Bắc Ninh
Japanese retailers expand in Vietnam despite economic woes
Since entering Vietnam four years ago Japanese fashion brand Uniqlo has opened 22 stores in HCMC, Hanoi and Binh Duong Province, seven of them this year.
Household and consumer goods retailer Muji, which came to the country three years ago, now has seven in HCMC and Hanoi after opening three in 2023.
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Consumers browsing the Uniqlo Hoan Kiem store in November, 2023. |
Retailer Sakuko, which sells goods imported from Japan, opened eight new stores this year, taking its number of stores to 42.
Cao Thi Dung, its CEO, said Sakuko prioritizes expansion despite the recession, and has a target of having 60 stores in 2024.
Retail giant Aeon opened eight stores by investing US$1.18 billion over 11 years.
It opened one new outlet this year and plans to launch another in Hue City next year.
Despite consumers cutting spending, which resulted in a 6.9% year-on-year decrease in retail sales of goods and services in the first 10 months of 2023, several factors have motivated Japanese retailers to expand.
Firstly, they managed to perform well despite the low demand.
Sakuko’s revenues jumped by 15% this year while Muji Retail Vietnam’s sales "grew steadily," their CEOs said.
Uniqlo Vietnam has not released its income statement but CEO Hideki Nishida said its performance is "in line with its long-term development plans."
Secondly, Japanese goods and brands are popular in Vietnam.
In the first 10 months of this year imports from Japan were worth $17.7 billion, the third highest after imports from China and South Korea, according to the General Department of Vietnam Customs.
A survey by market research firm Q&Me found "Made in Japan" to be Vietnamese consumers’ favorite label, with 58% favoring Japanese cars and electronics and 22% liking that country’s fashion brands.
"The prospering Vietnam-Japan relations greatly boost our credibility with [Vietnamese] consumers," Tetsuya Nagaiwa, CEO of Muji Retail Vietnam, said.
"Vietnamese consumers strongly believe in the quality of Japanese goods."
Thirdly, Japanese retailers have always considered Vietnam an ideal market for their long-term development.
Nagaiwa said Vietnam’s rapidly growing economy, political stability and its people’s receptivity and open-mindedness make the market very lucrative.
Japanese brands do not merely expand in Vietnam but also pour money into local production.
In a recent interview with VnExpress, Nishida said Vietnam is Uniqlo’s top manufacturer in Asia and 50% of the products it sells here are made locally.
Ryohin Keikaku, Muji Retail Vietnam’s parent company, also partners with several factories in Vietnam.
Currently 30% of its products are sourced locally.
Products made of Vietnamese rubberwood, the fruit of two years of research by Muji, account for 20% of its furniture sales, Nagaiwa said.
Japanese retailers are also very involved with local communities in Vietnam, he said.
"Having navigated various market fluctuations, we are more and more aware of what is useful and beneficial to Vietnamese people’s daily lives."
Muji seeks to create a bond by organizing community markets where local businesses could introduce and sell their products, and selling local specialties, 40% of them Vietnamese brands, in its stores.
Uniqlo’s Hoan Kiem store in Hanoi skillfully incorporates Vietnamese and Japanese cultural details in its layout design.
Tracy Vu, a strategy consultant in the BrandMarCom ecosystem, said Japanese brands attract Vietnamese consumers not just with their high-quality products but also through the culture and spirituality they represent.
Source: VnExpress
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