HANOI -- Seven-Eleven has opened its first convenience store in Vietnam, marking the beginning of its effort to catch and surpass rivals that have already carved out some turf.
The Vietnamese market for such stores looks destined to grow, given the country's brisk economy and progress on deregulation. Seven-Eleven is already the world's largest convenience store operator, with some 62,000 outlets worldwide, and it had been keen to break into the promising Southeast Asian country for a while.
Last Thursday, it did just that, opening a location in the multifunction Saigon Trade Center in Ho Chi Minh City.
Seven-Eleven found a local partner in a company called Seven System Vietnam, which is based in the commercial hub. Seven-Eleven's parent, Seven & i Holdings, began negotiations with Seven System a year and a half ago, according to President Ryuichi Isaka.
From there, the opening of the first store happened "extraordinarily fast," Isaka said.
One person who helped make it happen was Vu Thanh Tu, the CEO of Seven System. At the opening ceremony, he delivered a speech in fluent American English, and expressed his pride in introducing the 7-Eleven brand -- born in the U.S. 90 years ago -- to the country.
Tu is of ethnic Vietnamese descent, and his parents migrated to the U.S. His career reportedly includes stints at financial institutions, including an investment fund.
Behind the scenes, another highly influential local figure seems to have been involved.
Asked who took the lead in the negotiations, Tu avoided the question, saying he did not understand its intent. But Japanese and Vietnamese sources said Henry Nguyen played a pivotal role.
Nguyen, the son-in-law of former Prime Minister Nguyen Tan Dung, introduced the Starbucks coffee chain to Vietnam in February 2013 and McDonald's, the fast-food giant, a year later.
He did not join Isaka and Joseph DePinto, the CEO of U.S. subsidiary 7-Eleven Inc., at the opening of the Ho Chi Minh City store. But it is easy to imagine him pulling strings and drawing on his experience bringing other big American brands to Vietnamese stores.
In any case, Seven-Eleven Japan and Seven System shared an interest in quickly wrapping up their talks: They did not want to miss a wave of reform in the Vietnamese retail industry, and lose a chance to catch up.
Vietnam in May 2016 took an important step toward market liberalization. It changed the rules so that operators of small retail shops -- with floor space of 500 sq. meters or less -- no longer needed to seek approval from the authorities.
This sent local real estate leader Vingroup scurrying to open more of its Vinmart+ convenience stories, expecting that a wave of new openings by foreign retailers was just a matter of time. In a little more than a year, Vingroup opened some 1,000 outlets.
Prior to this rush, Vietnam's convenience store market had been shaped by U.S. player Circle K, which entered the country in 2008, and Japanese operators FamilyMart and Ministop, which followed suit in 2009 and 2011, respectively. They have been operating primarily in Ho Chi Minh City, where regulations were less strict to begin with, and they have yet to create nationwide networks.
After the deregulation, all signs point to a rapid expansion of the market.
Vietnam is home to 93 million people with an average age of 29, and it is maintaining an economic growth rate of around 7% -- the highest in Southeast Asia. Seven-Eleven, Nguyen and Tu are hardly the only ones looking to capitalize on this.
Thailand's Charoen Pokphand Group is high on the list of companies with a shot to establish a formidable presence in the Vietnamese convenience store game.
The conglomerate brought its CP food brand to Vietnam in 1993 and captured a large slice of the market for ham and sausages. It has a number of plants in Vietnam and many loyal customers. It can also transport merchandise between Thailand and Vietnam by land, and produce common private-brand products for the two markets.
What is more, it has a lot of experience with convenience stores already -- 7-Elevens, to be precise.
CP All, a group unit, runs around 10,000 7-Eleven stores in Thailand, making it the brand's largest chain outside Japan. With an original management system based on the CP group's expertise on meat storage, food processing, logistics and other operations, 7-Eleven stores in Thailand are "more advanced" than those in Japan, said one Japanese trading house official assigned to the Southeast Asian country.
Malaysia's Berjaya Group is another leading candidate to make its presence felt in Vietnam. Berjaya is a large, ethnic-Chinese-run company operating more than 2,000 7-Eleven stores in its home market. Other operations include Mazda car dealerships, Starbucks cafes and Krispy Kreme doughnut shops. The founding family has reportedly opened convenience stores in Vietnam in collaboration with another store chain.
In principle, Seven-Eleven Japan does not grant a single partner the right to operate its convenience stores in more than one country. CP and Berjaya, therefore, abandoned hope of bringing the brand to Vietnam after some furious attempts.
Seven System has a modest plan to open 100 7-Elevens by 2019. Considering Vietnam's economic growth potential, however, it is expected to eventually open thousands of them.
Analysts, meanwhile, are wondering about Nguyen's vision. Now that he has apparently helped introduce three of the world's biggest brands to Vietnam, what's next?