Foreigners taking actions to swallow retail market

A lot of big foreign retailers are making hectic preparations to expand their operation in Vietnam in order to obtain “bigger pieces of the cake” of the very lucrative market.

Malaysian Parkson Retail has clearly shown its expansion plan in the Asian market. South Korean GS Retail is seeking domestic partners. Meanwhile, Vietnamese Vincom has said it is planning to open many more shopping malls in the time to come. The moves show that the retail market has become hotter than ever, the retail premises would be short, while the competition on the retail market would be very stiff.

The plans of the “big guys”

Parkson, the well-known Malaysian shopping mall developer and manager, belonging to Lion Group, set foot in Vietnam in mid 2005. The name of the retailer has once again appeared in many newspapers these days, when news was released that Parkson plans to list its shares on Singaporean bourse, in order to mobilize 300-500 million dollars worth of capital which would be used for the plan to expand the system in Asia.

K.P.Singh, Managing Director of DTZ Vietnam, a market survey firm, noted that the brand “Parkson” has become popular to Vietnamese middle class consumers. Meanwhile, Parkson also considers Vietnam the key market in South East Asia. Therefore, it is understandable why Parkson plans to expand its operation in the country.

In 2008, when talking to local press, Tham Tuck Choy, General Director of Parkson Vietnam, affirmed that Parkson Vietnam’s strategy is to open more and more shopping malls in big cities of Vietnam, including HCM City, Hanoi, Nha Trang and Can Tho.

At that time, the retailer ran only three shopping malls in HCM City in cooperation with Vietnamese Hung Vuong Plaza, Saigon Tourist and CT Group. However, it still dreamed of opening 2-3 new centers a year.

Parkson has initially succeeded with its expansion plan, as the number of shopping malls with Parkson brand has increased to five (including Parkson Le Dai Hanh in district 12 in HCM City, and Parkson center at Saigon Paragon project in district 7).

Meanwhile, the retailer has signed a contract with CT Group on managing the Léman C.T Plaza Nguyen Dinh Chieu project in district 3 of HCM City, which is expected to be completed by 2013.

Prior to that, in July 2011, Parkson Vietnam signed an agreement with VinaCapital on leasing and managing the shopping mall at the The Gioi Da Nang project which is expected to be completed by 2012.

Sources said that in choosing retail premises, Parkson always sets up two requirements: the area needs to be large enough and the retail premises must be on advantageous positions.

Lee Seung Huyn, the representative of GD E&C in Vietnam, when talking about the plan to use the land plots in HCM City, has told Thoi bao Kinh te Vietnam that a complex of shopping mall, office and accommodations would be developed in the land plot in Thu Thiem new urban area in the city

However, this would happen only in the future, when the Thu Thiem new urban area takes shape. Meanwhile, for now, GS Retail has obtained a large land plot located near the My Phuoc 3 Industrial Zone in Binh Duong province after Baum Hee, Business Director of GS Retail revealed the intention to seek partners to open a shopping mall in Binh Duong in late 2008.

There is another foreign investor, who has shown the plan to develop shopping centers in HCM City – Mapletree Investment, belonging to Singaporean Temasek.

Chua Tiow Chye, Managing Director of Mapletree Investment, has said that with Saigon South Place project in a district which would be developed in cooperation with Coop Mart, 72,000 square meters would be reserved for retail space. The project would be designed in a way to follow the model of VivoCity Mall which has been very successful in Singapore.

It is expected that the retail space of the project would be open in 2014.

Source: TBKTVN

Tags: Vietnam retail, vietnam retail industry, Vietnam retail market, Vietnam super markets