Shopping malls struggle to survive

The retail market in Ho Chi Minh City is witnessing a strong transformation as e-commerce grows. Shopping malls are forced to change in the context of declining demand for direct shopping.

Many shopping malls in Ho Chi Minh City are empty of tenants. Photo: Le Toan

Quiet

Located at 2 Hai Trieu (Ben Nghe Ward, District 1, Ho Chi Minh City), Bitexco Financial Tower used to be the pride of Ho Chi Minh City, a must-see destination for tourists. However, the scene here has now become quiet. Fashion stores, restaurants, and cinemas that were once bustling have closed one by one.

Not far away, at the corner of Dong Khoi - Le Thanh Ton (District 1), Parkson Saigontourist Plaza Shopping Center is also in a similar situation. After reopening in mid-2020 with the expectation of bringing a diverse shopping experience, this center is now only sparsely visited by customers.

Vietnam's retail market still has a lot of potential thanks to its young population and growing middle class. To take advantage of this opportunity, it is necessary to invest in infrastructure, expand quality premises, improve shopping experiences...

Despite its prime location on the busiest street in Ho Chi Minh City, according to reporters, only a few brands such as Uniqlo and Muji attract customers. Meanwhile, the ground floor of this shopping mall is almost deserted. Some fashion and food stalls try to stimulate demand with deep discounts of 40-50%, but the situation still cannot be improved.

In the same situation, Diamond Plaza Shopping Center (corner of Le Duan - Pham Ngoc Thach) also lost a significant number of customers compared to the period before the Covid-19 pandemic. If before, this shopping area was always bustling with a constant flow of people coming and going, now there are only a few customers coming and going.

The situation at NowZone (Nguyen Van Cu Street, District 1) is no better. Except for some street-front cafes that still have customers, inside the center, shoe and clothing stalls... are sparsely populated. Small traders said that revenue has dropped sharply, while operating costs are increasing, making them worried about the future of their business.

Change to adapt

One of the main reasons why shopping malls are in a slump is due to changes in consumer habits after the Covid-19 pandemic. Many customers have become accustomed to shopping online, causing a decrease in the need to visit shopping malls directly.

Dr. Tran Quang Thang, Director of the Ho Chi Minh City Institute of Economics and Management, said that competition from e-commerce platforms and social networking sites is one of the reasons why shopping malls are heavily affected. If they do not proactively change and adapt to new consumer trends, shopping malls will easily be eliminated.

From another perspective, Ms. Hoang Nguyet Minh, Senior Director, Commercial Leasing Department at Savills Hanoi, said that the Vietnamese retail market is still too young for e-commerce to create pressure on demand for premises.

According to Ms. Nguyet Minh, currently, e-commerce platforms record better sales from Vietnamese brands or domestic retail businesses. Meanwhile, foreign retail brands, when entering the market, need to prioritize expanding their presence in Vietnam and building a flagship store system to increase their recognition before boosting sales on e-commerce platforms. Therefore, the fact that companies, especially foreign brands, give up their presence to focus entirely on e-commerce has not happened yet.

Therefore, in the next 5 years, e-commerce is still not enough to reduce the demand for retail space in Vietnam, the demand for retail space is still very large. However, the supply of retail space, especially high-quality shopping centers, is still limited, not fully meeting the functional requirements of the space from brands.

“Vietnam is a potential retail market in Southeast Asia thanks to its young population and growing middle class. To take advantage of this opportunity, it is necessary to invest in infrastructure, expand quality premises, improve shopping experiences and flexibly combine online and offline. Only then can we attract investors, improve competitiveness in the region and adapt to new retail trends, especially e-commerce,” Ms. Minh recommended.

In reality, shopping malls are also changing to “retain” customers by providing convenient and effective shopping experiences. For example, AEON Vietnam Co., Ltd. (AEON Vietnam) has launched the Aeon Mall Plus e-commerce platform to implement a model combining online and offline business.

Other domestic enterprises are also not ignoring the retail real estate market. Truong Hai Group (Thaco) revealed that by 2026, Thaco aims to expand its system to 14 locations from North to South, becoming a leading trade and service group and making Thiso Retail - Emart Vietnam the hypermarket brand with the number one market share in Vietnam.

Source: https://baodautu.vn/batdongsan/trung-tam-thuong-mai-chat-vat-de-ton-tai-d256031.html