From WIRE REPORTS
While domestic retailers in Viet Nam are struggling to pay rents at shopping malls amid plunging sales, their foreign counterparts are coming in with long-term plans.
WIRE PHOTO
News website VnExpress quoted the general director of an unidentified real estate consultancy as saying that it is scouting for space for a Japanese retail giant.
“They have entered Viet Nam and been surveying the east and south of Sai Gon, preparing to make a splash in two or three years.”
Japanese retailers do not insist on downtown spots and prefer populated areas near new urban zones like District 7.
Another Japanese retailer and one of Asia’s leading ones, AEON, has also announced plans to enter Viet Nam in 2014 with the biggest shopping mall in western Sai Gon.
The mall will be located at Celadon City, an urban area in Tan Phu District.
Lotte, the fifth-biggest retailer in South Korea, already has five supermarkets in Viet Nam and is expected to open 30 more in the five largest cities – Ha Noi, Sai Gon, Hai Phong, Da Nang and Can Tho.
The retailer has two outlets in Sai Gon and one each in neighboring Dong Nai Province, Ha Noi and Da Nang. It recently took over Sai Gon’s famed Legend Hotel.
Fast-food brands like KFC, Burger King and pizza chains always have thrived in Viet Nam. So is newcomer Starbucks. Starbucks CEO Howard Schultz told the Wall Street Journal that its first and only Vietnamese outlet in Sai Gon is exceeding expectations.
The country, where more than 8 million people are still hungry― a four-fold drop from a decade ago ― according to a United Nations report, also is considered a promising market for wine.
A delegation of 11 wine producers from Australia visited in June. Yasmin Power, head of wine and beverages in the Victorian government’s Department of State Development, Business and Innovation, said during the visit that the companies are willing to step in once they can find Vietnamese partners experienced in the market with good distribution systems.
Johnathan Hanh Nguyen, chairman of Imex Pan Pacific, one of the largest conglomerates in Viet Nam, told VnExpress that there is a wave of international retailers coming into Viet Nam as the country is “becoming a retailing heaven.
“Its population is young, and many young employed people in urban areas earn well, are well-informed and love to show off their social status.”
Pointing to shopping malls not being crowded, Le Quang Hanh, general director of property company Sai Gon Land, said retailing in Viet Nam is not doing well, giving international giants an opportunity to take over.
“It is a long-term game for the big boys.”
Retailers should be prepared to take losses initially, but then they would have few local competitors left in such a promising market where three-fifths of the nearly 90 million people are under 35.
