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14:24 | 02/12/2013
E-Mart eyes 2015 retail chain roll-out
E-Mart, South Korea’s largest retailer is mulling over plans to open its first supermarket in Vietnam within the next two years.
South Korean supermarket giant E-Mart is planning a 2015 entry into Vietnam’s increasingly competitive retail sector
Carl Chang-Hun Lee, food grocery sourcing buyer for E-Mart told VIR that at present, the company was seeking partners in Ho Chi Minh City and Hanoi for opening its first supermarket in Vietnam. In addition the firm was seeking wholesale suppliers for its future plans.
At present, the company is assessing vegetables and lobster supplied by Vietnamese firms. However, the retailer has faced difficulties in selecting local suppliers as there remain concerns over quality standards.
Everyday Vietnamese brands such as G7 coffee only hold a two per cent share in E-Mart’s chain of supermarkets. E-Mart’s annual e-commerce in the Vietnamese market currently totals nearly $660,000 per year and this is expected to increase in the coming period, according to Lee.
According to Korean Trade-Investment Promotion Agency’s Private Equity Korea website, the Korean supermarket would likely opt for a joint venture as it prepared to officially tap into Vietnam in 2015. It may need assistance to ease into the local markets and facilitate loan financing, according to the website.
The company announced in July 2011 that it was partnering with Vietnam-based U&I Group and global real-estate business Savills, for E-Mart’s first ever foray into Southeast Asia. The company may strengthen its partnership with U&I into a joint venture, but this has not been officially decided yet. The firm has yet to solidify the size of its investment, as it will ultimately be determined about how it enters the market. Moreover, the process of selecting store locations was continuing.
According to Private Equity Korea website, E-Mart is eyeing Cambodia and Myanmar as the next sites for its Southeast Asia expansion. The company’s plans for overseas expansion follow in the aftermath of intensified regulations in South Korea.
Last year, the South Korean government passed a regulation which requires ‘super supermarkets’ (SSM) like E-Mart’s to close its business for two Sundays per month in order to help support struggling independent convenience stores.
As of July 2013, SSMs will be required to submit an evaluation which outlines the company’s impacts on commercial districts when planning to open up a new store. As a result, the company’s financial report cited slower growth. In 2012, the company posted $11.3 billion in sales and $669 million in operating profits. Analysts forecast E-Mart’s operating profits to drop to $680 million this year.
E-Mart will be the second South Korean retailer to operate in Vietnam, following Lotte Mart which entered the country in 2008.
01 April 2015
Emart to open first store in Vietnam
The Korean retailer has announced that its first mall and hypermarket in Vietnam will open in Ho Chi Minh City by October this year.
Hypermarket to focus on local products and low prices
Emart’s first store will be located in a new 30,000 sq m development in Go Vap, a northern district of Ho Chi Minh City. The district is known as one of the most developed and densely populated areas in the city, with good traffic links to the city centre. The 6,000 sq m hypermarket will offer products from about 1,000 local suppliers, plus a wide range of Korean and Emart private label products, whilst focusing on fresh food and low prices. Additionally, the shopping mall will comprise of a cinema, a kids playground, restaurants and other commercial outlets. Speaking at Emart's Partners Day, the retail said that there could be opportunities for local suppliers in the future to distribute their products via it international operations.
Targeting five new developments over the next three years
Emart’s general director in Vietnam, Choi Kwang Ho, said at the conference that the retailer is investing up to VND 1.3tn (USD 60mn) in the new development at Go Vap, whilst it is also planning another four shopping malls over the next three years. One of these developments, which is already under construction will be in Tan Phu district, a western district of Ho Chi Minh and is estimated to open at the beginning of 2016. The first two developments are both in areas of the city where there is significant new residential development, clearly showing Emart’s ambition to capitalise on these emerging urban areas.
