Stiff Competition Pushes Malaysia’s Parkson out of Hanoi

Tuan Minh

15:06 22/11/2016

BizLIVE - Malaysian department store operator Parkson is closing the last store in Hanoi due to increasingly fierce competition.

Stiff Competition Pushes Malaysia’s Parkson out of Hanoi

Departments at Parkson Viet Tower offer selloffs. Photo: VnEconomy

Malaysian department store operator Parkson Holdings has announced that it will close the third and the last outlet in Hanoi on December 15 after eight years of operation due to anemic sales and growing competition from other retailers.
The store, Parkson Viet Tower, is located at a busy commercial zone in Dong Da district, informed of the “displacement” to business partners two months ago and the move will not affect rights of Parkson loyal clients, the firm said.
The firm did not disclose an alternative location for the displacement.
Fierce competition from other shopping centers with accompanying conveniences and rapid growth of online shopping are possible factors behind the closure of the outlet.
Parkson’s department store format was a success when it entered Vietnam with many luxury brands. However, sales have become stagnant as Vietnamese consumers now prefer going to shopping centers where they not only can shop but also do other leisure activities such as watching movies, eating and playing games.
According to Parkson Asia Limited’s financial statement quoted by the Saigon Times, the retailer saw its sales in Vietnam in the three quarters through March 31, 2016 down 8.2% from a year earlier and posted a pre-tax loss of $3.5 million.
Due to poor performance, Parkson has been downsizing its operations in Vietnam in recent years.
In early 2015, the Malaysian firm closed its outlet in the Keangnam Tower in Hanoi amid a high shopping season after four years of becoming operational.
In May this year, the retailer closed its Parkson Paragon 19,000-square-meter store in Ho Chi Minh City’s District 7, 14 years before the leasing contract expires.  
With the latest move, Parkson now operates seven stores – five in Ho Chi Minh City, one in the central city of Da Nang and one in the northern port city of Hai Phong.

TUAN MINH