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.
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$4.8 trillion 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,” IGD Head of Asia-Pacific Nick Miles said. “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.
“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, Mr Miles says convenience stores in the country have become popular destinations for young consumers to shop and gather, providing them with an air-conditioned environment, well-organised shelves and seating areas, high-quality products and, in some stores, free wi-fi.
“It’s also easier to get licences for stores under 500sqm, which is why retailers have been expanding to gain market share,” he added.
IGD says it expects to see retailers and manufacturers across all the region’s key growth markets increasing their investment in convenience, championing innovative new products and formats such as food to go, and working collaboratively to ensure they are making the most of these growth prospects.
|Asian convenience market growth forecast by country 2017-2021|
|Country||CAGR to 2021 (%)|
NB: Retailer sales CAGR growth is calculated based upon the performance of the leading retailers covered by IGD Datacentre.