Not the strong financial capability, professionalism, or attractive prices, but the most important factor that can help bring success to retailers, according to experts, is the advantageous position.
Dr. Dinh Thi My Loan, Deputy Chairwoman and Secretary General of the Vietnam Retailers’ Association, said that the retail premises always play a very important role in retailers’ business, and that getting advantageous positions for retail premises has always been the top priority of retailers.
Tran Quoc Khanh, Director of the Multilateral Trade Policies Department under the Ministry of Industry and Trade, also said that the most important factor for retailers are advantageous positions.
Statistics showed that the retail turnover in Vietnam’s market reached US $45 billion in 2007, while the retail market has the growth rate of 20% per annum. With the current growth rate, the retail turnover is expected to reach over US $60 billion by 2010. Despite the big economic difficulties, Vietnam remained one of the few economies in the world which obtained the plus growth rate in the first three months of the year.
The survey released by the CBRE, a commercial real estate service provider, at the end of 2008 showed that the leasing fee of retail premises in the central area of Hanoi is now hovering around US $65-150/month, while the leasing fee for the positions located in non-central areas is about US $25-60/month.
If comparing with the leasing fee of retail premises on advantageous positions in several cities of Asia, the average leasing fee in Hanoi is higher than the average leasing fee in Bangkok, Thailand, Manila, The Philippines, and Jakarta, Indonesia. In Tokyo, Japan, the average leasing fee is as high as US $400/square metre/month. Especially, the leasing fee is very high in Hong Kong, at US $600/sq m/month.
It is expected that Hanoi will have 41,000 sq m of premises for leasing in 2009 and 2010. One of the addresses that retailers are now eyeing are the Vincom Galleries belonging to Vincom Park Place (VPP), a 25-storey building, linking with the twin tower Vincom City Towers. Expected to become operational in August 2009, Vincom Galleries is expected to provide over 14,000 sq m of premises in the central area, raising the total area of Vincom trade centre to 35,000 sq m.
Retailing is now considered the field which specially attracts foreign investors. The global surveyor RNCOS said that Vietnam is one of the seven most profitable retail markets in the world, and that domestic and foreign distributors now have to queue up to get a part of the Vietnam’s market share.
A lot of international brand names have been flocking into Vietnam, and more will arrive in the time to come. In 2008, Vietnam ranked the first in the global retail development index.