South Korean retailer E-mart to sell retail business in Vietnam: Korea Times

, South Korean retailer E-mart to sell retail business in Vietnam: Korea Times

E-mart, South Korea’s largest retailer, has said it will sell its retail store business in Vietnam to local firm Truong Hai Auto Corporation (THACO) Group after facing a slew of obstacles to expand its operations in the Southeast Asian country, according to the Korea Times.

The Seoul-headquartered English daily reported on Tuesday afternoon that E-mart revealed through a public disclosure the day before that its board of directors had decided to offload a 100-percent stake in E-mart Vietnam Co. to THACO, one of the leading car manufacturers in Vietnam.

Through the deal, E-mart will no longer operate its brand discount store in Vietnam.

The discount store will be run as franchises managed by THACO, which will pay royalty fees to E-mart.

The South Korean retailer expects THACO to open over ten discount stores in Vietnam by 2025.

“Our strategic alliance with THACO will not only pay us royalties for using the E-mart brand in Vietnam, but also give us the opportunity to export our private brand products,” the Korea Times quoted an E-mart representative as saying.

The retail giant entered the Vietnamese market in December 2015 and opened its first discount store in Ho Chi Minh City.

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The number of South Korean products sold at the E-mart supermarket in the southern Vietnamese metropolis increased to 1,200 in 2020 from 170 in 2015, according to the Korea Times.

About 85 percent of the products carry E-mart’s proprietary ‘No Brand’ label.

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Also, 70 percent of No Brand products are made by small and medium enterprises in South Korea.

However, E-mart was unable to open additional stores in the Southeast Asian country, due to the local government’s delays in approving construction plans.

Last year, rumor had it that E-mart had planned to exit the Vietnamese market.

E-mart Vietnam Co. then refuted the rumor despite admitting difficulties in business expansion owing to premises and license barriers.

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The retailer thus changed its strategy by looking for a capable partner in Vietnam to jointly expand its business model.

This article was originally published in Tuoitrenews

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