Korea’s Emart to phase out of Vietnam

15:01 | 09/12/2020
South Korea’s largest supermarket chain operator Emart Inc. is pulling out of Vietnam, its second major Asian market after China, in the face of regulatory hurdles.
koreas emart to phase out of vietnam
 

According to reports by Pulse News, The retailer opened its first outlet in Vietnam’s Go Vap district in 2015 and procured a site at Ho Chi Minh City for a second opening last year. The project has been delayed due to licensing setbacks, disrupting plans to open 5-6 more outposts.

Emart’s foray into Vietnam has not been easy as the country prioritises joint ventures with foreign businesses to set up outlets. Emart started operations in the country in 2014 after setting up a wholly-owned Vietnamese entity.

A retail industry source said a hypermarket needs at least 10 outlets to have a bargaining power with vendors and maintain logistics efficiency. Emart may have concluded that it was better to fold business rather than holding up, the source added.

The retailer has been rolling back investments in the country. In its 2019 semiannual report, it had vowed to invest KRW460 billion ($424.3 million) in its Vietnamese entity through 2022. But it had slashed that amount to KRW247.8 billion in the third-quarter report.

An Emart representative, however, denied the company was exiting but was studying other options such as strategic alliance or business partnership.

By Thanh Van

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional

Latest News ⁄ Investing

Based on MasterCMS Ultimate Edition Ver 2.9 2020