Semi-Retailer_Insight Article

By Nguyen Anh Dzung
Director, Head of Retail Measurement Services - Nielsen Vietnam
and Krishna Kamal Mishra
Associate Director, Client Business Partner, RMS, Nielsen Vietnam

Vietnam market with over 1.4 million traditional trade outlets and vast geographic spread presents a huge challenge to marketers to distribute their products to the last mile. However the growing consumer demand in far-flung areas and accessibility challenge provides some retailers a chance to double up as wholesalers to cater to need of small and medium retailers in those remote areas.

According to Nielsen definition and classification, the semi-retailer outlets are the stores whose part of their sales (10% - 90%) serves as supply to secondary retailers.

Not just Vietnam, it has been observed that these semi-retailer outlets also find relevance in other similar traditional trade markets with vast geography like India & Indonesia. In fact, according to annual Nielsen Retail Establishment Survey in 2015, there is over 25,000 such semi-retailers stores across our nation. They are quite similar to the traditional grocery stores except having a larger space to accommodate larger stocks given that their nature of business which involves 30-60% of bulk sale to other retailers. Not surprisingly, they also handle a much larger product assortment to serve various needs from consumers. As a result, they have a very high volume turnover.

Due to the wholesaling activity and high volume turnover, semi-retailer store was excluded from regular Retail Store Audit of Nielsen to avoid duplication. However, the dipstick studies and market sources pointed to the growing significance of this channel to the end consumer sales. Hence, there was a need to track this channel in addition to the existing retail store audit. And it was found that the semi-retailer channel for Home and Personal Care categories in 36 key cities grew at over 5% in 2016 compared to less than 3% in the rest of urban area. Furthermore, according to Nielsen Nationwide Audit for semi-retailer stores in 2016, this channel accounted for 16% share of the trade in the tracked categories. Especially, home and personal care category found even higher relevance in this channel. It is also observed that the larger packs hold higher fair share in this channel which could be explained by shopper turning to this channel for monthly bulk purchase given the price benefit of 2-5% compared to Traditional Groceries.

The semi-retailer channel thus presents the marketers a set of “Super Retailers” which can provide a great ROI beyond only the high volume turnover. Similar to the existing gold outlets, the semi-retailer outlets provide the opportunity to push a larger portfolio/ assortment and the dual business model also makes it a hotspot for high-impact trade activation. Last but not least, it can also serve as the secondary distribution network to help penetrate into the hinterlands without additional investment.

We are looking forward to hearing from you for exchanging the knowledge and experiences in the effort of understanding this channel landscape and its potentials. Should you want to have a further discussion with Nielsen, let us know. We are more than happy to have a conversation with you.