The determinants of consumers shopping behavior in retail in ho chi minh

UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM

INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS

VIETNAM -NETHERLANDS
PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

The determinants of consumers' shopping
behavior in retail market in Ho Chi Minh City

BY
(

LE THAI BAO TRAN

t

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

. .'

HO CHI MINH CITY, Dec 2011

_________.

\,,..._.._
~

UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM

INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS

1

VIETNAM -NETHERLANDS
PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

The determinants of consumers' shopping
behavior in retail market in Ho Chi Minh City
A thesis submitted in partial fulfilment ofthe requirements for the degree of
MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By

LE THAI BAO TRAN

Academic Supervisor

Dr. NGUYEN MINH DUC

HO CHI MINH CITY, Dec 2011

ACKNOWLEDGEMENT
First of all, I would like to express my honest and special thanks to
supervisor, Dr. Nguyen Minh Due, for his enthusiastic assistances and guidelines
1

during my writing of the thesis.

I would like to express special thanks to Dr. Peter Calkin for his useful
comments on my thesis research proposal. Besides, I am grateful to Dr. Nguyen
Trong Hoai, Dr. Pham Khanh Nam and Dr. Cao Hao Thi for their very helpful
guidelines and comment on my thesis as well.

I would like to send sincere thanks to my colleagues, my friends who have
supported me a lot to do the survey in this thesis.

Finally, I would like to express my sincere thanks to my family for their
spiritual encouragement during the time of studying of Master of Development
Economics.

Dec, 2011
Le Thai Bao Tran.

11


CONTENTS
ACKNOWLEDGEMENT .............................................................................................. ii
CONTENTS ................................................................................................................... iii
LIST OF TABLES ........................................................................................................ vii

LIST OF FIGURES ..................................................................................................... xiii
ABSTRACT ................................................................................................................. xiv
CHAPTER I: INTRODUCTION ................................................................................... !
1.1
Problem statement ........................................................................................... I
1.2
Research objectives ......................................................................................... 4
1.3
Research questions .......................................................................................... 4
1.4
The organization of thesis ............................................................................... 4
CHAPTER II: LITERATURE REVIEW ...................................................................... 5
2.1
Definitions ........................................................................................................ 5
2.1.1
Supermarket .............................................................................................. 5
Traditional market .................................................................................... 5
2.1.2
2.1.3
Consumer behavior ................................................................................... 6
Theoretical literature ....................................................................................... 7
2.2
2.2.1
Theory of Reasoned Action- TRA ............................................................. 7
2.2.2
Theory of Planned Behavior- TPB ............................................................ 8
2.2.3
Behavioral economics theory and neo classical economics theory ........... 9
2.2.4
The process of customer's decision- making ........................................... 10

2.2.5
Literature about store- choice ................................................................. 10
2.3
Conceptual framework .................................................................................. 13
2.3.1
Shopping frequency ................................................................................. 13
2.3.1.1 Price ...................................................................................................... 14
2.3.1.2 Location ................................................................................................ 15
2.3.1.3 Shopping environment ......................................................................... 15
2.3.1.4 Service .................................................................................................. 16
2.3.1.5 Advertising and promotion ................................................................. 16
2.3.1.6 Product assortment .............................................................................. 16
2.3.1.7 Customer demographic characteristics ............................................... 17
2.3.2 Customer satisfaction ofthe favorite store .................................................. 17
2.3.3 Conceptual framework ................................................................................. 19
CHAPTER III: AN OVERVIEW OF SUPERMARKETS/ TRADITIONAL
MARKETS ACTIVITIES IN HO CHI MINH CITY ................................................. 23
3.1
Overview of retail market in Vietnam .......................................................... 23
3.1.1
Population of Vietnam by gender and region ......................................... 23
3.1.2
Total retail revenue of goods and services .............................................. 23
3.2
Overview retail market ofHo Chi Minh City (HCMC) ............................... 23
3.2.1
Population ................................................................................................ 23
3.2.3
Development of supermarkets and traditional markets in HCM .......... 27
CHAPTER IV: RESEARCH METHODOLOGY AND DATA ANALYSIS ............. 29

4.1 Samples and data collection technique ............................................................... 29
'

-~

Ill


4.1.1 Sampling ....................................................................................................... 29
4.1.2 Data collection .............................................................................................. 30
4.2 Research methodology and data analysis ........................................................... 31
4.2.1 Variable measurement ................................................................................. 31
4.2.1.1 Demographic characteristics ............................................................... 31
4.2.1.1.1 Location ........................................................................................... 32
4.2.1.1.2 Gender ............................................................................................. 32
4.2.1.1.3 Age ................................................................................................... 32
4.2.1.1.4 Married status (Mar) ...................................................................... 32
4.2.1.1.5 Household size (Hsize) .................................................................... 32
4.2.1.1.6 Education (Edu) .............................................................................. 32
4.2.1.1. 7 Career .............................................................................................. 32
4.2.1.1.8 Kind of firm where shopper is working for (KindF) ..................... 32
4.2.1.1.9 Average monthly income ofshopper (Mincomei) .......................... 33
4.2.1.1.10 Average monthly income offamily of shopper (MincomeH) ....... 33
4.2.1.2 Shopping information .......................................................................... 33
4.2.1.3 Attributes ofsupermarket/ traditional market.. ................................. 33
4.2.1.4 Satisfaction of shopper with most frequently shopping place ............ 33
4.2.2 Supermarket: ................................................................................................ 34
4.2.2.1 Descriptive statistics of variables: ....................................................... 34
4.2.2.2 Exploratory Factor Analysis (EFA) and reliability test (Cronbach's
Alpha) .............................................................................................................. 36

4.2.2.3 Model specification: ............................................................................. 41
4.2.2.3.1 Model ofshopping frequency: ....................................................... .41
4.2.2.3.2 Model of satisfaction ....................................................................... 44
4.2.2.4 Effects of demographic variables on shopping behavior at
supermarket: ................................................................................................... 46
4.2.2.5 Bivariate correlation between FreqS and SSatisfy analysis: .............. 4 7
4.2.2.6 Effect of shopper's satisfaction with distance from home/ working
place (SsatisfyDis) to supermarket on their shopping frequency (FreqS) and
satisfaction (Ssatisfy) with favorite supermarket: .......................................... 48
4.2.2. 7 Effect of preference of supermarket shopping (Likeshopsuper) on
shopping frequency (FreqS) or satisfaction (Ssatisfy) of shoppers with
supermarket: ................................................................................................... 50
4.2.2.8. The relationship between spending for each shopping time
(Spendsuper) and shopping frequency (FreqS) at supermarket: .................. 51
4.2.3 Traditional market: ...................................................................................... 51

iv


4.2.3.1 Descriptive statistic of variables: ......................................................... 51
4.2.3.2 Exploratory factor analysis (EFA) and reliability test (Cronbach's

Alpha) .............................................................................................................. 52
4.2.3.3 Model specification: ............................................................................. 56
4.2.3.3.1 Model of shopping frequency ......................................................... 56
4.2.3.3.2 Model of satisfaction ....................................................................... 58
4.2.3.4 Effects of demographic variables on shopping behavior at traditional

market: ............................................................................................................ 60
4.2.3.5 Bivariate correlation between shopping frequency (FreqT) and

satisfaction (Tsatisfy) ....................................................................................... 62
4.2.3.6 Effect of shoppers' satisfaction with distance (TsatisfyDis) from

home/ working place to traditional market on their shopping frequency
(FreqT) and shopping satisfaction (Tsatisfy) with favorite traditional
market: ............................................................................................................ 62
4.2.3. 7 Effect of preference of traditional market shopping (Likeshoptradi)

on shopping frequency (FreqT) or satisfaction (Tsatisfy) of shoppers with
favorite traditional markets ............................................................................ 64
4.2.3.8 The relationship between spending for each shopping time

(Spendtradi) and shopping frequency (FreqT) at traditional market: ......... 65
4.2.4 Comparison about the difference of shopping behavior (shopping
frequency and satisfaction) between two sample size (supermarket and
traditional market) ................................................................................................ 65
4.2.4.1 Shopping frequency at supermarket and traditional market ............ 65
4.2.4.2 Satisfaction about supermarket and traditional market .................... 67
4.2.4.3 The difference of the preference of shopping between two group

shoppers ........................................................................................................... 68
4.2.4.4 Satisfaction about distance from shopper's house to supermarket/

traditional market ........................................................................................... 69
CHAPTER V: FINDING AND CONCLUSION ......................................................... 70
5.1 Shoppers' behavior at supermarket ................................................................... 70
5.2 Shoppers' behavior at traditional markets ........................................................ 72
5.3 Comparison between supermarket and traditional market .............................. 74
5.4 Conclusion and recommendation ....................................................................... 75

5.5 Limitation of this research and expectation for further research ..................... 76
REFERENCES ............................................................................................................. 77

v


APPENDICES ............................................................................................................... 82
APPENDIX 1: QUESTIONAIRES .............................................................................. 82
QUESTIONAIRE (in English) ..................................................................................... 82
QUESTIONAIRE (in Vietnamese) ............................................................................... 91
APPENDIX 2: Overview of HCMC ............................................................................. 99
APPENDIX 3: VARIABLE MEARSUREMENT ..................................................... 102
APPENDIX 4: EFA ANALYSIS (SUPERMARKET) ............................................... 117
APPENDIX 5: RELIABILITY TEST (ATTRIBUTE OF SUPERMARKET) ........ 121
APPENDIX 6: REGRESSION OF SATISFACTION ABOUT SUPERMARKET
MODEL (1st time) ....................................................................................................... 123
APPENDIX7: ONE-WAY ANOVA ANALYSIS (SUPERMARKET) ..................... 123
APPENDIX 8: EFA ANALYSIS (TRADITIONAL MARKET) ............................... 143
APPENDIX 9: 1sT REGRESSION OF SHOPPING FREQUENCY AT
TRADITIONAL MARKET ....................................................................................... 144
APPENDIX 10: ONE-WAY ANOVA ANALYSIS (TRADITIONAL MARKET) .. 145
APPENDIX 11: COMPARISON ABOUT SHOPPING BEHAVIOR BETWEEN
TWO SAMPLE SIZE (SUPERMARKET) AND TRADITIONAL MARKET ........ 166

.J

vi


LIST OF TABLES

TABLE IN CONTENT

Table 1.1: Ranking of attractiveness of retail market in the world ....................... 1
Table 3.1: Population ofHo Chi Minh City by district ...................................... 24
Table 3.2: Population ofHCMC by age ............................................................ 25

·····························································································································
Table 3.3: Total retail revenues of goods and services by region ...................... 26
Table 4.1: Descriptive statistic of supermarkets' attributes ............................... .35
Table 4.2.: The result of3rd time conducting EFA ............................................. 37
Table 4.3: Summary of Reliability test result ................................................... .41
Table 4.4: Descriptive statistics of group factors affect to frequency of shopping
at supermarket. .................................................................................. 42
Table 4.5: The result of regression (shopping frequency at supermarket) ......... .43
Table 4.6: The result of2"d regression (satisfaction at supermarket) ................. .45
Table 4.7: Correlation between shopping frequency and satisfaction ................ .48
Table 4.8a: Ranks ............................................................................................. 49
Table 4.8b: Test statistics ................................................................................. .49
Table 4.9: Descriptive statistic of variables of traditional market's attributes .... 52
Table 4.10: The result of2"d conducting EPA (traditional market) .................... 53
Table 4.11: Summary of reliability test result (traditional market) ..................... 55
Table 4.12: Descriptive statistics of group variables of traditional market ......... 56
Table 4.13: The result of 2"d regression (shopping frequency at traditional
market) .............................................................................................................. 57
Table 4.14: The result of regression (satisfaction at traditional market) ............. 59
Table 4.15: Correlation between FreqT and Tsatisfy ......................................... 62
Table 4.16a: Ranks ............................................................................................ 63
Table 4.16b: Test Statistics ............................................................................... 63
Table 4.17: Frequency index ofFreqS and FreqT .............................................. 65

vii


Table 4.18a: Ranks ............................................................................................ 66
Table 4.18b: Test statistics ................................................................................ 66

•

Table 4.19: Satisfaction index about supermarket and traditional market .......... 67
Table 4.20a: Ranks ............................................................................................ 67
Table 4.20b: Test statistics ................................................................................ 67
Table 4.21: Like index of supermarket and traditional market.. ......................... 68
Table 4.22a: Ranks ............................................................................................ 68
Table 4.22b: Test statistics ................................................................................ 68
Table 4.23: Satisfaction index about distance .................................................... 69
Table 4.24a: Ranks ............................................................................................ 69
Table 4.24b: Test statistics ................................................................................ 69
Table 5.1: Cross table ofFreqS and Age ........................................................... 72
TABLE IN APPENDICIES
APPENDIX 2: Overview ofHCMC
Table 3.4: Population of Vietnam by gender and region .................................... 99
Table 3.5: Retail revenues of goods and services by economic sector ............. 100
Table 3.6: Number of traditional market, supermarket and trade centre until
year 2015 ....................................................................................................... 101
APPENDIX 3: VARIABLE MEARSUREMENT
Table 4.25: Variable measurement .................................................................. 102
Table 4.26: Location where shopper is living .................................................. 112
Table 4.27: Gender of shopper ........................................................................ 113
Table 4.28: Percentage of age of shopper ........................................................ 113
Table 4.29: Married status of shoppers ............................................................ 113

Table 4.30: Household size of shopper ............................................................ 113
Table 4.31: Education level of shoppers .......................................................... 114
Table 4.32: Career of shoppers ....................................................................... 114
Table 4.33: Kind of firm where shopper is working for ................................... 114
Table 4.34: Monthly income of shopper .......................................................... 115

viii


Table 4.35: Monthly income ofhousehold ...................................................... 115
Table 4.36: Shopping at traditional market is a long- standing traditional habit of
Vietnamese ..................................................................................................... 116
Table 4.37: Going to supermarket is not only for shopping but also for
entertainment .................................................................................................. 116
Table 4.38: Going shopping at traditional market or supermarket is not important.
The important thing is that I can buy whatever I want efficiently .................... 116

APPENDIX 4: EFA ANALYSIS (SUPERMARKET)
Table 4.39: The first time of conducting EF A ................................................. 117
Table 4.40: Second time of conducting EF A ................................................... 118

APPENDIX 5: RELIABILITY TEST (ATTRIBUTE OF SUPERMARKET)
Table 4.41: Reliability test of group 1 .............................................................. 121
Table 4.42: Reliability test of group 2 (Policy) ................................................ 121
Table 4.43: Reliability test of group 3 (Service) .............................................. 122

APPENDIX 6: REGRESSION OF SATISFACTION ABOUT
SUPERMARKET MODEL (1st time)
Table 4.44: Regression result .......................................................................... 123

APPENDIX?: ONE-WAY ANOVAANALYSIS (SUPERMARKET)
Table 4.45: The relationship between Age and FreqS ...................................... 123
Table 4.46: The relationship between Gender and FreqS ................................. 124
Table 4.47: The relationship between Household size and FreqS .................... 124
Table 4.48: The

relationship between

monthly income of household

and FreqS ........................................................................................................ 125
Table 4.49: The relationship between married status and FreqS ...................... 126
Table 4.50: The relationship between education level and FreqS ..................... 126
Table 4.51: The relationship between Career and FreqS .................................. 127
Table 4.52: The relationship between Age and Ssatisfy ................................... 127
Table 4.53: The relationship between sex and Ssatisfy .................................... 128
Table 4.54: The relationship between Household size and Ssatisfy ................. 128

ix


Table 4.55: The relationship between monthly income of household and
Ssatisfy ........................................................................................................... 129
Table 4.56: The relationship between marries status and Ssatisfy .................... 130
Table 4.57: The relationship between education level and Ssatisfy .................. 130
Table 4.58: The relationship between career and Ssatisfy ................................ 131
Table 4.59: The relationship between Likeshopsuper and FreqS ..................... 132
Table 4.60: The relationship between Likeshopsuper and Ssatisfy .................. 132
Table 4.61: The relationship between Likeshopsuper and Age ........................ 133
Table 4.62: The relationship between Likeshopsuper and Sex ......................... 134

Table 4.63: The relationship between Likeshopsuper and household's size ..... 134
Table 4.64: The relationship between Likeshopsuper and monthly income of
household ........................................................................................................ 135
Table 4.65: The relationship between Likeshopsuper and marriage status ....... 136
Table 4.66: The relationship between Likeshopsuper and education level ....... 136
Table 4.67: The relationship between Likeshopsuper and career ..................... 137
Table 4.68: The relationship between Spendsuper and FreqS .......................... 138
Table 4.69: The relationship between Spendsuper and Age ............................. 138
Table 4. 70: The relationship between Spendsuper and Sex ............................. 139
Table 4.71: The relationship between Spendsuper and household size ............ 139
Table 4. 72: The relationship between Spendsuper and monthly income of
household .............................................................. ·............ ···.························ .140
Table 4.73: The relationship between Spendsuper and marriage status ............ 141
Table 4.74: The relationship between Spendsuper and education level.. .......... 141
Table 4.75: The relationship between Spendsuper and career. ......................... 142

APPENDIX 8: EFA ANALYSIS (TRADITIONAL MARKET)
Table 4.76: The result of 1st EFA ................................................................... 143

APPENDIX 9: 1sT REGRESSION OF SHOPPING FREQUENCY AT
TRADITIONAL MARKET
Table 4.77: Regression result .......................................................................... 144

X


APPENDIX 10: ONE-WAY ANOV A ANALYSIS (TRADITIONAL
MARKEST)
Table 4.78: The relationship between age and FreqT ....................................... l45
Table 4. 79: The relationship between sex and FreqT ....................................... 145

Table 4.80: The relationship between household's size and FreqT .................. 146
Table 4.81: The relationship between monthly

income

of household and

FreqT .............................................................................................................. 147
Table 4.82: The relationship between marriage status and FreqT .................... 147
Table 4.83: The relationship between education level and FreqT ................... 148
Table 4.84: The relationship between Career and FreqT .................................. 149
Table 4.85: The relationship between age and Tsatisfy .................................... 149
Table 4.86: The relationship between gender and Tsatisfy .............................. 150
Table 4.87: The relationship between household's size and Tsatisfy ............... 151
Table 4.88: The relationship between monthly income of household and
Tsatisfy .......................................................................................................... 151
Table 4.89: The relationship between marriage status and Tsatisfy ................. 152
Table 4.90: The relationship between education level and Tsatisfy ................. 153
Table 4.91: The relationship between career and Tsatisfy ............................... 153
Table 4.92: The relationship between Likeshoptradi and FreqT ...................... 154
Table 4.93: The relationship between Likeshoptradi and Tsatisfy ................... 155
Table 4.94: The relationship between Likeshoptradi and Age group ............... 155
Table 4.95: The relationship between Likeshoptradi and Sex .......................... 156
Table 4.96: The relationship between Likeshoptradi and household's size ...... 157
Table 4.97: The relationship between Likeshoptradi and monthly income of
household ........................................................................................................ 157
Table 4.98: The relationship between Likeshoptradi and marriage status ........ 158
Table 4.99: The relationship between Likeshoptradi and education level ........ 159
Table 4.100: The relationship between Likeshoptradi and career .................... 159
Table 4.101: The relationship between Spendtradi and FreqT ......................... 160

xi


Table 4.102: The relationship between Spendtradi and Age ............................ 161
Table 4.103: The relationship between Spendtradi and Sex ............................. 161
Table 4.104: The relationship between Spendtradi and household size ............ 162
Table 4.105: The relationship between Spendtradi and monthly income of
household ........................................................................................................ 163
Table 4.106: The relationship between Spendtradi and marriage status ........... 164
Table 4.107: The relationship between Spendtradi and education level ........... 164
Table 4.108: The relationship between Spendtradi and career ......................... 165

APPENDIX
BETWEEN

11:

COMPARISON ABOUT

TWO

SAMPLE

SIZE

SHOPPING

BEHAVIOR

(SUPERMARKET)

AND

TRADITIONAL MARKET
Table 4.109: Comparison about FreqS and FreqT ........................................... 166
Table 4.110: Comparison about Ssatisfy and Tsatisfy ..................................... 167
Table 4.111: Comparison about Likeshopsuper and Likeshoptradi .................. 168

Xll


LIST OF FIGURES

Figure 1.1: 2009 GRDI country attractiveness ..................................................... 2

•

Figure 2.1: Theory of Reasoned Action (Fishbein & Ajzen 1975) ...................... 8
Figure 2.2: Theory of Planned Behavior (Ajzen 1991) ....................................... 9
Figure 2.3: Conceptual framework .................................................................... 21
Figure 3.1 : Total retail revenues of goods and services by region ................... 27
Figure 3.2: Number of traditional market, supermarket and trade centre in HCMC
from 2008- 2015 ............................... :............................................................... 28
Figure 4.1: The preference of shopping at supermarket and traditional market .. 30
Figure 5.1: The reason shopper goes shopping at supermarket .......................... 71
Figure 5.2: The reason shopper goes shopping at traditional market. ................. 73

.·
xiii

ABSTRACT

•

Ho Chi Minh City is a big business centre of Vietnam where retail
business is developing rather dynamically. This paper studies the effect of
attributes of retail format (supermarket and traditional market) on shopping
behavior (shopping frequency and satisfaction) of shoppers in Ho Chi Minh City.
Regarding to supermarket, the result indicates that marketing policy of
supermarket would give a positive effect on both shopping frequency and
satisfaction with favorite supermarket. Price and products also positively affect
on customer satisfaction. Unexpected, shopping environment and customer
services gave negative influence on shopping frequency in supermarket. Besides,
the findings show that there are differences in shopping frequency, satisfaction,
preference of supermarket shopping and spending for each shopping time at
supermarket among different demographic shoppers groups. This research shows
that there is correlation between shopping frequency and satisfaction; there is a
significant effect of shopper's preference on both shopping frequency and
satisfaction; and there is no relation between spending for each shopping time
and shopping frequency at favorite supermarket.
Regarding to traditional market, the result expresses that the main factor
which has positive effect on shopping frequency at traditional markets is their
convenience (making bargain, saving time and hire- purchase). Besides of
satisfaction with convenience of traditional market, shoppers are satisfied with
product sold at market. Besides, the findings show that there are differences in
shopping frequency, satisfaction, preference of traditional market shopping and
spending for each shopping time at traditional market among different
demographic shoppers groups. The research shows that there is no correlation

between shopping frequency and satisfaction about traditional market; there is an
effect of traditional market preference on shopping frequency and satisfaction at

xiv


traditional market; there is correlation between spending for each shopping time
and shopping frequency at traditional market.
In comparison, shopping frequency at traditional market is higher than that

of supermarket, but shoppers are satisfied with supermarket more than traditional
market. If shoppers prefer to go shopping at supermarket or traditional market,
they will go shopping there more frequently. Satisfaction index with distance of
traditional market is higher than that of supermarket. It means that there are many
traditional markets are located near to shoppers' house and more convenience for
them to go shopping.

XV


CHAPTER I: INTRODUCTION

1.1 Problem statement

Vietnam is a developing country that is attracting many foreign investors.
There are many foreign investors have invested in Vietnam in which Ho Chi
Minh City is the place attracting many investors in many different areas. One of
potential area for foreign investors is retail market. Because according to A. T.
Kearney (2010), which is web site ranking retail market in the world, Vietnam
is the best retail market in 2008 in the world. The next year, 2009, the Global

Retail Development Index (GRDI) of Vietnam plunged from 1st to 6th due to
global financial crisis. Meanwhile, the GRDI of other essential markets keeps
stable in the difficult time, even climbed up impressively to 1st and 2"d like India
and Russia, respectively.

Table 1.1: Ranking of attractiveness of retail market in the world.
Country

Rank

m

Rank

m

Rank

m

2009 vs.

2007

2008

2009

2008

Vietnam

4

1

6

-5

India

1

2

1

+1

Russia

2

3

2

+1

China

3

4

4

0

(Sources: A.T. Kearney Global Retail Development Index, 2010)
However, the below survey of A.T. Keaney about 2009 GRDI country
attractiveness shows that Vietnam is an interesting market in terms of quite high
potential although country risk is rather high. Other rising markets like China,
measured "on the radar screen" like Vietnam, country risk index of China is
lower than Vietnam's, but its potential is lower than potential of Vietnam as
well. That is the reason why it is said that retail market in Vietnam is considered
a very potential market for foreign investors.


2009 GRDI country attractiveness

100

•

e

Slovenia

:;:"'

0

llll

<.>

0~
Q. -~

~
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=e
iS-

i

<;)-

x.Sl'>
.. -<::

Lawerpriority

21m

0

60

( .• ,,,
'--)

g'~

·:;:

Sue of botib!e
in(fca!r!s net
retail sales,

Hungary

ai.:.t

--c:

To wosde!

On tile radar scree.?

Thailand

40

•

Vietnam

II

~Q

11!

=
c.:o

Algeria

0

~

25

45

55

65

75

Market potential*
(0 =low potential; f(}(J =high poten(ial)

(Source: AT. Keaney)
Figure 1.1: 2009 GRDI country attractiveness.

The report 2009 Global Retail Development Index of A.T. Keaney also
said that Vietnam has some short term challenges, long- term outlook for the
country remains positive. The past years showed a large number of international
retailers invested in Vietnam. Nowadays, Vietnam has about 400 supermarkets
and 2000 convenient stores which are operated by both domestic and foreign
companies. Many foreign retailers are well established in Vietnam such as
Lottemart of Korea, Parkson of Malaysia, Big C of France, Dairy Farm of Hong
Kong, and Metro Cash and Carry of German. Besides, there are still some big
international retailers such as Wal-Mart (America) or Auchan (France) plan to
enter Vietnam retail market in the future. Vietnam is still an attractive market.
Population of Vietnam is young and age segment between 15 and 39 grew more
than in any other market. Shopping demand of this age segment is always at
high level.

2

85


Moreover, Vietnam has joined WTO since 2001. According to joining
route, from 1st Jan, 2009, Vietnam totally opened this market officially. With
this openness, retail market in Vietnam will be very eventful. There will be
more foreign retailers come to Vietnam, especially to Ho Chi Minh City with
high expectation of doing business in this potential market. Furthermore, the
total retail revenue of Vietnam increases year by year. According to General
Statistics Office, 2010, the revenue reached 1,007,213.5 billion VND (USD
48.42 billion) in 2008 and increased by 21% in 2009. (1 ,214,532.1 VND billion

equivalent to 58.39 USD billion) in which, the retail revenue of Ho Chi Minh

City occupied 24% (General Statistics Office, 2010).
According to the Saigon Times dated on May th, 2009, in 2008, there
are 82 supermarkets and 15 shopping centers in Ho Chi Minh City and there is a
strategy to develop to 177 supermarkets and 163 shopping centers in Ho Chi
Minh City until 2015. In addition, traditional market or street market has been
being popular retail formats in Vietnam, from rural area to urban area. Up to
now, there are around 238 traditional markets in Ho Chi Minh City (Source:
The Trade of HCMC, 2010). From the figures above, it is obviously seen that

the number of potential supermarket/ shopping center is going to be 1.5 over
current traditional markets. Each of them has definite advantages: supermarket
is modem shopping way which is integrated services, suitable for modem life
whereas traditional market is traditional distribution channel, shopping at
traditional market is the habit of most Vietnamese in daily life.
Ho Chi Minh City is the city which population density is always high in
Vietnam. The development of retail market in Ho Chi Minh City has affected
shopping habit/shopping behavior of consumers. Consumers have more choice
to decide where the most convenient place for them to go shopping. However,
there is limited in research on the determinants of shopping behaviors of
customers in the city with a comparison between traditional market and
supermarket.

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1.2 Research objectives

This thesis aims to study and clarify some following points:
The determinants of shopping behavior of consumer in retail market in Ho
Chi Minh City.

The difference m shopping behavior of consumers m retail market by
demographic groups of shoppers.
The relationship between shopping frequency and satisfaction of customer in
each retail market format (supermarket and traditional market).
Facing to hot development of retail market, should Ho Chi Minh City focus
to enlarge number of supermarkets and dismiss traditional market; or restrict
number of supermarkets and improve traditional market; or make
development of supermarket and traditional market balanced? From
perceived results of research, this thesis is expected to give appropriate
strategies or recommendations to develop retail market in Ho Chi Minh City.
1.3 Research questions

This study tries to answer the questions as following
Is there a difference on consumers shopping behavior between traditional
market and supermarket recently?
Which retail format, traditional or modem (supermarket) is appropriate in
the development of retail market in Ho Chi Minh City?
1.4 The organization of thesis

Chapter I: Introduction
Chapter II: Literature review
Chapter III: An overview of supermarkets/ traditional market activities and
shopping behavior of individual in Ho Chi Minh City.
Chapter IV: Research methodology and data analysis
Chapter V: Finding, conclusion and recommendation.

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CHAPTER II: LITERATURE REVIEW

2.1 Definitions
2.1.1 Supermarket

According to website businessdictionary.com, supermarket is defined as
"a large store that sells a variety of food and household items to customers".
Nowadays, customer can find out whatever they need for their daily life. In
Vietnam, there are two kinds of supermarket. One provides various kinds of
products; one specializes in particular category such as indoor products, mobile
phones, computers, electrical and electronic products, etc. In this paper,
supermarket is studied as the place where provides various kinds of products
such as food, non food, household items, clothing, grocery and stationary,
etc ....
2.1.2 Traditional market

According to Decision 1117/QD- UB- TM dated on 22nd Jul, 1993 of
People's committee of HCMC, traditional market is the fixed place with border
line on inhabitant's area. Traditional market with or without lean- to is set up by
decision of People's committee. Traditional market is a place which
concentrates all business of all economic sectors with one or many categories
and different legal mode of business. Traditional market is a place where
merchandises are exchanged between the seller and the buyer for production
and consuming demand. In Vietnam, there are two kinds of traditional market.
They are administrative market and non-administrative market. Administrative
market is market which is controlled by board management of State. Nonadministrative market is market which is set- up spontaneous without
management of State like street markets. In this paper, both of two kinds of
market are considered as traditional market.

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---------- . -

- -

-

2.1.3 Consumer behavior

According to Jagdish, et.aL ( 1999), there are four groups of determinants
which affect customer behavior. They are market characteristic, market context,
personal characteristic and personal context.
Market characteristic comprises climate, topography and ecology that
affect human lifestyle, taste of individual as well as feature of products
and play an important role in developing human culture.
Market context includes domestic economy; government policy and
technology also affect consumer behavior significantly.
Personal characteristic includes factors such as genetics, race, gender,
age and personality.
Personal context contains culture, social classes, groups that have direct
or indirect effect on attitude or behavior of individuaL It is considered as
the fundamental element of an individual's demand and behavior.
In addition, there is different idea about customer behavior from Philip

Koltler, et.al. (2003). He assumes that there are four determinants affect
consumer behavior, consisting cultural elements, social elements, personal
elements and psychological elements.
Cultural elements include culture and social classes are as same as one
part of determinants in individual context as mentioned above.
Social elements contain family, reference groups, and social roles

/statuses. Reference groups are all the groups that have a direct or
indirect effect on the attitudes or behavior of an individual and members
of family supposed constitute the most influential primary reference
group.
Personal elements are referred to age, stage in the life-cycle, economic
circumstances, lifestyle, occupation, personality and self- concept of the
individuaL

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Psychological groups include factors such as motivation, perception,
learning, belief and attitude.
In comparison with theory of Jagdish, et.al. (1999), theory of Philip

Kotler, et.al. (2003) did not mention to market characteristic and market
context.
2.2 Theoretical literature

2.2.1 Theory of Reasoned Action- TRA
TRA was formulated in 1967 to supply consistency in studies of the
connection of behavior and attitudes (Fishbein & Ajzen 1975; Werner 2004). In
TRA, it is assumed that individual is rational in thinking their action and
implying their action (decision-making). Rational decision-making supposes
that the decision is created under precariousness (Basu 1996; Eppen et al.1998).
Rational decision-making expresses that either best results were expected or the
decision- making unit was aware of all the influences and consequences (Basu
1996; Bazerman 2002; Eppen et al.1998).
There are two main concepts m TRA; they are "principles of
compatibility" and "behavioral intention" (Ajzen 1988; Fishbein & Ajzen

1975). Principles of compatibility determine that to foretell a particular behavior
aimed at a particular objective in a given context and time, particular attitudes
that match to the particular purpose, time and context should be assessed (Ajzen
1988; Fishbein & Ajzen 1975). The concept of behavior intention denotes that
an individual's motivation to engage in a behavior is specified by the attitudes
that affect the behavior (Fishbein & Ajzen, 1975). Behavior intention shows
that an individual tries their utmost in order to undertake to implement such
behavior. Higher commitment is higher possibility of behavior performance.
Behavioral intention is specified by attitudes and subjective norms (Ajzen 1988;
Fishbein & Ajzen 1975).

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Beliefs and
Evaluation

Normative
beliefs and
motivation to
copy

r-----+

Attitude
toward
behaviour

~

v

Subjective
Norm

Behavioural
Intention

Actual
~ Behaviour

Figure 2.1: Theory ofReasoned Action (Fishbein & Ajzen 1975)

2.2.2 Theory of Planned Behavior- TPB
TPB (Ajzen, 1991) was extended from TRA (Werner, 2004). TPB is a
social psychological theory which is used to predict and explain specific
behavior (Ajzen, 1991). According to TPB, intention of individual is explained
by three reasons; they are the behavior performance is positive or negative
(attitude); social pressure about mandatory or non- mandatory in behavior
(subjective norm) and controlling competence of individual to perform behavior
(perceived behavioral control).
The difference between TPB and TRA is controlling competence of
individual to perform behavior.

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Attitude
toward
behavior

Subjective
norm

Intention

r---+

Behavior

.,.
Perceived
behavioral
control
I

I

L-----------------------------------------~

Figure 2.2: Theory ofPlanned Behavior (Ajzen 1991)

2.2.3

Behavioral economics theory and neo classical economics theory

Neo classical theory assumed that consumers are rational and their
decision making bases on maximizing utility. However, it is not everyone is
good at calculation to maximize their utility. In reality, people are not always
make decision with the goal is maximizing utility; they just make decision

following the other's action. In other words, their decision is affected by the
other's action. For example, people tend to buy at place/ store where there are
many customers. In this case, customer behavior is affected by the others.
Furthermore, people do something not only because of optimal utility but also
because of their habit due to habit are difficult to change. However, habit is not
mentioned in neo classical theory while habit is important factor in customer's
behavior. Neo classical theory cannot explain all of the customer's behavior
because consumer's behavior depends on customer's psychology when making
decision. That is the reason why it is necessary to apply behavioral economics

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