Foreign retail giants compete for big projects in Vietnam
Apr 17, 2015
Major foreign retail groups are competing for a slice of the commercial retail pie in Vietnam, despite the closure of some malls in Hanoi.
The South Korean leading retailer Lotte, for example, bought Diamond Plaza mall in District 1 in HCM City from Korean firm Posco E&C.
Sources say Lotte is moving ahead with its project on developing a smart complex in Thu Thiem new urban area in District 2, estimated to be capitalized at billions of dollars.
The South Korean retail giant has been implementing its strategy announced by President Shin Dong Bin in 2005, which focuses on four non-Korean markets – Vietnam, Russia, Indonesia and China.
Of the four, Vietnam is considered a promising destination with 90 million people, 70 percent of whom are below 40 years old.
Takashimaya, the retail group from Japan with 180 years of experience, could also be a threat to the existing retailers in the market.
The giant, which has decided that China and ASEAN will be its key markets in the future, plans to set up the first store in Vietnam early the next year.
The Japanese group, with three big centers in Singapore, Shanghai and Taipei, began eyeing Vietnam in 2012. At that time, Takashimaya signed a long-term contract to lease 15,000 square meters of retail premises at Saigon Center in District 1 in the central area of HCM City.
And another new shopping mall is expected to open in the second quarter of 2015 – SC VivoCity. The 72,000 square meter shopping mall, with five floors and one basement, developed by Singaporean Mapletree and Saigon Co-op, is expected to sell major international brands.
In Singapore, VivoCity is considered one of the top 10 favorite shopping destinations in the world and one of the top three shopping centers in Asia.
Analysts are surprised that big foreign retail groups are marching towards Vietnam as they believe the current market is not sufficiently promising to investors.
A number of shopping malls have shut down or shifted to other types of business over the last two years because of bad business performance.
However, well-informed circles have said that closure of the shopping malls occurred because of bad management, not because of low market demand.
“The other large shopping malls managed by experienced investors such as Aeon and Robinson still have retail premises fully occupied and a high number of customers,” an analyst said.