit card, cardholders will get cash back up to 500 Baht per month.
AEON credit cardholders can enjoy this promotional campaign by registering through SMS by typing SH follow by 16 Digits of AEON credit card number without space, and send to 4589123 or register free at www.aeon.co.th. This campaign starts now until March 31st, 2017.
Look for more, but smaller, neighborhood stores, an increase in local delivery trucks and changing store layouts as retailers accommodate aging populations, says The Silver Series IV: Retail Reconfiguration for Seniors.
The report is the latest in a series of analyses from Fung Global Retail & Technology on the impact of the growing 65-and-over population – silver consumers – on global economies, industries and retail.
With smaller households and appetites, seniors shop more frequently, but make smaller purchases, favoring the convenience store sector, the report says. The trend is already being seen in Europe, where large-format retailers such as Tesco and Carrefour are opening smaller stores. While this has yet to take place in the US, ignoring this population segment is unwise, as silvers are growing in number and driving a disproportionate amount of consumer spending.
“The era of the silver generation has arrived,” writes Deborah Weinswig, MD of Fung Global Retail & Technology.
The global population silver consumers – aged 65 and older – will account for over one-third of population growth through 2035, according to the United Nations, and will comprise more than 20 per cent of the population overall in Japan, South Korea, Western Europe, North America and China. These households tend to be wealthier, and in the US, senior households spend well above the national average on household supplies and books, though less on apparel and footwear, which could be due to limited choice.
Long thought to be the province of the young and tech savvy, eCommerce also is a growth market for seniors, who will enjoy or require the convenience of home delivery.
Not all stores and product manufacturers are accommodating silvers’ changing needs. Seniors can find large-format stores and regional malls overwhelming, and product packaging may need to be redesigned in order to make it easier for seniors to read and open, Weinswig notes.
But some retailers around the globe are adapting. Japan’s Lawson convenience store chain has renovated units in areas with a high concentration of silvers, widening aisles, lowering shelves and stocking more products that appeal to older shoppers. The 7-Eleven chain in Japan offers a meal delivery service to seniors, while the Aeon Mall offers medical facilities, leisure activities, a concierge and other services for its senior shoppers. Supermarket chains in Germany and Austria have widened aisles, provided customised shopping carts and added nonskid flooring, while in the US, drugstores CVS and Walgreens are adapting store layouts to minimise high- and low-shelving, and have carpeted floors in some stores and even added magnifying lenses to shelves so shoppers can read labels with small print more easily.
“It is no coincidence that Japan, which is well ahead of most countries in terms of the aging of its population, has a major convenience store sector,” Weinswig writes. “We are now seeing other markets follow Japan in a convenience boom: in France and the UK, for instance, major retailers are pushing into the format as the segment outpaces the wider grocery market.”
The full report can be found here.
Aeon will open new supermarkets in Myanmar at a faster clip over the next five years, according to business plans announced Monday, with shopping centers also under consideration.
The Japanese retail group recently established supermarket chain Aeon Orange, a joint venture with Creation Myanmar Group of Companies. The 14 supermarkets purchased from CMGC will be renovated, and the first new Aeon Orange store is to open within the year. Openings will rise to 10 new stores annually after five years.
Aeon President Motoya Okada also said that “opening up shopping centers is vital” for the future, expressing interest in capitalizing on the company’s biggest strengths.
“We cannot delay in such a high-potential market,” Okada said, hinting at plans to open a large-scale shopping center in Myanmar like those Aeon operates in Japan and other countries. The company will keep a close eye on changes to restrictions for foreign investment.
Aeon’s international business segment slumped during the year ended in February with an operating loss of 2.4 billion yen ($23.4 million). A slowdown in Malaysia, one of Aeon’s largest overseas markets, is deemed responsible and increased the urgency to develop a profitable new market.