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Since November 2016, 7-Eleven has been recruiting senior staff for its subsidiary in Vietnam. On May 31, 2017, the convenience store chain was still looking for service staff as well as store managers, assistants for the purchasing department, and product development assistants.
Thus, 7-Eleven has joined the Vietnamese market sooner than Nikkei had expected. At the middle of 2015, after the announcement of cooperation between 7-Eleven and Seven System Vietnam, the Japanese financial newspaper forecasted that the first 7-Eleven store in Vietnam will open in February 2018.
According to the newly-released information from parent company Seven & I, Seven System Vietnam JSC will develop its business by contributing to the modernisation of retail trade, enhancing the shopping experience for customers in Vietnam and introducing franchised stores in the future. During the initial phase, a market-concentration strategy will be implemented to expand the business first in Ho Chi Minh City, then take on other areas later.
The product assortment will focus on products in high demand in the local market and differentiated private brand products that suit local customers’ preferences. Additionally, by implementing the product development methodologies of Seven-Eleven Japan Co., Ltd., the product assortment will also focus on popular rice products and original fresh food products.
Seven-Eleven Japan Co., Ltd. (a wholly-owned subsidiary of Seven & I Holdings Co., Ltd.) in cooperation with 7-Eleven Inc. (the master franchisor of 7-Eleven globally, with a network of more than 62,000 stores in 17 countries and regions) has been supporting the existing area licensees. The two companies have been supporting the master franchisee in Vietnam as a joint international expansion team since the preparation phase of the first store opening.
The two companies’ support included the implementation of 7-Eleven’s unique business methodologies and processes, such as the market concentration strategy, team merchandising, and item-by-item management. Seven-Eleven and 7-Eleven will continue to work together to further strengthen and promote business in both existing markets and new market entries as a global strategy.
7-Eleven will step up to the ten existing convenience stores brands in Vietnam, including Vinmart+, Circle K, Shop & Go, B’s mart, FamilyMart, and Ministop. Of them, Vinmart+ and Circle K are considered the two biggest rivals of 7-Eleven.
The emergence of 7-Eleven will intensify competition in the Vietnamese market. In May 2017, Reuters reported that a chain of convenience stores from Japan, called FamilyMart, planned to withdraw from Vietnam.
“We cannot continue to pour in resources,” Koji Takayanagi, representative director and president of FamilyMart UNY Holdings Co., told Reuters in an interview about the future of the company. While FamilyMart is profitable in Taiwan and China, it is reviewing its loss-making businesses in Thailand, Vietnam, and Indonesia.
Japanese retail giant Seven & I Holding Group generated a revenue of over $53 billion in 2016. According to the company’s annual report, in the fiscal year ending on February 29, 2016, its convenience store segment recorded a 1.9 per cent decline in revenues, falling to ¥2,675.8 billion ($24.5 billion), while operating income rose 9.9 per cent, to ¥304.1 billion ($2.8 billion).
2017 is expected to witness intense competition among different convenience store brands, as Vinmart+ plans to open more than 1,000 stores, while Ministop, another convenience store chain rapidly expanding in Vietnam, targets to open 800 stores, hoping to double this in the next year.