South Korean conglomerate SK Group is expanding its presence in Vietnam with a fresh investment of US$410 million for a 16.3% stake in VinCommerce, the retail arm of Masan Group, one of the largest private-sector companies in the Southeast Asian nation.

The deal, announced on April 6, was signed by SK Southeast Asia Investment, which the chaebol formed in 2018 in Singapore to focus on investing in startups and high-growth projects in region as well as managing the group’s flagship businesses.

Credit Suisse (Singapore) Limited served as Masan’s adviser in the deal. VinCommerce runs about 2,300 convenience stores and supermarkets across Vietnam, cornering about half of the country’s retail sector.

The South Korean group says its strategic investment will help bolster VinCommerce’s online channels to further tap Vietnam’s fast-growing e-commerce sector.

VinCommerce has its roots in Vingroup, Vietnam's biggest conglomerate by value, where SK has invested up to US$1 billion since April 2019. In December 2019 Masan acquired an 83.7% stake in VinCommerce.

Vingroup has been seeking to get out of the retail business to focus on the technology and industrial sectors.

Following the acquisition, Masan has decided to merge two convenience store brands under VinCommerce – VinMart and VinMart+ – into WinMart. Masan Group chief executive officer Danny Le told an annual general meeting on April 1 that the retail network plans to launch financial services and franchising this year.

Techcombank, one of the leading commercial banks in Vietnam and where Masan holds a 15% stake, will provide financial services in about 1,800 convenience stores, Le said.

The financial services, including retail banking, will focus on rural areas, where many people are still unbanked and transacting in cash. This strategy is part of the group’s plans to turn Vietnam’s retail sector into a more cashless market in the long run.