South Korean retailer E-Mart will exit Vietnam after six years of operations in the Southeast Asian country, it revealed in its shareholder meeting documents dated May 17.
The company announced that it has decided to sell 100% of its interest in E-Mart Vietnam Co Ltd, which was opened in 2015. Korean media reported that the buying partner for the deal would be Vietnamese firm Truong Hai Auto Corporation (THACO).
Following the sale, THACO was said to operate E-Mart Vietnam as a franchise.
E-Mart Vietnam had a book value of approximately 138 billion won by the end of March, according to E-Mart’s quarterly earnings report.
Korea’s largest retailer forayed into Vietnam with a supermarket in Ho Chi Minh City, which had an investment cost of $60 million. In 2018, it acquired land with plans to open another store in the city, but the project has been delayed due to some reported legal setbacks.
The firm had even vowed to invest up to 460 billion won in the Vietnam business by 2022.
E-Mart’s Vietnam exit plan was first reported by Korean media in December 2020.
THACO started out as an automotive business and has expanded into construction investment, logistics, agriculture, and retail. In retail, the company has developed the SOCAR SALA commercial complex in Ho Chi Minh City and Yangon Myanmar Centre in Myanmar, according to its website.
THACO is now hoping to expand the E-Mart network in Vietnam to 10 stores by 2025.
String of exits
Prior to E-Mart, a number of global retailers had fled from Vietnam due to stiff competition. France’s Groupe Casino sold its Big C stores to Thai conglomerate Central Group in 2016, METRO Cash & Carry exited the Vietnam business to TCC Group in the same year, and Auchan – another French retailer – left its local assets to Saigon Co.op in 2019.
Meanwhile, the most prominent player in the Vietnamese market is VinMart, which owns more than 120 VinMart supermarkets and around 3,000 VinMart+ convenience stores.
Founded in 2014, VinMart has grown both organically and through acquisitions, having snapped up smaller rivals including Fivimart, Shop&Go, Vinatexmart, Maximark, and Ocean Mart.
Initially backed by local behemoth Vingroup, VinCommerce, the holding entity of the VinMart network, was sold to Masan Group in 2019. Last month, SK Group invested $410 million into VinCommerce.
Meanwhile, Masan has set up The CrownX, an integrated consumer retail platform, by merging VinCommerce and its FMCG unit Masan Consumer Holdings. On Tuesday, the group announced that a consortium co-led by Chinese giant Alibaba and Baring Private Equity Asia has acquired a 5.5% stake in The CrownX for $400 million.