Savills Researcher Sees Vietnam’s Retail Market “Extremely Appealing”

Tuan Minh

09:15 13/07/2017

BizLIVE - The researcher noted that the “Bricks and Clicks” model has become increasingly common in order to engage shoppers and strengthen sales.

Savills Researcher Sees Vietnam’s Retail Market “Extremely Appealing”

Vietnam's retail market is considered "extremely appealing". Photo: Internet

A wide range of factors are making Vietnam’s retail market “extremely interesting and appealing”, said Do Thu Hang, associate director of research at Savills Hanoi.
The country’s retail sales reached 1,443.4 trillion dong ($63.5 billion) in the first six months of this year, representing an increase of 10.2% from a year earlier, according to government data.
U.S. consulting firm A.T. Kearney in early June put Vietnam at the sixth position in the Global Retail Development Index (GRDI), up five places from the previous report, marking the country’s return to the top ten ones which are the most attractive to retailers.
Vietnam moves ahead and is merging as an important market for retail expansion with its liberalized investment laws, A.T. Kearney said. With favorable government policies, urbanization, a growing middle class, and a relativity young population, foreign retailers have reasons to be positive about the country.
  Do Thu Hang, associate director of research at Savills Hanoi. Photo: Minh Tuan
Hang noted that the “Bricks and Clicks” model has become increasingly common in order to engage shoppers and strengthen sales.
Traditional retailers are applying more technologies and widen their presence on social media to attract buyers. Vingroup, Aeon and Lotte, for example, have launched websites that have seen huge hits.
Sales of eateries have been on the rise thanks to technological application in receiving online orders and delivery. Similarly, entertainment companies have enjoyed stronger sales by allowing ticket booking on mobile devices.
In addition, the fast-growing middle income class in the Southeast Asian country is giving a great boost to middle-end goods. An estimated 40 million people will be classified as middle-income earners by 2020 and the figure will rise to nearly 100 million by 2030, Hang said.
To seize this opportunity, affordable fashion retailers have been strengthening their foothold in both Hanoi and Ho Chi Minh City, evidenced by moves of transnationals Zara and H&M.
Reviewing performance of the retail property market in Hanoi, the Savills researcher noted a recovery after a period of lackluster activity.
In Q2/2017, the total retail stock was nearly 1,250,000 m², up 0.4% quarter-on-quarter and 7.4% year-on-year thanks to the entry of two new shopping centers, cumulatively supplying approximately 37,200 m².
Average ground floor rents recovered with a slight 3.0% quarter-on-quarter growth. Average occupancy maintain an upward trend increasing 3.5% from the previous quarter due to improvements in all three segments namely department store, shopping center and retail podium.
  Source: Savills.

 

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