7-Eleven is expected to open their first store in early 2017 and the convenience store industry in Vietnam is already preparing for the competition.
The international convenience store chain has signed a master franchise agreement with Seven System Vietnam, who is a new startup by a Vietnamese restaurant chain. The company expressed their excitement about this Asian expansion:
“7-Eleven’s entry into the country aims to enhance the convenience-shopping experience for Vietnamese customers and contribute to modernizing small retailers in the world’s 13th most populous country”.
As the largest convenience store retailer in the world, 7-Eleven has 56,400 stores in 18 countries across the globe and net revenues of $85+ billion USD. On a global basis, 7-Eleven opens 10 new stores every day, with 4,000 new stores opened last year. The company’s vision is to open 100 stores in Vietnam within 3 years, and then expand this to 1,000 stores in 10-years.
Although the exact date and location isn’t confirmed, the first 7-Eleven store in Ho Chi Minh is expected to open in April / May 2017. Seven System Vietnam Co. will receive product development and other know-how fostered in Japan from Japanese staff that will be sent to Vietnam by Seven-Eleven Japan.
To position themselves against competitors, 7-Eleven Vietnam will offer their international popular products such as Slurpee frozen beverages and Big Gulp soft drinks, as well as immediately consumable fresh foods with recipes developed for regional tastes. The combination of international and Vietnamese inspired products along with Vietnamese staff that are trained to Japanese standards is an combination that the company hopes will make it popular with consumers and give it an advantage over competitors.
Although still relatively new, the convenience store brands competition is highly competitive and includes competitors such as B’s Mart, Circle K, Family Mart, Mini-stop, Shop & Go and Vinmart+ and there are more than 1,000 convenience stores in HCMC alone.
The biggest impediment to 7-Eleven’s growth in Vietnam may be the fact that competitors have already secured the best real estate positions in HCMC, Hanoi and other cities. Retail real estate in prime locations and developments will be at high prices and may affect the prices that it charges Vietnamese consumers in a negative way.
Another potential problem for the company is the ability to procure products that meet 7-Eleven’s Japanese and international quality standards. McDonald’s had a similar problem with its Vietnam launch and was delayed in product offerings and their have been countless products that have been launches and then killed in the convenience store market.
7-Eleven’s entry will bring heat to the Vietnamese convenience store market and forces the existing convenience store brands to review their product, retail location, staff and marketing plans so that they can continue to be competitive against other brands and have a special place in the hearts and minds of Vietnamese consumers.