Opening of Takashimaya trade center in southern city a milestone for Vietnam's luxury retail market.
Japanese retail group Takashimaya will launch its first-ever trade center at the Saigon Center in Ho Chi Minh City on July 30, with investment of $25 million.
This further marks the group’s business expansion into foreign markets, especially in Southeast Asia.
“The trade center is in the final stages of completion prior to opening,” according to Ms. Phung Thi Xuan An, Public Relations Supervisor at Takashimaya Vietnam.
Located on Le Loi Street in the city center, Takashimaya has five floors on an area of 15,000 sq m. Its opening is a milestone in Vietnam’s luxury retail market, offering a high-end shopping experience in the south of the country.
With a young population, rising middle class and one of the fastest growing economies in Southeast Asia, Vietnam is becoming a “magnet” in attracting many Japanese retailers such as Aeon Japan, Takashimaya, and 7-Eleven Holdings.
In a previous interview with VET, Mr. Tadahiko Ishikawa from Aeon Vietnam’s Hanoi Branch said that Vietnam’s young population is an advantage in the development of its retail sector. “The number of nuclear families has also increased, as have living standards,” he said. “The demand for consumer goods and entertainment services, therefore, will rise in the future.”
He added that the liberalization of Vietnam’s economy continues apace, with rules relaxed on foreign businesses setting up operations in the country. “This creates more opportunities for foreigner retailers to develop retail facilities in Vietnam,” he said.
Vietnam’s retail market is now attracting a great many foreign retailers. The country has continually been among the world’s Top 30 most attractive emerging retail markets since 2008 in the Global Retail Development Index (GRDI) published annually by AT Kearney from the US.
Among the 12 common retail models, businesses have the highest expectations in the modern retail model. General supermarkets and shopping centers are considered to have the most promising outlook and are a strength of foreign retailers.
A recent Nielsen’s report, however, showed that traditional retail channels are still favored in Vietnam, growing at a rate 5.4 per cent higher than modern channels and accounting for 85 per cent of all revenue in fast-moving consumer goods, or $10 billion.
Vietnam’s retail market has recently seen some major merger and acquisition (M&A) deals. In April the Casino Group officially announced it had closed its sale of Big C Vietnam to Thailand’s Central Group for an enterprise value of $1.14 billion. Metro Cash & Carry Vietnam was also sold by the Metro Group to TCC Land International Pte.
According to figures from MoIT, Vietnam’s retail market in 2015 was estimated at $102 billion. There are now over 700 supermarkets and 132 trade centers, of which 22 are 100 per cent foreign-owned.
It is expected that retail growth will reach 11.9 per cent by 2020 with a retail market size of $179 billion, of which modern retail will account for 45 per cent.