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News Release

Vietnam

SHOP TILL YOU DROP – ASIA YOUNGEST SHOPPERS

By Greg Ohan, Director, Vietnam at JLL


The question I have been asked recently by investors (both local and foreign alike) is why multinational retailers increasingly now more than ever, are piling themselves into what some observers are (For better or for worse) referring to as the 'next China'? The answer …People & Policy.

Arriving to Vietnam in 2010, I was lured by the attraction that alas, here was a country with only a handful of department stores, no McDonalds, Starbucks, Zara or even a Zara.  However, in a short space of time how things have changed.

Since the 1980's, we have witnessed Vietnam liberalize its economy. From the launch of doi moi (or "renovation"), President Clinton lifting the US trade embargo in 1994, joining the World Trade Organization (WTO) in 2007 and more recently the 2015 the Trans Pacific Partnership (TPP), Vietnam has been on a progressive path to development and improved globalization.

On the numbers alone, our population has grown rapidly from 66 million in 1990 to 91 million in 2016 making us the third most populous country in Southeast Asia after Indonesia and the Philippines. Over the next two decades, we will be entering a demographic golden age. Twenty-five per cent of our population aged between 10 and 24; the median age at around 30; topped with the fastest growing Middle Income and Affluent Class in the South East Asia region. Finally, the 'cousin' that was once considered too challenging, immature and lacking appropriate investment policies to attract foreign retailers is now more 'the poor cousin'.

So what does this all mean for Vietnam, the nation of Asia's youngest shoppers? Put simply, Choice and more of it. From new retailers to new malls to house those retailers, shop till you drop people.

As an expat, when I first arrived in Ho Chi Minh City, if I was looking for a jar of Nutella or even a box of Cornflakes goodluck. I would need to visit one of the original three "dragon ladies" on Ham Nghi Street. For my friends up North in Hanoi, the struggle to find these personal favorites was far greater and in many cases fruitless. However, I am pleased to announce, things have changed… and I would argue that it is for the better rather than worse.

Foreign retailers are actively expanding their retail chains, and new brands originating from our neighbors are diving into both Ho Chi Minh City and Hanoi's retail property markets. The Thai's through 'Central Group', South Korean's through 'Lotte'; 'EMart' and Japanese through 'Aeon Mall'; 'Takashimaya' and not to forget Ho Chi Minh City's latest shopping experience 'Saigon Centre' brought to you by the Singaporean's. Rising disposal incomes are also bringing in big fashion brands such as Gap, Mango Topshop and now Zara which are all competing for your Dong.

Time will tell if our young nation of shoppers will weather the 'Shop til you drop' storm –but at least on paper, demographics and a more foreign friendly investment environment will keep our nation holding on to the shopping basket for the time being.