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Investment funds eye Vietnam’s market for mother, child products
The Hanoitimes – Vietnam`s market for mother and child products have lured the participation of both foreign and domestic investment funds as its value is projected to reach US$7 billion with annual growth rate of 30-40% next years.
The Daiwa-SSIAM Fund II, the second partnership between Japan’s Daiwa Securities and Vietnam’s SSI Asset Management, has recently invested an undisclosed sum, estimated at US$4-6 million, in the mother and baby retail chain Concung.com.
According to the fund, the retail chain’s competitive advantages are its professional founders and management team, its deep roots in information technology and system management, and strong experience in retail operations and development.
Meanwhile, ACA Investments, the private equity arm of Japan’s Sumitomo Corporation, has also paid an undisclosed sum to pick up a 20% stake of Vietnamese baby product retailer BiboMart with the ambition to take its available advantages to become the dominant baby and mom retailer in Vietnam.
Starting out with only two stores in 2006, BiboMart now has 120 stores. It is expected that by the end of this year, the number of its stores will double over 2016’s figure to reach 180 and then 500 by the end of 2019.
Vietnam Investment Group (VIGroup), a Vietnamese private equity firm, has recently become a minority shareholder in Kids Plaza, a local retail chain for maternal and baby products. The value of the deal was not disclosed.
Founded in 2009 by CEO Do Van Tuan, Kids Plaza now has 72 outlets in four major cities and provinces – Hanoi, Ho Chi Minh City, Hai Phong and Bac Ninh province – along with an online retail channel and sells more than 10,000 products for mothers and children.
Billion-dollar market
With 12% of families having children aged below one and 20% of families having one- or two-year olds, the highest proportion in South East Asia, Vietnam is a promising market for companies which provide goods and services for mothers and children.
The country’s population will be nearly 97 million by early 2019 while natural population growth is predicted to be positive, as the number of births will outnumber deaths by 997,715 people.
According to researchers at Intage Vietnam, there are some 1.6 million babies born every year in Vietnam.
All of the current conditions facilitate the development of the market. Nielsen noted that the middle class has been growing rapidly in Vietnam and parents tend to spend more money on children’s studies and food.
In developed markets, where birth rates are low and the baby-care product market is saturated, the growth is driven by product innovation and upgrading, while in developing markets, increased demand is the biggest growth engine.
Analysts have also noted the changes in consumers’ habits as mothers now tend to shop at retail chains specializing in mother-care and baby-care products, instead of traditional markets and department stores.
Mothers’ spending is high enough to attract foreign retail chains and investors. Most recently, Mothercare, the British retailer, specializing in the UK-standard products for mothers and kids up to five years old, officially set foot in Vietnam.
Despite the high growth rate of 30-40% of the market, analysts said that not all retailers can succeed. Some foreign big names such as Kids World, Deca, Beyeu and Babyso came to Vietnam but had to leave later.
Trinh Lan Phuong, CEO of BiboMart, admitted that it is difficult to do well in the market.
Industry insiders said that the existing retail chains in Vietnam mostly serve the needs of popular consumers, not middle- and high-income earners, who are willing to spend big money.
Meanwhile, ACA Investments, the private equity arm of Japan’s Sumitomo Corporation, has also paid an undisclosed sum to pick up a 20% stake of Vietnamese baby product retailer BiboMart with the ambition to take its available advantages to become the dominant baby and mom retailer in Vietnam.
Starting out with only two stores in 2006, BiboMart now has 120 stores. It is expected that by the end of this year, the number of its stores will double over 2016’s figure to reach 180 and then 500 by the end of 2019.
Vietnam Investment Group (VIGroup), a Vietnamese private equity firm, has recently become a minority shareholder in Kids Plaza, a local retail chain for maternal and baby products. The value of the deal was not disclosed.
Founded in 2009 by CEO Do Van Tuan, Kids Plaza now has 72 outlets in four major cities and provinces – Hanoi, Ho Chi Minh City, Hai Phong and Bac Ninh province – along with an online retail channel and sells more than 10,000 products for mothers and children.
Billion-dollar market
With 12% of families having children aged below one and 20% of families having one- or two-year olds, the highest proportion in South East Asia, Vietnam is a promising market for companies which provide goods and services for mothers and children.
The country’s population will be nearly 97 million by early 2019 while natural population growth is predicted to be positive, as the number of births will outnumber deaths by 997,715 people.
According to researchers at Intage Vietnam, there are some 1.6 million babies born every year in Vietnam.
All of the current conditions facilitate the development of the market. Nielsen noted that the middle class has been growing rapidly in Vietnam and parents tend to spend more money on children’s studies and food.
In developed markets, where birth rates are low and the baby-care product market is saturated, the growth is driven by product innovation and upgrading, while in developing markets, increased demand is the biggest growth engine.
Analysts have also noted the changes in consumers’ habits as mothers now tend to shop at retail chains specializing in mother-care and baby-care products, instead of traditional markets and department stores.
Mothers’ spending is high enough to attract foreign retail chains and investors. Most recently, Mothercare, the British retailer, specializing in the UK-standard products for mothers and kids up to five years old, officially set foot in Vietnam.
Despite the high growth rate of 30-40% of the market, analysts said that not all retailers can succeed. Some foreign big names such as Kids World, Deca, Beyeu and Babyso came to Vietnam but had to leave later.
Trinh Lan Phuong, CEO of BiboMart, admitted that it is difficult to do well in the market.
Industry insiders said that the existing retail chains in Vietnam mostly serve the needs of popular consumers, not middle- and high-income earners, who are willing to spend big money.
Source: http://www.hanoitimes.vn/investment/2018/06/81E0C90E/investment-funds-eye-vietnam-s-market-for-mother-child-products/