VietNamNet Bridge – Although there are many well-off Vietnamese who are willing to spend money on expensive items, luxury malls may still not succeed in the market.

Seven years ago, an official of the of the Ministry of Construction at a groundbreaking ceremony for a new shopping mall in Ha Dong district in Hanoi, said: “Vietnam is not the right place for setting up luxury shopping malls which only sell branded goods, though the number of upstarts has been increasing rapidly.”

Many participants at the event expressed disagreement with him. However, the official’s prediction has come true: many high-end shopping malls in Hanoi have shut down or have been performing badly.

Trang Tien Plaza

The luxury shopping mall, located in the central area of Hanoi where there is prime real estate, officially reopened in late December 2014 after four months of interruption.

This was the second time Trang Tien Plaza had to halt its operation to undergo a restructuring process.

Analysts noticed that the shopping mall has returned with a new face. Many stalls distributing popular products priced between tens of thousands and hundreds of thousands of dong have appeared.

In the past, only luxury items, valued at millions of dong, were available at the shopping mall.

It is obvious that Trang Tien Plaza now targets not only the rich, but other income levels as well.

Pham Sy Liem, deputy chair of the Vietnam Construction Federation, noted that in theory, both low-cost and high-end products can find buyers because of the existence of a variety of income levels in society. Therefore, investors had reasons to decide to develop high-end shopping malls in Vietnam.

Luxury shopping malls

However, he noted, the investors’ business plans may fail completely in Vietnam just because of the special spending habits of the Vietnamese.

“It is obvious that low-income earners will not go to luxury shopping malls like Trang Tien Plaza to buy the things they need,” Liem said. “Meanwhile, the rich, who can afford products available at these malls, do not choose to buy products there.”

Market surveys found that they would rather look for the products from other sources, either via the internet or from travelers who bring goods to Vietnam across border gates or by air.

A branding expert noted that wealthy Vietnamese have an “innocent” belief that they will be able to buy unique products from distribution sources.

“Since shopping malls are open to everyone, the products available there are not original and unique enough for rich and choosy buyers,” he noted.

TBKTVN