VietNamNet Bridge – Small shops in alleys and at street corners are proving to be more profitable than flashy luxury shopping malls.

 

 

Nguyen Thu Ha, an interpreter for a foreign-funded transport project, said she often goes to a small shop in Dong Da district when she wants to buy branded goods.

Ha, with the monthly income of $1,300 a month, is considered a “high income earner” in Vietnam, and she can afford luxury branded goods.

However, the shopping malls she usually visits are not Trang Tien Plaza or Parkson, the most famous in Hanoi, but small shops with no signboards located in small alleys.

A shop in Dong Da district, according to Ha, covers an area of 20 square meters, where goods are not displayed in a reasonable way to catch customers’ eyes. 

“However, I know the goods there sell very well,” Ha said.

A branding expert noted that Ha, like many other high-income earners, especially women, always try to “hunt” for unique branded goods which only have copies. 

They prefer buying goods at small shops because they believe the selling prices there are lower than those at luxury shopping malls.

“Luxury shopping mall owners have to pay a lot for retail rent, while small shops don’t have to,” he explained.

Commenting about the poor performance of some high-end shopping malls in Hanoi, the expert said the mall owners had incorrectly estimated the purchasing power and shopping habits of the Vietnamese upper class.

“The foreign products brought to Vietnam by travelers across border gates, smuggled goods, or goods from out-of-the-way shops or others are more attractive to high income earners than products displayed at luxury shopping malls, which everyone can see,” he noted.

This is why some shopping malls are now restructuring their business by offering goods for the average customer.

In late 2014, Hang Da Galleria announced it would close temporarily for restructuring.

Many shops at Grand Plaza on Tran Duy Hung street, conisidered a “shopping paradise” in Hanoi, have closed after two years of operation because of low sales.

Mipec Tower at No 229 Tay Son street still had difficulties even after it changed its name. The investor has decided to transfer the four trading floors, with an area of 20,000 square meters, to Lotte Group of South Korea.

DNSG