Family Mart has decided to follow the lead of Parkson Retail Asia and stop throwing good money after bad into the Southeast Asian Vietnamese retail market, according to a report by Reuters.

Reuters quoted Koji Takayanag, president of FamilyMart UNY, which now owns the second largest convenience store chain in Japan, as saying the company has decided to cut its losses and move on to more promising markets.

In November 2016, Parkson closed its last department store in the Vietnam capital city of Hanoi following eight successive years of red ink.

The 11,000-square metre department store located in Viet Tower in the city central business district once held the promise of becoming a beacon of the city’s new-found prosperity and the busiest shopping plaza in Hanoi.

However, after eight years, the company had little to show for its investment and opted for the exit ramp.

Another Hanoi Parkson in the Keangnam area was closed due to a purported dispute between the retailer and the building owner. All retailers had to move out of the building overnight. Former Parkson CEO Toh Peng Koon once said Vietnam was the toughest market for the company and poor sales was the main reason for that closure.

In Ho Chi Minh City, the Parkson Paragon was closed in May 2016, just five years into a 19-year lease.

But those closings did little to stop the bleeding, as Parkson Retail Asia’s third-quarter net loss for the three months ended March 31, 2017 deepened 24.4% to US$6.4 million.

Same-store sales declined across Indonesia, Malaysia, Myanmar and Vietnam for the third quarter and were particularly damaged by an ever-increasing crowded retail scene in Vietnam, said a company representative.

So, within the past two years, Parkson Vietnam had closed three stores and it now appears the remaining seven stores in the Southeast Asian country (five in HCM City, one in Hai Phong, and one in Danang) are on the chopping block.

The Malaysian department store operator first arrived in Vietnam in 2005, opening in Saigon Tourist Plaza in Ho Chi Minh City and quickly positioned itself in the middle market.

Parkson had expected to dominate the retail market in Vietnam. In fact, it brought many international brands to Vietnam such Porsche Design, Sub Jeans, and was considered a shopping icon in the city.

However, its appeal quickly faded as other retail giants from Japan and the Republic of Korea set up shop in the market.

Metro Group is another who walked away from its investment in Vietnam selling out its entire 19 wholesale Cash & Carry business in Vietnam and related real estate portfolio to Thailand-based TCC in January last year.

Other retailers have made their exodus from the overcrowded retail market in Vietnam including the French Casino Group, Best Carings, Wonderbuy, HomeOne and Sapomart, to name only a few.

VOV