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Groceries adopt digital technology as they feel the heat from online competition

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Grocery owners have begun feeling the pressure of ‘Jack Ma’s retail empire’ which has entered Vietnam through Lazada. They are upgrading their stores in an aim to be more professional in the digital era.

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The growth rate of the Vietnamese retail market (Source: GSO)

 

Nguyen Thi Cuc, owner of a grocery in Hoang Mai district in Hanoi, said she spent VND5 million to buy a computer and barcode reader last week. 

“Supermarkets and convenience stores have mushroomed. If I did not upgrade my store, I would lose customers,” she explained.

Cuc is satisfied about her decision. She doesn’t have to spend time to calculate bills, but she knows exactly how much money she has and how big the stocks are. However, she admitted that it took her a lot of time to get used to a computer and she sometimes has to ask for her granddaughter’s help.

The locations in advantageous positions and hospitable services are the biggest advantages of grocery stores. 

However, the advantages alone will not be enough to attract customers. Many groceries now are trying to sell goods through many channels. They advertise on Facebook, Zalo or sell products via phones.

The big changes in the global retail industry can be seen in Vietnam. Buyers use phones, computers and game machines to access the internet, and buy goods anywhere they want, on websites, Facebook, Zalo, or e-commerce floors, or go directly to shops.

However, omni channels, a growing tendency of modern retail, pose challenges for retailers. They need to find solutions that optimize profit and manage all sale channels.

What is the fate of groceries?

Contrary to predictions of many years ago, the traditional retail channel continues to grow. Its market share has decreased slightly by several percent, but the revenue still increases. According to the General Statistics Office (GSO), in 2016, the retail revenue increased by 10.2 percent, higher than the 9.8 percent growth rate in 2015, to $118 billion.

Meanwhile, a report of the Trade Research Institute predicted that Vietnam’s retail industry would grow by 11.9 percent per annum in 2016-2020 to have the value of $179 billion in 2020.

According to Nielsen, Vietnam has 1.4 million grocery stores and 9,000 traditional markets, which have revenue of $10 billion a year and hold 75 percent of market share.

According to Tran Trong Tuyen, CEO of DKT, said offline and online sales management, multi-channel inventory management and order management on mobile platforms are the problems retailers have to solve.

 

 

Source: VietNamNet

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