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Binh Duong the next destination for retailers

THUrsday - 19/01/2012 16:36
Besides the industrial manufacturing sector as a key investment area, the retail sector in the southern province of Binh Duong has emerged as a new magnet for foreign companies.

Foreign retailers used to choose big cities such as HCMC, Hanoi, Danang, Haiphong, and Can Tho as their destinations of choice. However, the Binh Duong Department of Planning and Investment says several international distributors have come to the province to explore investment opportunities.

Certain projects have been formed and investors have decided to pour capital in implementing such investment projects.

Arriving en masse

Though it is not yet present on the local market, Aeon Corporation of Japan has selected HCMC and Binh Duong as the first destinations. The retailer with over 180 affiliates plans to develop a commercial center in Thuan An Town of Binh Duong.

A source from Binh Duong says the Japanese retailer basically completed the investment procedures as the provincial authorities have approved a six-hectare location in Vietnam Singapore Industrial Park (VSIP) for the investor to carry out the project.

At meetings with Binh Duong leaders for the project promotion, Aeon said the commercial center in Binh Duong would have three stories and 75,000 square meters in total, with retail space accounting for 45,000 square meters.

The investor expects to commence work on the project in 2012 and put it into service by 2014. When in place, the center will create jobs for over 1,500 people.

Meanwhile, French firm Casino Group, the owner of the well-known supermarket chain Big C with 16 outlets nationwide, is currently eyeing Binh Duong as a new venue.

According to a source from the provincial Department of Planning and Investment, Big C is planning a supermarket in Thu Dau Mot Town. However, Casino would not be investing directly in this project, but would lease a location of a domestic infrastructure developer. The source says the Binh Duong authorities have agreed in principle to let Big C proceed with its supermarket project in Thu Dau Mot.

Among the investors from South Korea, Lotte Mart under the Lotte Group is considered the biggest retailer in Vietnam. After opening a commercial center in each of HCMC’s districts 7 and 11, South Korea’s leading retailer is working on plans to expand toward the neighboring market of Binh Duong.

Lotte Mart is cooperating with Charm Engineering, a South Korean developer of several property projects in Binh Duong, to open a commercial center in the province’s Di An District.

The Korean firm will invest some US$7 million in the five-story Charm Plaza shopping center covering 12,500 square meters. It is expected to open to business in 2013.

Commenting on the Binh Duong market, a representative of Lotte Mart says that with its position as a fast growing industrial manufacturing province with a huge population and young consumers who are to ready to spend, Binh Duong is becoming a new place for supermarket and commercial center developers.

This is the reason why Lotte Mart has decided to choose Binh Duong as its next destination after HCMC under its plan to expand its shopping centers to over 30 in Vietnam.

Another South Korean investor in the distribution sector with a large project underway in Binh Duong is GS Retail under GS Group. The retailer has been granted a license to roll out the US$30 million project in Ben Cat District. US$10 million will be spent on the first phase of this project.

Nevertheless, the global economic crisis has left an impact on the progress of the project.

Yet, the early bird in Binh Duong is the German wholesale store chain operator Metro Cash & Carry. In November last year Metro Cash & Carry Vietnam launched a wholesale center in Thu Dau Mot Town into operation. The 5,600-square-meter store stocks 25,000 food and non-food items.

In addition, Vinci of France and other retailers are considering building convenience stores in the neighboring province of HCMC.

Full of potentials

Explaining the growing interest of foreign distributors in Binh Duong, Le Viet Dung, deputy director of the Binh Duong Department of Planning and Investment, says more and more foreign retailers have come knocking in recent years.

Dung says the retail market still has room for more retailers since Binh Duong has many new urban areas and large industrial parks underway. But these areas are still sparsely inhabited.

GS Retail has invested in My Phuoc Industrial Urban Area, which is far from Thu Dau Mot Town, and Lotte Mart’s Charm Plaza project is in Di An Town where trading activities are not so bustling. Aeon is eyeing customers residing near VSIP and people working there.

Still, industry observers say the province’s retail market holds strong growth potentials, though, thanks to the province’s appeal as a manufacturing base of local and foreign investors.

The province is also developing a number of modern urban areas, offering convenient locations for service providers and retailers to come for business opportunities. Moreover, Binh Duong is highly rated for its ideal geographical location in the center of the key southern economic region and of the important transport routes.

This explains why local retailers such as Saigon Co.op, Vinatex Mart, Citimart, FiviMart and BDMart or home appliance centers like Thien Hoa and Cho Lon have set up shop there.

Nguyen Thanh Nhan, deputy general director of Saigon Co.op, the owner of Co.opMart supermarket chain, says though the Binh Duong retail market is still in the early stages of development, Co.opMart has been doing good business in the province.

Binh Duong will become a potentially large retail market in the next 8-10 years given its good location and strongly growing industrial sector.

With total retail and service revenues amounting to VND60 trillion a year, coupled with steady GDP growth of 30% per year, Binh Duong is actually a promising land for foreign retailers who are ready to bet on the future.

Author: CS

Source: vietnamnew

Key: n/a

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