New things catch on fast in Vietnam, but not many things have caught on as quickly as convenience stores

It started two years ago a wave of foreign and local conveniences stores started to sweep downtown Ho Chi Minh City, seemingly in the blink of an eye, with Shop and Gos, Family Marts, 999s and Circle Ks popping up on almost every other corner.

It started two years ago a wave of foreign and local conveniences stores started to sweep downtown Ho Chi Minh City, seemingly in the blink of an eye, with Shop and Gos, Family Marts, 999s and Circle Ks popping up on almost every other corner.

The growth continues and these air-conditioned, 24-hour shops specialising in foreign snacks and groceries are now expanding out of the city centre and into nearly every urban district of the city.

For many foreigners, US-based Circle K is the most recognisable of the modern grocery chains fanning out across Vietnamese streets, if for no other reason than its place at the centre of Bill and Ted’s Excellent Adventure.

Every circle has its centre, and for Circle K in Vietnam, that’s Amy Wu, the chain’s managing director.

From Bud to K

After landing in Ho Chi Minh City two years ago fresh off 13 years with Anheuser-Busch in mainland China, Vietnam felt like familiar terrain for the Hong Kong native.

Bringing the world’s second largest convenience store chain to Vietnam was not much different than setting up Budweiser in a China that had never tasted the “king of beers.”

“After China, there were no surprises in Vietnam,” says Amy. She said the two countries were developing in a very similar fashion, at least partially because the people shared the same upbeat attitude.

“Vietnamese [and Chinese] are always looking for something better. This day is better than yesterday, and tomorrow will be better than today,” she adds.

The outlook is a night and day difference from Hong Kong, Amy continues, adding that people there are more cautious and generally anxious about the future, perpetually worried things could get worse. But in Vietnam, entrepreneurs and consumers young and old are willing to take risks and try new things, she says.

“People are positive here, not afraid. Everything is about improvement; the Vietnamese are always looking for improvements, always looking for ways to improve themselves. After work, my employees go to school at night. Those who don’t study, teach.”

Amy is a reserved and thoughtful businesswoman, who gives short and direct answers to questions she’s asked, as if she’s learned to speak in sound bites for TV or radio. But she can’t hide her excitement about Vietnam and her eyes widen when talking about her life here.

“The Vietnamese are the nicest people I’ve ever met. And I’ve been all over.”

Unscathed

However, despite this optimism, Amy and Circle K arrived in Vietnam at possibly the worst moment as the global financial crisis hit in 2008. Five Circle Ks opened at once in October 2009, but she says the chain escaped injury as the crisis slowed manufacturing, but not the retail of everyday foreign goods.

She believes that rapidly-changing Vietnam is in fact the perfect place for Circle K.

“Vietnam is very open to foreign [ideas], and people here learn very fast. If you bring in a good product, they will buy it.”

According to Amy, the food and beverage market is shifting swiftly and that young consumers are increasingly interested in the kinds of foreign concepts Circle K has to offer.

“Over the next few years people will trade up to more premium and indulgent products.”

Big Guy, Little Guy

With big convenience store chains spreading like wildfire, what happens to the small mom-and-pop shops, the traditional markets and the street hawkers?

Circle K is of course not worried this kind of business will alter the face of Vietnam or make it lose some of its charm.

“The modern will never take over the traditional. We [Circle K] can’t eliminate street hawkers,” says Amy.

She says convenience stores can’t actually compete with the more traditional local vendors whose prices and products change all the time anyway. “I’d rather compete with 7-Eleven,” she continues.

Growing Demand

Though Circle K commands a market for cheap products in the US, its goods are still expensive for most Vietnamese. But like most things in Vietnam, this too will change.

“Richer Vietnamese will get better salaries and better jobs with more disposable income, and we’ll become a mass market chain,” she believes.

And mass market is what the company has in mind. Circle K plans to have 11 stores in Vietnam by June, 30 by the end of this year and 100 at the end of next year. With designs set on opening 500 stores in Vietnam over the next ten years, she is both confident and convincing.

“We were originally only going to open franchises after three years of being here. But after six to 12 months, many people began asking about it. It’s a good way to grow as it doesn’t take a lot of capital but enables quick expansion,” says Amy, adding that she hopes three new stores will be open in Mui Ne soon.

For her, trends like these are not about losing an old Vietnam, but more about creating a new one.

While small stores and markets will not be able to compete with giant foreign firms, she is quick to point out that the company’s planned franchise programme could provide a profitable model for small business owners.

And she has a good point: while small operations may be pushed out of business, in theory, company growth and enrichment should also enrich employees with “safe working environments, training, benefits, and opportunities for further education.”
 (Source:  www.wordhanoi.com )