Modern Grocery Retail Sector - Minimarts to dominate modern grocery retailing in Vietnam
  • 2024-10-21T00:00:00
  • Sector Reports

In this report, we review the prospects of Vietnam’s modern grocery market. We currently have a BUY rating for MSN (target price of VND102,800) and an OUTPERFORM rating for MWG (target price of VND78,100), which are the two companies under our coverage that have material exposure to the modern grocery sector.

Fresh food is central to Vietnamese diets. Vietnam’s consumption volume per capita of fresh food is comparable to larger countries like China and exceeds wealthier nations such as Thailand and Japan. Traditional grocery shopping habits persist in Vietnam, with many consumers preferring in-person shopping to ensure freshness. As urbanization rises and income structures shift towards formal employment, convenience is becoming increasingly important. When it comes to grocery shopping, Vietnamese consumers now balance price with quality, and convenience, rather than purely budget-oriented purchasing.

Minimarts are becoming a vital part of Vietnam's grocery retail landscape. Although traditional channels still dominate Vietnam’s grocery retail, minimarts’ sales have witnessed rapid double-digit growth over the past seven years. This growth is driven by rising urbanization, consumer income, and a shift towards modern formats spurred by the COVID-19 pandemic. In Vietnam’s modern grocery sector, the top-seven players hold nearly 90% of the market share value, with domestic brands like Bach Hoa Xanh (95% owned by MWG) and WinCommerce (79% owned by MSN) as the dominant players in the minimart segment.

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