SonKim Retail wins global award as Vietnam retail flourishes
By Celine Chen
VIETNAM, NNA - SonKim Retail Corp., one of Vietnam's most established retail companies, has won a global award for the best retail brand of Vietnam for 2020.
Given by Global Brands Magazine (GBM), an international publication headquartered in the UK, the recognition comes under its global brand awards that celebrate companies that achieve excellence and keep readers updated on trends in the branding world.
SonKim Retail, which operates a multi-channel retail business, was evaluated for its customer service, digital innovation, strategic partnership, and new business development.
On SonKim Retail's success in growing so many business segments, ShivKumar, CEO of Global Brands magazine, said in a press release, "SonKim scoops up this award for their continued excellence in multiple retail sectors, including fashion, lifestyle, FMCGs, logistics, health, and manufacturing. It's already a considerable enough achievement for a company to excel in one of these sectors, but SonKim has done it in all of them."
SonKim Retail is part of the huge SonKim Group which also develops luxury real estate in Vietnam. Apart from offering a spectrum of consumer goods and services, it also operates a TV shopping network, spas as well as restaurants such as the Watami chain.
The COVID-19 pandemic sparked a health crisis as well as an economic crisis globally. And Vietnam is no exception, said Phi Nguyen, CEO of SonKim Retail, who noted how businesses from big department stores to entertainment outlets were affected.
Despite the tumultuous period, SonKim managed to soldier on by continuing to transform its businesses to stay relevant and resilient.
Earlier this year, it launched the SonKim Lifestyle Innovation Center with its first location in Ho Chi Minh City to support start-ups in the field of fashion and creativity.
It also serves as a hangout for young people to enjoy new food creations as well as a showcase for lifestyle offerings from SonKim Retail's evolving ecosystem.
Nguyen said, "With the determination of our leadership and staff, we quickly restructured the company. SKR has changed from a retail business to an investment company, and as a result, developed internal management systems for the investment holding and portfolio companies. Business units must work together to bridge our heritage, culture, and strength, which is more important now than ever before."
This transformation helped SonKim to score well on criteria ranging from a unique omni-channel and multi-business ecosystem to a good performance which saw a 43 percent jump in revenue last year.
Every single business unit showed outstanding growth, Nguyen reported.
Performing especially well are its Korean-partnered GS25 stores, VGS Shop which offers TV and online shopping, and clothing affiliate SonKim Mode.
The GS25 chain expanded to over 100 stores across Vietnam in 2020, becoming the fastest-growing convenient-store chain in the country.
SonKim Mode is currently owning and franchising leading underclothing, sports and house clothing brands in Vietnam and worldwide such as Jockey, Vera, Wow, Misaki and J.BUSS. SonKim Mode has nearly 100 stores and more than 300 points-of-sale in Vietnam.
Beginning as a garment manufacturer in the mid-1950s, SonKim also focused on developing e-commerce solutions for every unit's business partners so that they could continue to provide services to customers during crucial periods of social distancing. This has enabled e-commerce revenue to grow remarkably well.
Proud to be one of the most successful retail players in Vietnam today, Nguyen said the company is currently building a scalable infrastructure and making new investments in the retail industry this year. It will also continue to boost its franchise business and partnerships with brands in its ecosystem.
"Aside from the fact that SonKim Retail has provided a massive number of jobs for Vietnamese people, we have also gained the trust and support from our customers and partners resulting from our unending commitment to improving the quality of our services," said Nguyen who oversees the business from his headquarters in Ho Chi Minh City.
The presentation ceremony for the global brands awards will be held at the Palm Jumeirah-Waldorf Astoria in early 2022 in Dubai.
According to Reportlinker.com, which provides market research solutions, the Vietnamese retail sector was valued at $170 billion in 2020. It is projected to grow at a compound annual growth (CAGR) rate of more than 10 percent from 2021 to 2026.
Reporterlinker said, "Vietnam is seeing ongoing urbanization and evolving demand trends amongst young urban consumers drive strong growth in modern retailing channels such as convenience stores, as well as the rapid expansion of e-commerce. Indeed, the growing influence of such factors can be seen in the emergence of formats such as mini supermarkets, which target demand for grocery shopping that fits into the flow of busy urban lifestyles."
The research firm noted that modern retail outlets also offer brands and products that are exclusively available there, while supermarkets are now selling products better suited for the daily needs of the average consumer.
It said, "Food products, non-food products, and home appliances are also offered in supermarkets, which makes shopping easier, as they offer everything needed for the customer under one roof. To further improve the shopping experience, some stores have in-house bakeries and cafés where consumers can hang out and enjoy with family or friends."
However, locals also shop at traditional markets and shops due to their convenient availability everywhere in the country. They offer comparatively lower prices and better supplies of fresh produce, while allowing customers to bargain and buy small quantities for a day's consumption.
Vietnam’s disposable income per capita is expected to rise quickly to reach $3,062 in 2023. In Southeast Asia, Vietnam’s total consumer spending has grown at the highest rate of more than 8 percent a year, surging from $118 billion in 2013 to $185 billion in 2019, said Reportlinker.
The private-consumption rate is also high, accounting for more than 67 percent of the GDP. This is the second highest in the region, behind the Philippines (73.8 percent) and ahead of Malaysia and Indonesia (57 percent and 57.3 percent respectively).
While Vietnam’s urbanization rate is still low in the region, it means it has high-growth potential. Its urban population is expected to grow at a CAGR of about 3 percent from now to 2025, or faster than Indonesia, Malaysia, the Philippines, and Thailand, said Reportlinker.