VietNamNet Bridge – While the network of large-scale shopping malls has been expanding rapidly, the department store development has slowed down, attributed to the changes in the consumers’ tastes.

According to Truong An Duong from Savills, a real estate consultancy firm, there are three reasons that make Vietnam attractive to foreign retail groups. Two of them are the young population and the sharp increase of the middle-class income earners.

The third reason is that Vietnam will cut down tariffs from 2015 within the framework of its bilateral and multilateral free trade agreements. This will provide foreign distributors with great opportunities to develop large-scale shopping malls in Vietnam.

Analysts noted that Mapletree tends to cooperate with domestic partners to develop shopping malls in new urban areas near the center which target middle-class consumers.

Meanwhile, Japanese retailers follow the “all-in-one” model, planning to develop shopping malls in suburbs which are being urbanised.

Aeon, for example, set up its first shopping mall in Celadon City, a new urban area in Tan Phu District. Its second shopping mall, located in Thuan An Town of Binh Duong Province, would be operational by the end of the year. Meanwhile, the third one would be located in Binh Tan District.

Sources said that Aeon is considering developing a shopping mall in District 8, where there has been no large-scale shopping center.

Prior to 2010, Parkson Plaza, Diamond Plaza and Zen Plaza were the names that were most mentioned for shopping.

However, since 2010, when Vincom Center B opened, it has become the new point for the middle-class in HCM City to go shopping.

At that time, the developers of many department stores had to restructure their images and change their designs  to attract more tenants and consumers. Zen Plaza was a typical example.

Parkson, a Malaysian department store developer and manager in Asia, which has seen profits fall, has talked about restructuring.

By the end of 2013, Parkson had opened eight department stores, including five in HCM City and two in Hanoi. In the first quarter of 2014, it opened one more in HCM City.

The retailer announced earlier this year that it would open 10 new department stores in Malaysia, Vietnam and Indonesia in 2014.

However, Parkson’s sales have been decreasing significantly in important markets. Parkson Vietnam’s turnover in the first six months of 2013 dropped to $4 million from $7.6 million. In the second half of 2013, it reported a record low growth rate of 2 percent.

Tham Tuck Choy, general director of Parkson Vietnam, said online sales have begun developing rapidly in Vietnam, while more large-scale shopping malls have been set up, attracting many customers.

Analysts noted that under its business development plan, the Malaysian retailer is expected to increase investments in the shopping mall segment, hoping to develop 50 shopping malls by 2022 in Asian markets.

DNSG