A view of Aeon Mall Binh Tan in Ho Chi Minh City. The retail landscape in Vietnam is changing with the rise of shopping malls. (Photo: VNA)Hanoi (VNA) – The retail landscape in Vietnam ischanging, with the fall of department stores while shopping malls areflourishing.
In 2017, the country’s retail sector earned roughly 129billion USD, up 11 percent from 2016, relatively high growth compared withother Southeast Asian nations.
But Parkson Holdings, a Malaysian department storeoperator with outlets across Asia, is missing out on the trend. The firmcontinues to suffer losses and unsatisfactory business results in Vietnam. Lastyear, it earned about 500 billion VND (22 million USD) in revenue but posted accumulatedlosses of more than 60 billion VND (2.64 million USD).
Parkson had to scale down in Vietnam over the past fewyears. Earlier this year, Parkson Flemington in Le Dai Hanh Street, Ho Chi MinhCity, its fourth store, was closed after eight years of operation, followingthe closure of Parkson Keangnam in January 2015, Parkson Paragon in May 2016and Parkson Viet Tower in December 2016.
The company was at its prime from 2005 – 2010,introducing international brands to local consumers through its departmentstores. However, times change and new retail giants brought new shopping experiences,enticing shoppers with malls which cater to a larger variety of demands.
According to Savills, the design of the new malls isdifferent, allowing retailers room to provide a much wider selection of goodsand services than is currently available in the small shops provided bydepartment stores.
Covering areas of below 20,000 square metres, departmentstores focus on cosmetics and fashion items. The relatively small areas alsomake it difficult for department stores to optimise benefits and accommodateadded services.
Meanwhile, with average area of 45,000 – 60,000 sq.m,shopping malls offer a one-stop shopping experience, including areas forshopping, restaurants, spa, supermarkets, banks and even schools. These malls aredestinations for shopaholics and also satisfy all amusement demands of afamily, from children to adults, Pham Thai Binh, head of Retail Leasing,Savills Vietnam explained.
These factors are, to some extent, behind the shift fromdepartment stores to shopping malls, Binh said.
In the next three years, the retail market is expected towitness rapid growth to meet increasing demand in entertainment, modern grocerystores and fashion. Other services in malls, like fitness centres and cinemas,will also be expanded.
In addition, the sector will become even more competitiveas foreign retailers are seeking to accelerate investment in Vietnam, includingThailand’s TCC Group and Central Group, Singapore’s Mapple Tree & KeppleLand, the Republic of Korea’s Lotte and Emart and Japan-based Aeon andTakashimaya-VNA
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