Central Retail, the group’s core retail arm, has set aside 30 billion baht (US$848 million) to invest in Vietnam, where it intends to increase sales to 100 billion baht over the next five years, up from the current 38.6 billion baht, according to its business strategy published in its annual report.

The plan matches analysts’ forecasts, which expect Vietnam’s resilient economy to keep growing after the pandemic. These forecasts see the country’s retail sector growing 9% per year to around US$150 million.

“Central Retail has a strong presence in Vietnam, a market it entered more than 20 years ago,” a Kasikorn Research Center analyst said.

“This time it will shift its investment focus from brick-and-mortar stores to technology to expand its selling platform and gain a greater customer base.”

Central Retail has 340 malls and stores as well as 10 retail brands in Vietnam, including Go! Mall, Nguyen Kim, SuperSports and Top Market, spanning the sales of electronics, to sportswear to groceries.

The company also has BipBip, an e-commerce food and grocery shopping platform that stocks more than 12,000 items and has a 12 million-strong customer base.

Central Retail hopes that its 30 billion baht investment will help it to become Vietnam’s biggest food and property retail platform.

Apart from expanding existing operations, it will also seek to buy businesses that can help to expand its reach.

The company is pushing a business strategy it calls “omnichannel” that lets online consumers choose whether to pick up their orders or have them delivered. Central Retail expects omnichannel sales to make up more than 15% of the company’s total over the next few years, up from the current 8%.

In addition, it sees its Vietnam operations contributing more than 25% of the company’s total sales, up from the current 20%.

The retail arm also has Italian department store chain Rinascente under its management, and on Thursday announced it had completed the acquisition of British retailer Selfridges Group with partner Signa Holdings.

While analysts expect Vietnam’s retail business to grow substantially in line with the economy, competition is increasing as more foreign players enter the market. Before Covid, the country’s economy was growing at an average rate of 5% to 8% a year. In 2021, that slowed to 2.6%.

“It’s the right timing for Central to focus in Vietnam as business is growing, however, competition is also very intensified with both local and foreign brands jumping in,” said analyst firm SCB Economic Intelligence Center.

For now, the major Vietnamese retailers are Saigon Co Op, Winmart, and Mobile World (which sells electronics), while Japan’s AEON, South Korea’s Lotte Mart and another Thailand’s retailer Berli Jucker have also entered the market.

At home, Central Retail plans to invest another 18 billion baht through Central Food Retail, aiming to increase its stores to 1,700 locations over the next five years, up from 760 now.

The company is trying to reach a high-end clientele with its “Tops Club” shopping membership that will give access to more than 3,500 imports from well-known global food brands, said Stephane Coum, CEO of Central Retail (Food Group).

With continued investment, expansion and acquisitions to help boost business throughout the Covid pandemic, Central Retail posted a net profit of 2.7 billion baht in the first half of 2022, reversing from a net loss of 70 million baht in same period last year. However, the first-half figure is still well below the 12.4 billion baht net profit it made in 2019 before the pandemic.

Like many retail companies, the company’s business at home and abroad last year suffered from the Delta-variant outbreaks that caused lockdowns and business disruptions.

Central Retail listed on the Stock Exchange of Thailand in February 2020, launching its initial public offering at 42 baht per share and aiming to raise 78 billion baht for business expansion largely in Thailand and Vietnam.

At that price, Central Retail’s market cap was 253.3 billion baht, making it the 13th largest company on the exchange. However, Central Retail shares closed at 39.25 apiece on Wednesday, below its IPO price of 42 baht.

Analysts said Central Retail is likely to face another year of hardship before it can reach pre-Covid profit levels.