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Plazas plunge prices to woo the masses

Update: December, 12/2012 - 15:33

 

Out of reach: There's an abundance of high-quality Parkson goods such as clothes and bags but customers are rarely seen these days. — VNS Photo Truong Vi
Shut up shop: Many kiosks in Hang Da Trade Centre have to close their doors due to having no buyers. — VNS Photo Doan Tung
Appetite for change: Many people in HCM City are now interested in high-quality items such as garments, shoes and farm products produced by local enterprises due to their affordable prices compared to the imported ones. — VNS Photo Manh Linh
 
The preserve of the wealthy during the boom years, high-end shopping centres have been crippled by the recession and are now seeking alternative ways to bring back the crowds. Ha Nguyen reports.

Economies continue slowing down globally, forcing many high-grade trade and plaza centres to reduce prices or sell popular goods to attract customers and balance their turnover.

In the past several years, these centres were a good place for the rich to buy high-quality luxury goods imported from European countries, and the US.

But even the rich face financial difficulties, and have tightened their belts to save money.

To deal with the problem, many trade centres and high-ranking supper markets have to change the goods they offer to attract different classes of people.

Grand Plaza recently announced a new business strategy after two years of poor sales.

The plaza once considered a luxury shopping paradise now has a supermarket selling fresh food. It also promotes sales and organises fashion programmes to lure customers, according to the website Vef.vn.

The web said the centre has recently announced it will give retail partners unprecedented perks such as rent free of charge for the first six months of their lease.

Hoang Duc Anh, director of the centre, admitted that despite being A grade, the centre has to lease its shops and offices for B grade prices (from US$30-50 sq.m per month).

Like the Grand Plaza, the Indochina Plaza Ha Noi on Xuan Thuy Road in Ha Noi's Cau Giay Ward is a high-grade centre located in a prime location. But economic difficulties have forced the centre to use its main rooms near the front entrance for food and confectionery stalls instead of displaying high-grade fashion, shoes, bags and foreign-imported clothes as usual.

The website also said that centre leaders prioritize the number of visitors to the centre, rather than business results.

To ensure thousands of visitors and customers, the centre has defined itself as a centre for social activities, festivities and entertainment. It provides customers with free wifi and screens world-famous sports programmes on big TVs all day.

Pico Mall, which is also located at a very convenient place (Nga Tu So intersection of Ha Noi's Dong Da District) faces the same problem as its counterparts - but may be in an even worse situation. The mall has few customers and visitors compared with the above trade centres.

The website said very few people come to buy things, but many enjoy the place.

Nguyen Hoang Anh, a government employee, said she and her staff often visit the mall to relax during their afternoon break.

"Cosmetics here are so expensive we couldn't afford them. Many of our office mates do not dare to buy imported luxury goods," said Anh, adding that she rarely sees customers visit the stalls on the second floor that showcase Adidas and Bata-brand shoes despite frequent sales where prices are cut between 20 and 50 per cent.

Hoang Thi Ngoc, an owner of a small tea shop located near the mall, said the mall gives area residents an airy space to do exercises in the morning and relax in the evening.

Hang Da Market Trading Centre in downtown Ha Noi, although not as high-end as the others, also saw gloomy results after rebuilding.

Ha Thu Hong, an owner of a clothing kiosk at the centre, said since the centre's rebuilding was completed two years ago, many traders had to give up business here to lease a place on the street because very few customers came in, as parking in the new garage was far more inconvenient than parking on the street.

Hong said her second hand clothes did not sell as well as before, even though she offers sales of up to 50 per cent.

"I have to work all day but earn only VND4 million ($195) or less monthly. My son is now looking for places for me to move my business," Hong said.

Vu Danh Hoa, general director of the market centre, makeship markets around the centre also bring about such difficulties.

"Our food, vegetable and fruit sellers are unable to find customers," Hoa said.

 

Aisles are empty: Despite big sales the Phu Tho Co-op super market in HCM City attract few customers. VNA/VNS Photo Thanh Vu
 

Phi Ngoc Doan, chairman of Cua Dong Ward, said the traditional habits of local people are still unchanged. They like to buy things near their house or stop their motorbike along the road to buy things.

"My wife often buys things at a mobile market in front of my house. We rarely have time to go to the trade centre or supermarket. The economy is slowing down so we have to continue to tighten our belt to save money," said Doan.

Although she works for a foreign-invested company, Ho Hoang An in Ha Noi's Dong Da District said she has to try to save money by not going to the spa or shopping as often as before because her company has also been threatened by the economic crisis.

"My friends and I now often look for sales in supermarkets and cut down our spending on luxury clothing and bags," she said, adding that by doing this, she has saved a lot of money.

An said many of her friends have had to change their habits and ways of living to deal with increasing prices.

Architect Nguyen Minh Tuan from the Institute of Rural and Urban Planning said Ha Noi should develop supermarkets, trade centres and traditional markets simultaneously to ensure effective business.

"Maintaining traditional markets is good for both economic development and keeping tradition alive," said Tuan.

Richard Leech, Executive director of CBRE Viet Nam, said despite all these problems, the number of trade and plaza centres will double next year. But the new centres will face fierce competition while people still continue to tighten their belts.

He added that the trend of popularising trade and plaza centres is only a temporary solution. If the situation continues, these centres will lose their image and will not be able to attract high-ranking customers.

According to a survey by AC Nielsen, a market research company, Vietnamese consumers valued sale goods more than others in the the Asia-Pacific region. About 56 per cent said they usually hunt for sale goods compared with 38 per cent in the region.

However, to deal with the economic downturn and take advantage of big sales from trade and plaza centres, Vietnamese customers are increasingly ignoring luxury items.

For example, cosmetic and fashion shops at Kumho Asiana in HCM City are now being replaced by restaurants and cafes.

Tran Ngoc Dung, director of the FTA, a Market Research LtdCo, said in a report that customers surveyed directly in Ha Noi, HCM City and Da Nang reported having to cut spending at trade and plaza centres and move to buying things in traditional markets.

About 71 per cent of Vietnamese would like to use Vietnamese goods while 42 per cent wish to buy high-quality Vietnamese items, according to the report, and 84 per cent of customers are significantly concerned about food safety. Many customers also pay attention to the goods' origin and brand.

Eighty per cent of urban people use the internet, mostly to buy things online, and 90 per cent of middle-aged women manage their family finances.

These women's biggest concerns are their families, their health and their work, and women aged 45-55 do charity work more than others, the report has found.

Green consumption is also increasing, illustrated by the fact that 89 per cent of Hanoians are enthusiastic about environmental protection activities and 72 per cent of consumers in HCM City pay special attention to doing production without affecting the environment.

The report also mentioned consumer strategies for the country's biggest traditional holiday, Tet: keep it simple, save money and relax.

These trends would continue through the next two years, Dung predicted.

Despite all these issues, thousands of customers were jostling to buy TVs, refrigerators, air conditioners and many others at branches of the Nguyen Kim shopping network throughout the nation.

"I had to wake up very early in the morning to wait for Nguyen Kim Centre on Trang Tien Street to buy a refrigerator and a LED TV because prices were cut in half," said Bui Trong Hai in Hai Ba Trung District.

Le Pham Anh Thy, marketing director of Nguyen Kim, said his centre has implemented the biggest direct sales to customers since 2004, attracting thousands of customers within two weeks. — VNS

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