Hanoi's convenience store market is witnessing an intense battle for supremacy as international giants 7-Eleven and GS25 are reportedly paying exorbitant rental fees, up to $100-$200 USD per square meter, rivaling prime locations in central Tokyo. This aggressive investment in prime real estate signifies their determination to unseat Circle K, which has long held a dominant position in the Vietnamese capital. Despite the challenges of profitability in Vietnam's competitive retail landscape, these chains are betting big on the capital's growing consumer base and urban density.
The High-Stakes Convenience Store War Heats Up in Hanoi
The streets of Hanoi are becoming the latest battleground for global convenience store giants. While Ho Chi Minh City has seen fierce competition for years, the focus has now squarely shifted north, where international players like 7-Eleven (from the US, via Japan) and GS25 (from South Korea) are making audacious moves to challenge the established dominance of Circle K.
The most striking aspect of this aggressive expansion is the eye-watering rental prices these new entrants are reportedly willing to pay. According to recent reports, 7-Eleven and GS25 are shelling out anywhere from $100 to $200 USD per square meter for prime retail locations in Hanoi. This figure is exceptionally high, putting Hanoi's convenience store rental rates on par with, or even exceeding, those in central Tokyo – one of the world's most expensive real estate markets.
Why the Exorbitant Rents?
Several factors are driving this unprecedented willingness to pay premium prices for space:
Strategic Location is King: In the convenience store model, visibility, foot traffic, and accessibility are paramount. Securing highly visible corners, bustling street fronts, or spots near office buildings, schools, and residential complexes is crucial for success. These prime locations naturally command higher rents.
Challenging Circle K's Foothold: Circle K, an American brand, was one of the first international convenience store chains to enter Vietnam (in 2008) and has built a formidable presence, particularly in Hanoi. As of March 2025, Circle K had over 460 stores across Vietnam and held a significant market share (though this varies by source, some indicated 38% in 2023, while others suggested 48% in 2023). To genuinely compete and carve out their own market share, 7-Eleven and GS25 must establish a strong, widespread presence in key areas, even if it means initially sacrificing profitability for market penetration.
Catching Up in a Lucrative Market: While the convenience store market in Vietnam is highly competitive and often sees chains struggling with profitability (many foreign brands have reported losses for years), it is still considered to have substantial growth potential. Vietnam's young, urbanizing population and increasing disposable income make it an attractive long-term prospect. Both 7-Eleven and GS25 initially focused heavily on the southern market (Ho Chi Minh City) before embarking on their northern expansion in early 2025. 7-Eleven only opened its first Hanoi store in June 2025, nearly eight years after entering Vietnam. GS25 also began its Hanoi expansion in March 2025. They are playing catch-up and are willing to invest heavily to accelerate their growth.
Beyond Just Sales: Convenience stores are more than just places to buy snacks. They offer a range of services, including quick meals, coffee, Wi-Fi, and a comfortable, air-conditioned environment. Securing prime spots allows them to offer these amenities effectively and become a preferred "third place" for consumers.
The Broader Hanoi Convenience Store Landscape
Hanoi's convenience store market is predicted to have strong growth. The city has seen various players enter the market over the years, including Ministop (Japan) and FamilyMart (Japan). Local brands like Co.op Smile (Saigon Co.op) also compete, though foreign brands largely dominate the sector.
Despite the aggressive expansion and high rental costs, profitability remains a major challenge for many foreign convenience store chains in Vietnam. Most have reported continuous losses as they invest heavily in expansion and struggle to find a sustainable business model in the intense competitive environment. For instance, GS25 reported a loss of $4 million in 2023, albeit down from $6.7 million in 2022.
The willingness of 7-Eleven and GS25 to pay Tokyo-level rents in Hanoi underscores the immense strategic importance they place on the Vietnamese capital. This high-stakes gamble reflects their long-term vision for Vietnam's burgeoning retail sector, even if it means enduring initial financial challenges in their quest to disrupt Circle K's reign and carve out a dominant share of the market.