Vietnam is forecast to be the fastest-growing convenience market in Asia by 2021, according to new data released by international grocery research organisation IGD, followed by the Philippines and Indonesia.
Asia’s grocery market is the largest in the world, with a predicted 6.3 per cent compound annual growth rate up to 2021. Its size is forecast to reach US$4.8tn by 2021: equivalent to Europe’s and North America’s combined.
In the convenience channel, IGD is forecasting high double-digit compound annual growth over the next four years in Vietnam (37.4 per cent), the Philippines (24.2 per cent) and Indonesia (15.8 per cent), based on the performance of the leading convenience store operators in each market.
“The retail markets in these three countries are gradually shifting from traditional to modern trade, and there are several factors driving this: a positive economic outlook; a significant increase in GDP per capita; deregulated markets encouraging more foreign investment; and rapidly changing shopper habits,' said Nick Miles, head of Asia-Pacific at IGD. “Among all the bricks and mortar grocery channels, convenience shows the strongest growth prospects in Asia, thanks to rapid urbanisation, a growing young population and greater levels of disposable income.”
On the particularly strong growth tipped for Vietnam, Miles noted: “Convenience stores in Vietnam have become popular destinations for young consumers to shop and hang out, as the stores provide them with an air-conditioned environment, well-organised shelves and seating areas, high quality products and, in some stores, free Wi-Fi. It is also easier to get licences for stores under 500 sqm, which is why retailers have been expanding to gain market share.”
Vietnam, the Philippines and Indonesia share similar characteristics that make their convenience markets particularly ripe for growth, according to IGD, including store expansion, local players gaining a stronger foothold, and the growing popularity of neighbourhood mini-supermarkets.
“Across all the region’s key growth markets, we expect to see retailers and manufacturers increasing their investment in convenience, championing innovative new products and formats such as food-to-go, and above all, working collaboratively to ensure they are making the most of these exciting growth prospects,' Miles added.
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