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Bach Hoa Xanh, Winmart: Vietnam's consumer characteristics create considerable medium-term growth opportunities

• Vietnam's current transportation infrastructure is not yet conducive to strong growth in the automotive market in the medium term. Instead, the population is expected to maintain its “dominant motorcycle culture.” This trend favors the proliferation of traditional markets, convenience stores, and mini-marts such as Bach Hoa Xanh and Winmart, rather than the shopping mall/hypermarket model popular in developed countries like Thailand, China, and the United States.
• Regarding the competition between two models: (1) traditional markets and convenience stores, and (2) mini-mart chains like Bach Hoa Xanh and Winmart, we believe that mini-marts, with their appeal to the fast-growing young population (Gen Y, Z) and higher-income office workers who are gradually replacing the older generation (Gen X), have a strong foundation to quickly gain market share from traditional markets and convenience stores in the coming years from the current low base (~7-8%).
• However, traditional markets still hold significant strengths in terms of low prices, a wide variety of goods, fresh products, and their deep-rooted presence in Vietnamese consumer habits. Therefore, we believe that this model will continue to lead the market with a high share of 60-65% in the medium term, a decline from the current 85%.
• Among the mini-mart chains, Bach Hoa Xanh and Winmart have stood out in revenue growth over the past two years, particularly after their comprehensive restructuring campaigns. We expect these two chains to lead the growth ofthe mini-mart segment in Vietnam in the coming period.