More exciting thanks to many new brands entering the market
In the last 6 months of 2023, the high-end retail market in Ho Chi Minh City welcomed many famous brands in the high-end segment in many industries such as fashion, jewelry, cosmetics, watches. Famous names include Loewe, Van Cleef & Arpels, Breitling,... These brands have all chosen prime locations in the central area.
According to Savills HCMC Retail Leasing Department, in the final period of the year, the market will witness more excitement in the high-end retail segment with new store opening activities.
Analyzing the attraction of Ho Chi Minh City for these brands, Ms. Tran Pham Phuong Quyen, Retail Leasing Manager of Savills Ho Chi Minh City, said that the growth of the high-income class and the generous spending mentality for famous luxury and high-end products are among the key factors.
"Along with that, it is impossible not to mention the development of retail distribution corporations in Vietnam in recent times with strong strength and large market share, which has convinced many demanding brands to enter the Vietnamese market," Ms. Tran Pham Phuong Quyen added.
The retail space market will be more vibrant thanks to the appearance of many big brands.
Another factor comes from the supply of high-quality premises in the city in 2023. After many prime premises completed their renovation and upgrading plans, brands have more options in choosing locations to place stores that suit their business strategies. Retail investors also bring quality, reputable facilities that are trusted and associated with high-end brands.
Savills' Global Luxury Retail Outlook 2023 report also shows that, excluding the Chinese market, Asia accounts for 12% of the total number of luxury retail stores globally in 2022, with Southeast Asia considered a region with strong growth potential in the coming time.
Expert Nick Bradstreet, Head of Asia-Pacific Retail at Savills, sees Vietnam, Singapore and Thailand as the most prominent countries in the region for luxury retail.
"These markets all have strong economies, rapid growth in the number of high-income people along with the expansion of a series of high-end hotels as well as clubs dedicated to the elite. This has attracted the attention of luxury retail brands," said Mr. Nick Bradstreet.
Pressure from e-commerce
Besides the above positive developments, Savills experts also pointed out some difficulties of the market during the period of economic slowdown.
"In Ho Chi Minh City, brands in the mid-range segment are facing many challenges as sales have decreased by 20-30%. The main reason is that consumers in this segment are often more sensitive to product prices. When the general economy is difficult, they tend to tighten their spending and carefully consider the price factor when shopping," said Ms. Tran Pham Phuong Quyen, Retail Leasing Manager at Savills Ho Chi Minh City.
Therefore, brands and retailers are simultaneously launching many promotional programs to stimulate demand at the end of the year as well as speed up the consumption of inventory products before 2024.
Ms. Tran Pham Phuong Quyen, Retail Leasing Manager Savills HCMC
According to the leader of the Department of Industry and Trade of Ho Chi Minh City, retail is one of the driving forces of economic growth in the first 9 months of 2023. In the first 3 quarters of the year, the total retail sales of goods and consumer service revenue of Ho Chi Minh City is estimated at VND 871,198 billion, an increase of 8.6% over the same period last year.
This year, the city also has many promotional activities organized regularly and continuously, helping to strengthen the connection between retail businesses and consumers, boost consumption of goods, stimulate consumption, and contribute to economic growth in 2023.
On the broader picture, Mr. Simon Smith, Head of Research and Consulting, Savills Asia Pacific, said that retailers in the region are facing a number of macroeconomic challenges in the short to medium term.
At the same time, concerns about the growth of e-commerce for retail landlords remain. Online shopping habits are becoming more popular after the pandemic. This means that stores and shopping centers need to provide more experiences to attract and retain consumers.
For retail developers, Savills experts say inflation is driving up construction and labor costs, so property owners are banking on continued brand confidence in physical stores, which in turn will drive up rents.
Source
Comment (0)