Vietnam becomes a shopping paradise, why not?

At the end of 2022, Vietnam's first street-level duty-free store will officially open to welcome customers in Da Nang, marking a major turning point for the shopping tourism market - a fertile land that Vietnam has neglected for many years.

How do countries "extort money" from tourists?

Returning from a 5-day, 4-night trip to Japan, Hai Anh (living in District 4, Ho Chi Minh City) concluded that she had contributed more than 80 million VND to the tourism and trade industry of the land of the rising sun. It is worth noting that more than half of that amount "flew away" after just one shopping trip in Tokyo. "If the airfare and accommodation costs in Japan were cheaper, the amount spent on shopping would definitely be more. Because I want to take everything I see home," she said.

Vietnam still has great room to exploit shopping tourism.

NHAT THINH

In Hai Anh's tour program, there are 3 shopping destinations: Ginza and Shibuya in Tokyo; Factory Outlet in Fukushima and the famous Japanese supermarket system - Aeon Mall. In particular, Ginza is known as one of the most luxurious shopping areas in the world. The world's leading high-end fashion brands such as Chanel, Dior, Gucci, and Louis Vuitton... all gather here. Mr. Tuan Thanh, a tour guide with 18 years of experience leading tours to Japan, said: In the past, Vietnamese people came here just to walk around because this area was full of luxury goods, only the rich could buy them. Even the Japanese people walking around here were also luxurious people, wearing gorgeous makeup. However, in recent years, every group of tourists he leads wants to go to Ginza to shop. "Vietnamese customers are increasingly willing to spend and prefer branded goods," Mr. Tuan Thanh commented.

Ginza is also one of the best places to see the lights in Tokyo. After the shops close and shoppers go home, the neighborhood takes on a second look: a nightlife district filled with lights, bars, and high-end nightclubs. "Getting lost in Ginza from afternoon to night is equivalent to 3 months' salary at home," Hai Anh said.

However, the "ting ting" sound of the debit card from the visa card seemed not to be enough to cool down the shopping spirit of the Vietnamese group. The bus had just stopped at the Factory Outlet area of ​​thousands of hectares near the highway on the way from Tokyo to Fukushima, the whole group quickly got off to have lunch quickly to go shopping because according to the schedule, the stop at this point was only 2 hours. Coach, Nike, Adidas, Puma..., hundreds of clothing, shoe, and handbag brands with discounts of up to 70 - 80% fascinated the "shopaholics". Each person had big and small bags, calling out to each other which shop, which counter had the most promotions. The same scene also happened when arriving at Aeon Mall. Mr. Thanh's group also asked to shorten the tour program, changing the schedule from 2 hours to 4 hours at Aeon Mall to have enough time to spend money.

"There is room for tourists to shop freely in every segment. The goods are of high quality, and they can get a tax refund right on the spot by just showing their passports. No wonder people are fascinated. Wandering around, eating, and shopping is becoming a trend for tourists, instead of just focusing on sightseeing like before. That is the reason why most travel businesses today build more open tours, with more free time for tourists to experience," tour guide Tuan Thanh shared.

Similarly, Singapore's most luxurious street - Orchard Road is a typical example of the success of the national tourism brand from shopping services. Few people know that before, Orchard Road was just a rural road with bamboo fences and bushes, and did not even have a name. Surrounded by fruit gardens, farms and plantations. In 1958, businessman CK Tang decided to expand the House of Tangs department store in Orchard Road and laid the foundation for Orchard Road to witness the transformation from a plantation area into the most vibrant urban area, likened to New York's Fifth Avenue, Paris's Champs-Élysées and London's Mayfair of the East. This is considered the most famous shopping and entertainment complex street in Asia, not just Singapore. Every year, this area attracts a huge number of tourists, up to 7 million people. Or the Adventure Cove Waterpark complex also contributes more than 2% to the GDP growth of the lion island every year.

In Hong Kong, the Disneyland entertainment complex alone welcomes more than 100 million visitors each year, contributing to economic growth of more than 1.5%. The power of shopping and entertainment is also the reason why Korea focuses on building hundreds of night markets, serving shopping, dining, and entertainment for tourists in almost all cities. Among them, the Myeongdong shopping and culinary district stands out, attracting about 1 million people every day, mostly tourists. This district is on par with famous shopping districts in New York, Hong Kong, Milan or Paris and has become one of the must-see places for tourists in Korea.

Thailand, Vietnam's leading tourism "rival", has also developed a tourism model based on events, parties, and nightclubs. Considered a "no-go" destination, Pattaya is ranked 2nd in the top most attractive tourist cities in the world, after London. Thailand's shopping tourism contributed to a sharp increase in international spending revenue with a growth rate of 28.2% in 2020 and tourist areas are an important part of the huge revenue of 57 billion USD for tourism in this country.

Tourist capitals "hungry" for shopping spots

Every year, Vietnamese travel companies organize tens of thousands of tours to bring Vietnamese tourists to Singapore, Thailand, Japan, South Korea, etc. just to stimulate consumption in their neighboring countries. Meanwhile, on the contrary, tourists coming to Vietnam for many years are still struggling with the question of what to do and where to spend money. In August, social networks were abuzz with the story of a Mexican architect bringing a paper horse bought on Hang Ma Street to the airport to bring back to Vietnam as a souvenir. The story of the paper horse seems small but it makes many people ask the question: "When coming to Vietnam, is it true that only votive paper is strange and worth buying?"

According to the 2022 Statistical Yearbook, the average spending per international visitor to Vietnam has increased slightly from 1,141.5 USD in 2017 to 1,151.7 USD in 2019, but compared to 2014, spending on shopping has decreased sharply by nearly 6% (in 2014, shopping accounted for 18.34%, by 2022 it was only 12.4%). Notably, Chinese visitors - the world's No. 1 famous spender - are in the top markets with the least spending when coming to Vietnam, along with the largest markets such as Korea, Japan, Thailand, etc.

The first Downtown Duty Free joint venture in Vietnam

The reason is that Vietnam's product system is still poor in both local and branded goods. Tourists coming to Japan want to buy Japanese domestic goods, going to Thailand want to buy Thai goods, going to Korea they "rush" to Korean domestic shopping areas, but almost no one comes to Vietnam to buy Vietnamese goods. At tourist attractions, night markets, and walking streets, only miscellaneous items are sold, mainly from China. Local souvenirs have not been invested in, domestic goods are not guaranteed to be of good quality, and there are no suitable shopping places for tourists to spend money. Meanwhile, the "battlefield" of branded goods is almost empty when there is no policy to develop factory outlet areas, duty-free shops on the street...

At the end of 2022, the joint venture between Lotte duty-free business group and IPPG member company of "king of luxury goods" Johnathan Hanh Nguyen opened the first joint venture duty-free store (CHMT) in Vietnam (Downtown Duty Free) in Da Nang City with a total investment of up to tens of millions of USD. Not only gathering more than 200 world-class international brands with a variety of products from cosmetics, alcohol, tobacco, jewelry, watches, fashion, this CHMT of more than 2,000 m2 also introduced to the global duty-free market for the first time famous domestic brands such as Phu Nhuan Jewelry - PNJ, Long Beach Pearl pearl jewelry, Miss Saigon perfume, Trung Nguyen Café G7, Cochine Vietnam...

Immediately, this CHMT area became a "magnet" attracting Korean tourists from hundreds of charter flights, and quickly appeared in the top must-see destinations when coming to the tourism capital of Central Vietnam. However, the leader of the Da Nang Department of Tourism admitted that due to the lack of good connections, this CHMT has not really created a "boost" for the shopping tourism market in the city. Besides, to really promote this field, Vietnam must really promote the shopping destination brand. If we want localities to build their own brands, there must be very specific preferential policies, like what China did on Hainan Island.

Da Nang is not the only locality that is "hungry" for shopping spots. From Phu Quoc to Da Lat, Nha Trang, Hanoi... tourists mainly just go sightseeing during the day and then return home at night, with no place to play or shop to spend money. The shopping battlefield leaves even more regrets in Ho Chi Minh City. Because, although the economic locomotive is the shopping and commercial center of the whole country, it still does not have a shopping and entertainment center worthy of its stature. The most "famous" shopping area today is Ben Thanh market, but it mainly sells "fake" clothes, shoes, accessories, jewelry, and poor quality Chinese goods. The city also has branded streets such as Dong Khoi, shopping streets from low to mid-range such as Nguyen Trai; hundreds of shopping establishments are granted signs of shopping services that meet tourism standards, and have VAT refunds for tourists. However, each segment is not organized systematically, only operates spontaneously and separately, so it does not create an effect.

What room for Vietnam?

According to the World Tourism Cities Federation (WTCF), the scale of the shopping tourism industry will reach 61 billion USD in 2022, of which Korea will hold 16 billion USD. Asia-Pacific countries account for 53% of the market share of the commercial shopping tourism market, but Vietnam's shopping ratio is only a few hundred thousand USD. "King of luxury goods" Johnathan Hanh Nguyen, Chairman of the Inter-Pacific Group (IPPG), compared this figure of Vietnam to just a "drop of water" compared to the general level. That is also the reason why although the growth rate of Vietnam's tourism is equivalent to Thailand and always leads in Southeast Asia, the number of visitors and spending levels are still far behind. The lack of entertainment, shopping and recreation venues is also the basic infrastructure bottleneck that has prevented Vietnam from lighting up the night-time economy.

Mr. Johnathan Hanh Nguyen said frankly that without shopping, tourism and the night-time economy cannot be developed. Vietnam needs to invest and develop local souvenirs and domestic goods with guaranteed quality to promote on-site exports. However, branded goods are the field where we still have a lot of room, especially in Ho Chi Minh City. Specifically, the 10-year socio-economic development strategy (2021 - 2030) has identified the direction and task of promoting Ho Chi Minh City to become an international financial center. The resolution was approved by the City People's Council along with a strategy to invite international enterprises to cooperate. Currently, Long Thanh International Airport is being built with a scale of 100 million passengers/year, becoming a hub for the region and the world. In addition, enterprises such as IPPG have negotiated with suppliers to achieve selling prices equal to those in France, Singapore and lower than those in China, even though they are retail and subject to taxes. If conditions are created to form factory outlet areas and duty-free shops on the streets, Vietnam will be a "magnet" attracting international visitors to spend money.

"Within that 61 billion USD scale, we must build a plan right now to capture 10 billion USD. 10 billion USD is very large, creating more jobs, promoting growth, production, and consumption. Currently, instead of focusing on jobs that bring in an income of 8-10 million VND/person/month, we need to focus on prioritizing the development of high-revenue industries to reach the income level of a developed country by 2045 as planned," Mr. Johnathan Hanh Nguyen emphasized.

Associate Professor, Dr. Pham Trung Luong, former Deputy Director of the Institute for Tourism Development Research, also said that the time when localities are determined to develop the night economy is a "golden opportunity" for Vietnam to exploit the fertile land of shopping tourism. Because a night economy model needs to fully meet 3 components: entertainment, dining and shopping. The night economy complex will include a culinary paradise; entertainment space and shopping area that can sell souvenirs, traditional Vietnamese goods or outlet areas, branded goods, duty-free goods with guaranteed quality and control. Developing shopping tourism will actively stimulate shopping and increase spending of international tourists to Vietnam. At the same time, promote the development of the domestic textile and fashion industry. From a shopping paradise, Vietnam can move towards a fashion center.

INDEPENDENCE

Ho Chi Minh City must have commercial centers and high-end shopping stores.

Thailand, Singapore, Malaysia are almost at the ceiling, while we still have a lot of room. Thu Duc City still has hundreds of thousands of hectares of unexploited land. What is there to hesitate? Ho Chi Minh City must have commercial centers and high-end stores. Mr. Johnathan Hanh Nguyen , Chairman of the Inter-Pacific Group (IPPG)

INDEPENDENCE

Soon to have a shopping center dedicated to international tourists

The strategy to stimulate tourism through shopping should be considered as part of the Vietnam Tourism Development Strategy as well as the Vietnam Goods Export Strategy to build truly encouraging policies. We need to soon have a shopping center dedicated to international tourists at the country's top tourist destinations so that the basic rights of tourists are guaranteed. At the same time, it is necessary to strengthen activities to promote the image of Vietnam tourism as a destination that is not only attractive for its nature, culture and people but also a shopping destination in the region, fully meeting the diverse needs of tourists with the assurance of product quality, reasonable prices and clear origin.

Associate Professor, Dr. Pham Trung Luong , former Deputy Director of the Institute for Tourism Development Research

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