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Vietnam retail sector is undergoing a dramatic transformation and evolution

Released at: 18:43, 11/05/2018

Vietnam retail sector is undergoing a dramatic transformation and evolution

Photo: Ngoc Lan

The future of shopping will be heavily influenced by the younger generations along with the development of retail technology.

by Ngoc Lan

Vietnam’s retail sector is undergoing a dramatic transformation and evolution, according to Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam. He made this statement at the workshop “Next Generation Retail – Embracing Design for Future Opportunities” which was held by Savills Vietnam on May 10 in Hanoi.

Mr. Troy pointed out that in the past, this type of contemporary retail was very rare.

However, a series of new products now are appearing on the market and many shopping centers that have modern designs are sprouting up. Retail is changing everyday, and this also has a big impact on consumer behavior.

“In the future, we will have the chance to witness many new retail models with modern facilities that are entertaining and creative,” he added. “In addition, the e-commerce market in Vietnam is growing rapidly with the development of smart technology. All these changes and evolutions are aimed to serve consumers.”

At the workshop he also said that in addition to the transformation of the traditional retail model, technology investments such as apps, smartphones, and e-commerce make the purchase of goods much easier. The recent cooperation of many traditional retailers and e-commerce platforms is also a response to the adaptation and change towards a retail paradigm that fits with the times and consumers.

Mr. Troy also affirmed that it’s very unfortunate that foreign retailers who want to enter the Vietnam market don’t pay attention to the market potential, the dynamics of the young population, and the habit of using a smartphone. Understanding consumers, especially consumers in Vietnam, is not easy. That’s why the retail market in Vietnam is not suitable for those who just focus on the potential of a rising market. The younger generation also carries a decisive factor that affects the majority of consumer habits and behaviors.

“We have witnessed many successes and failures and the lesson is to learn thoroughly before implementing any plans,” said Mr. Troy. “The Vietnamese market has many factors, including ideal timing, fast expansion, high-income consumers and diverse shopping preferences.”

Also at the workshop, Mr. Trevor Vivian, Managing Director of Benoy Architecture & Master Planning said that shopping centers are changing throughout Asia partly because of the change of consumers and their habits.

The change of the Vietnam retail market is very obvious, especially in HCMC and Hanoi. The change comes from the transformation of the early economic market into an economy that can be called “delicate.” It comes from the retail sector itself. Even design trends have spread to the food industry. In addition to being delicious, Vietnamese food is also extremely beautiful. “The market is changing so fast, so we need to quickly learn more,” Mr. Trevor noted.

Mr. Trevor also mentioned that foreign brands entering the market is a positive sign. “This combination will bring about a change in the retail and consumer environment in Vietnam,” he added.

On the other hand, Mr. Nicholas Bradstreet, Managing Director, Head of Leasing, Savills Hong Kong said that Vietnam's retail sector achieved impressive growth of about $129.6 billion in 2017, up 10.6 per cent from 2016. “Retailers as well as landlords need to be prepared to respond to new trends, such as adding more entertainment value and food for customers in addition to shopping,” he added. “The pop-up store model is also a popular solution as it has a wide range of activities such as product launches, branding, and market testing.”

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