Hanoi Retail Market Booming at Year-end

In the third quarter of 2013, Hanoi retail market had a new breakthrough with the opening of the super underground trade centre Vincom Mega Mall Royal City of Vingroup. This shopping centre of 230,000 square metres has contributed more than 600 stores displaying global luxury brands, plus more than 200 service and dining areas. The Royal City is on the way of becoming a top attraction, travel and premier shopping of the capital.

 

At this grand place, Ocean Mart has opened a branch of 10,000 square metres. Ocean Retail is also preparing to launch another grand supermarket of more than 11,500 square metres in Vincom Mega Mall Times City (458 Minh Khai Street, Hanoi), besides two other supermarkets in the urban areas of Trung Hoa Nhan Chinh and Pham Ngoc Thach Street.

 

Later this year, Saigon Coop will also expand its business in Hanoi, taking over full premises in Nam Do project to open a supermarket with total area of ​​10,000 square metres.

 

However, the highlight on the retail market which holds attention of many people is the coming into operation of Mega Mall Times City of Vingroup, a shopping mall with model of international standards and area more than 200,000 square metres. Vincom Mega Mall City Times City will own a Shopping World of 82,000 square metres with more than 300 stores together with a grand Ocean Mart (11,500 square metres). Besides, the food area of ​​nearly 15,000 square metres, with about 90 booths provides tasty dishes from different cultures, presenting the largest and most attractive food service complex in Southern Hanoi.

 

The expanding of retail enterprises, competing to domination the market shows that Vietnamese businesses had “confidence” and were prepared to confront with big foreign corporations.

 

With the advantage of a young and large population, especially in the two major cities Hanoi and Ho Chi Minh City, Vietnam is becoming a potential destination for foreign investors. According to Ms Dinh Thi My Loan - Chairwoman of the Association of Vietnam Retailers (AVR), the recent public opinion that the “attack” of foreign retailers in Vietnam market had shrunk the market share of domestic enterprises was a misconception. The market share for domestic firms was still large and full of opportunities. But domestic companies must really rise to the opportunities to meet consumers’ demand. According to ARV’s survey, consumers at big cities believed that each domestic brand had its own strength and weakness which businesses should focus on. The most interesting is that experts and foreigners in Vietnam has showed huge favourite in Vietnamese retailers such as Fivi Mart or Co - op Mart, even more than international ones. This results shed more hope about the competitiveness of Vietnamese retail businesses, at the same time provides enterprises motivation to enhance innovation for development.

 

Alongside with the wave of investment and market expansion in Hanoi market, retailers are also seeking to diversify their services. According to Vingroup’s announcement on December 24th 2013, the group is going to launch the biggest shopping centre, educational and health consultancy dedicated to children aged 0-15 years old in Vietnam (VinKC). This centre located in Vincom Mega Mall Times City will include a toy world, a candy house largest in Vietnam, a luxury fashion area, a healthy food supermarket providing families with nutritious and nourishing food, an educating book store.

 

Among the positive performances in Hanoi retail market, it can be seen that VinGroup was emerging as one of the biggest retail groups with large areas covering various types of services. This will generate motivation and confidence for domestic retail business to continued expanding services, creating a solid platform to compete with big international retail groups which are beginning to penetrate the Vietnam market.

 

It can be seen that Hanoi retail market is gradually regaining its momentum. Although consumer spending is not really prospered, many economists still identified Vietnam as one of attractive markets due to the fact that Vietnam is in the period of “golden population” and our income per capita is increasing, especially in the two largest cities Hanoi and Ho Chi Minh City.

 

However, in 2015, Vietnam's retail market will be officially opened under the WTO commitments, which will pose as a huge challenge for domestic businesses. Therefore, to maintain market share and compete with retailers overseas, in parallel with expanding development scale, Vietnam retailers should prepare strategic moves to enhance quality product and service, at the same time maintain competitive prices, thereby shore up market confidence still weakened, ready to “welcome” foreign retailers.