With a young population, an expanding middle class and one of Southeast Asia’s fastest-growing economies, Vietnam is an alluring market for Japanese retailers like Aeon, Takashimaya Co. and Seven & i Holdings Co. The reason: China is slowing and growth is flat-lining at home.
“The Vietnamese economy is growing rapidly and its middle class is explosively expanding,” said Nagahisa Oyama, who oversees Vietnam operations as the company’s chief there. “Its retail market is growing very quickly with strong appetite for spending, especially among young people.”
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And there are plenty of them in the nation of 93 million. Almost 60 percent of Vietnam’s population are under 35 years old and are becoming better educated, according to market research company Nielsen Vietnam.
Four days after an Aeon Mall opened in Ho Chi Minh City July 1, it recorded sales that were 18 percent higher than originally estimated, according to the company.
Aeon, Japan’s largest retailer by sales, currently operates four malls and 54 supermarkets in Vietnam. The number of Aeon supermarkets in the Southeast Asian country is more than double the grocery stores the company’s invested in China and comprises a third of supermarkets the Japanese business has opened outside its home market.
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Department store operator Takashimaya will open a 15,000 square-meter (161,000 square feet) department store in the Saigon Center in Ho Chi Minh City this month, its first in the country to tap faster-growing markets abroad especially in Southeast Asia, Tokyo-based spokesman Hironobu Hanai said.
Vietnam’s young population and high growth rate is attractive and Takashimaya has invested about 5 billion yen ($47 million) into the nation since 2012, including in the new store and other real estate, Hanai said.
Japanese convenience store giant 7-Eleven last year signed a franchise agreement with Seven System Vietnam as part of its expansion plan in Pacific Rim.