The retail arm of Thailand’s richest billionaire Tos Chirathivat, Central Group, is negotiating to buy Vietnam based electronics retailer Pico. The speculation about this acquisition follows a recent deal in January, which saw the Thai firm snap up 49 per cent of Vietnam retailer Nguyen Kim.
Although Pico’s acquisition has not been announced, sources from the industry said that Central Group has purchased 49 per cent of Hanoi’s top five largest electronics retailer.
There has been a lot of recent movements in Vietnam’s retail space with mergers, acquisitions and partnerships with foreign players, marking the sector.
Among the most popular retailers in the capital city, Tran Anh Digital has entered strategic partnership with Japan’s investor Nojima Corporation, Media Mart continues to expand and targets a network of 25 stores within this year, while Pico was the least active company.
Pico executives were not immediately available for a comment.
The move to acquire Pico has proven the Thai giant’s ambition to reinforce its presence in Vietnam, after opening two Robins shopping malls in Hanoi and Ho Chi Minh City, and acquiring Nguyen Kim – the country’s oldest retailer. Central Group bought NKT New Solution and Technology Development Investment JSC (NKT) through its subsidiary Power Buy for an undisclosed sum, in January. NKT is the operator of Nguyen Kim store chain of more than 20 outlets nationwide.
The group now holds a majority stake in Nguyen Kim, and has capacity to strengthen and expand its operations in the south of Vietnam.
While Nguyen Kim has announced that it will launch 50 stores all over the country by 2019, Pico is also set to increase its footprints to 20 units from the current six.
The country’s 90 million population, with more than 60 per cent belonging to an active workforce, “makes Vietnam a target market with high potential for growth and an excellent destination for investors in the retail sector,” Chirathivat had said when he launched the first Robins in Hanoi.
The local retail market volume is estimated at $123.8 billion by the end of 2013, and is predicted to grow by about 12 per cent compared to last year, according to a Research and Markets report. The value of this modern trade segment is calculated at 25 per cent of the whole market at this point in time.
Despite a slow growth of the economy during the past three years, Vietnam’s retail sector has attracted global and regional players, particularly because of Vietnam’s commitment to be a completely open market for foreign retailers (since January 2015). In addition, the formation of the ASEAN Economic Community and the Trans-Pacific Partnership will create free movement of goods, services, investment and a freer flow of capital between different countries in the region.