They have long opening hours, low prices and often an exclusive assortment. This is also why Vietnamese convenience stores are doing so well in the Czech Republic. With their business strategy, they are able to maintain themselves even in places where Czech networks have given up. At the same time, domestic merchants confirm that the number of Vietnamese convenience stores has been growing for a long time. Currently, it already has a larger share of the Czech market than the more popular foreign chains.
Jiří Králíček works as manager of the Bala retail network, whose members manage 1,250 stores. More than 60% of them are owned by Vietnamese owners and, according to Králíček, their share is increasing every year.
“Czech operators have been able to resist the expansion of foreign chains. Those who started their business in the 1990s, but are currently retiring, and if they don’t have a successor in the family, will offer the store for sale or for rent. And in most cases, it is the Vietnamese who turn to the traders,” he describes the situation on the Králíček market.
It is typical for the Vietnamese to prefer entrepreneurship to employment, and most often in retail. More than 54,000 people with Vietnamese citizenship live in the Czech Republic, of which more than 20,000 run businesses, according to data from the Ministry of Industry and Trade.
As early as 2015, the Association of Small and Medium-sized Enterprises and the Self-Employed said that 18,000 Vietnamese nationals do business in retail. However, it has no more recent data.
They are more efficient, admits the trade association
Commerce and Tourism Association president Tomáš Prouza also confirms that the number of Vietnamese convenience stores is still growing. “They are taking over more and more shops from small Czech chains because they can operate much more efficiently,” he points out.
According to Prouza, Vietnamese convenience stores with a market share of around 23% are even the largest retail chain in the country. For comparison, Lidl, as the largest chain with nearly 300 stores and around 8,300 employees, has a market share of around sixteen percent. “Vietnamese convenience stores look like small independent shops, but they are very well coordinated, centrally managed, have common purchasing, a common information system, and a common discount policy,” says Prouza.
On the other hand, Vietnamese representative on the Governing Council for National Minorities, Huu Uyen Pham, told E15 newspaper that Vietnamese convenience stores are mostly family businesses operating as independent units.
Growth especially in cities
In addition to the Bala sales network, the Czech Republic also has a significant share of stores with Vietnamese operators, the Můj obchod network, which is owned by the Makro chain. “We have a relatively large number of Vietnamese merchants in the Můj obchod alliance, which corresponds to the trend that is noticeable in the field of traditional retailing,” confirms Můj obchod franchise manager Miroslav Pácl.
Pavel Březina of the Czech Traditional Trade Association adds that Vietnamese convenience stores are increasing especially in cities. According to him, the situation is more complicated in villages and smaller towns – according to him, few people want to take over closed shops in these places.
A different business strategy is successful
According to the experts interviewed, Vietnamese grocery stores are doing better than Czech ones mainly due to a different business strategy. They notably mention long working hours, minimal labor costs, but also a different and more complete range of products.
These “family” shops are typically run by married couples, where the husband supplies the supplies and the partner sells the goods. “Vietnamese businessmen usually have lower overhead costs: the whole family works there and often lives in the building,” explains Králíček of the Bala network.
Dinh Van Hoi, a board member of the Czech-Vietnamese company, agrees with this, and also points out that the couple often involve their descendants in running the company.
Pácl of the Můj obchod network also mentions the generous working hours, which are often seven days a week, from early morning to late evening. It is also open on public holidays. “The customer can be sure that it’s open almost whenever he needs it,” she confirms.
Also, people may come across less common goods in stores. “These are Asian specialties, sweets of various brands imported from Poland or Turkey, and probably everyone will be surprised by the large number of types of drinks in cans and with different tastes,” continues Pácl.
Interest despite the higher price
Vietnamese convenience stores can compete with large foreign chains such as Lidl, Kaufland or Albert, although they often sell goods at higher prices. “Since they often buy goods massively in supermarket promotions, they then have to add a little to those goods, so they are priced slightly higher,” Prouza believes.
However, Králíček of the Bala network believes that the higher prices in Vietnamese convenience stores are not caused by a higher margin by the merchant, but by a higher purchase price by the supplier.
“Of the categories in which Bala stores are comparable to chains, are, for example, sausages, for beer there are differences in promotional prices of five to eight percent, which is mainly influenced by logistics. The brewery will place 20 cases in the our shops, and a whole car at the supermarket”, concludes the Rabbit.
