Viet Nam remains key market for AEON’S investment expansion
In its long-term vision, AEON identifies Viet Nam as the second most important market after Japan in its investment strategy. In 2024, the group will continue to accelerate expansion with various business formats, while also boosting its e-commerce channel and enhancing products under its private brand products produced in Viet Nam according to AEON standards. This will continue to contribute to the community's socio-economic development for shared prosperity.
Overcoming challenges
In 2023, several factors affected the Vietnamese economy in general and the retail sector in particular, such as global inflation and rising raw material prices, which increased living costs. This has impacted consumer buying behaviour, most noticeably in the way consumers tightened their spending, prioritizing only essential items, thus leading to a decrease in the value of their shopping baskets.
In this challenging environment, AEON has made efforts to "sail against the wind, steady the oars" to achieve its growth objectives in Viet Nam. Specifically in the retail segment, AEON Viet Nam has recorded growth, with sales increasing by 4-5 per cent compared to the previous year, and the number of customers has increased by 3-4 per cent.
To achieve these results, AEON has made continuous efforts to innovate in response to market changes and customer needs, while also stabilising prices through various initiatives. Specifically, AEON Viet Nam has collaborated with suppliers to adjust the purchase prices of products, managed transportation and delivery activities effectively and improved the efficiency of operations to maintain product prices for customers. This approach creates value for all three parties: customers, suppliers, and the business.
Concurrently, 2023 was also a pivotal year for AEON Viet Nam as it concentrated resources and prepared for a breakthrough plan for 2024. "In 2023, we continued to intensify our business activities according to the Mid-term Strategy, and we have made quite comprehensive preparations in all aspects, which can be seen as a stepping stone to accelerate market expansion in 2024," said Mr. Furusawa Yasuyuki, a Member of the Board of Executive Directors at AEON Group (Japan) in charge of the Vietnamese market and General Director of AEON Viet Nam.
Ready to break through with the strategy for 2024
Affected by the global economic context, the trend of consumer thriftiness is expected to continue in 2024. Although the retail market still has room for growth in 2024, a sudden increase in sales is unlikely. However, in the long-term vision, AEON still views Viet Nam as one of its two key markets alongside Japan in its
investment strategy, with many advantages and favourable conditions for continued growth.
Therefore, AEON will continue to increase its investment in Viet Nam to build an ecosystem that delivers value to stakeholders, contributing to the creation of a sustainable and prosperous life for people in the areas where AEON is present, through the integration of the three core business pillars of AEON Group in Viet Nam: Shopping Mall Development, General Retail Business, and Financial Services Business.
To realise this goal, AEON aims to increase its touchpoints with Vietnamese consumers through accelerating the opening of new business locations, maximising the use of digital technology, developing private label products such as TOPVALU, HÓME CÓORDY and My Closet, and continuing to collaborate with the community for sustainable development.
Accelerating the opening of many centres and supermarkets in 2024
By the end of 2024, the total number of business locations of AEON'S member companies in Viet Nam is expected to exceed 160 sites, including shopping malls, supermarkets, specialised stores, general merchandise stores and supermarkets (GMS & SM), convenience stores, and
children's play areas. Among them, AEON Hue Shopping Mall will officially commence operations by the end of the year, marking AEON'S first venture into central Viet Nam after establishing itself the North and the South. Additionally, three other GMS & SM along with AEON Maxvalu supermarkets will continue to open throughout this year. The business will also simultaneously upgrade Citimart supermarkets in the Southern region to provide a more convenient and economical shopping experience for customers.
"In 2024, AEON Viet Nam plans to open a variety of stores with different models and scales. Not only located within AEON shopping malls, but we will also expand and develop further at the shopping centres of other partners. Although the areas vary, all AEON Viet Nam touch points fully meet customer needs from food, household goods, mother and baby products and fashion," Mr. Furusawa Yasuyuki stated.
Enhancing AEON Eshop e-commerce
Alongside increasing direct customer contact points, AEON will continue to refine its e-commerce system to prioritize customer convenience while helping to boost business operations. This includes deploying a unified points system across all AEON group companies in Viet Nam to provide convenience and the best experience for customers.
Previously, in October 2023, this Japanese retailer officially launched a new look and many new features for the AEON Eshop e-commerce site. With these improvements, AEON Viet Nam expects the growth of AEON Eshop to reach about 20 per cent in 2024 and 50 per cent in the following years.
"We hope that customers shopping directly or online will have the same experience. With online shopping, AEON always strives to improve utility and function, such as buyers being able to schedule delivery times, or for fresh or perishable food items, the company will have a dedicated delivery team to ensure the freshness of the products reaches customers as quickly as possible," Mr. Furusawa Yasuyuki emphasized.
Boosting private brand products made in Viet Nam
Regarding the product strategy, AEON will continue to enhance the development of its private brand products manufactured in Viet Nam, aiming to serve both domestic and overseas markets, thereby supporting local suppliers in improving production capacity and promoting Vietnamese products to other markets.
In 2023, AEON piloted the export of some private brand products made in Viet Nam such as noodles and vermicelli to markets in Malaysia and Hong Kong (China), where they received high ratings. This demonstrates the significant export potential of private brand products. Therefore, increasing the production of domestically manufactured private brand products for domestic consumption and export will bring profits to local manufacturers and contribute to the economic development of Viet Nam.
In 2024, AEON Viet Nam will add to its catalogue new product groups; specialised sales areas with specialised stores, focusing on selling a group of products/serving specific needs such as My Closet, Sport & Activity and HÓME CÓORDY (furniture, household items) to increase convenience and enhance the shopping experience for customers when searching for product groups that meet specific needs.
In 2023, we continued to intensify our business activities according to the Mid-term Strategy, and we have made quite comprehensive preparations in all aspects, which can be seen as a stepping stone to accelerate market expansion in 2024," said Mr. Furusawa Yasuyuki, a Member of the Board of Executive Directors at AEON Group (Japan) in charge of the Vietnamese market and General Director of AEON Viet Nam."
Mr. Furusawa Yasuyuki emphasized.
Joining hands to realize Viet Nam's sustainable development goals
In addition to the business expansion strategy, AEON Viet Nam continuously strives for sustainable development activities, based on three pillars: Economic - Social - Environmental.
At AEON Viet Nam, sustainable development is not just individual initiatives, but a desire to contribute to the realisation of Viet Nam's Sustainable Development Goals as a retailer.
In 2024, the companies within the AEON Group in Viet Nam will continue to work closely to deploy AEON'S sustainable development activities. In addition, they will enhance activities connected with the local community, such as launching the AEON Cheers Club - an activity long implemented in Japan to provide children with educational programs and real-life experiences at AEON'S general merchandise stores and supermarkets, giving them opportunities to play and learn about environmental issues around them.
Furthermore, AEON will continue to promote activities that encourage awareness of environmental protection. This year, AEON Delight Viet Nam (a company specializing in building management and environmental cleaning services), AEON Mall Viet Nam (a company specializing in developing shopping centres), and AEON Viet Nam will coordinate to implement activities related to the environment and waste management.
"Viet Nam is the second most important market after Japan. AEON Group not only focuses on business expansion plans but also wishes to grow alongside Vietnamese society. We have and will continue to accelerate sustainable development activities and strive to enhance coordination more with stakeholders in building an advanced sustainable business in Viet Nam," Mr. Furusawa Yasuyuki emphasized.