The race for retailing premises becomes blazing hot

Vietnamese retailers do not have many more days to get prepared for the opening of the retail market, slated for January 1, 2009, for they have to speed up to scramble for advantageous positions for retailing premises before it is too late.

Fighting over retailing premises

Retailers have all heard about the fight to get the right to develop the business premises at No. 168 Nguyen Dinh Chieu Street in district 3, HCM City, conducted by Saigon Co-op.

The land plot was the asset of the bankrupted Epco-Minh Phung Group, which was seized under a court’s verdict and being put under the management of Vietcombank HCM City branch.


Vietcombank has been leasing to Saigon Co-op for the retailer’s supermart for the last eight years. Now Vietcombank plans to appraise the value of the asset and sell the land plot by auction. However, the land appraisal and auctioning have raised arguments, especially about the prices.

Nguyen Thi Hanh, General Director of Saigon Co-op, has confirmed the determination to get the land plot. Hanh said that Saigon Co-op needs the business premises to serve its strategy on expanding the retail network. Besides, Saigon Co-op has spent a lot of money to build and develop Saigon Co-op supemart on the land plot, therefore, it will not lose the well known retailing point.

Not only has Saigon Co-op been trying to expand in retail, but other retailers have also been trying their best to expand the distribution networks and book the most beautiful positions in cities and towns for retailing premises. Parkson, for example, after firmly positioning themselves in HCM City, is marching towards the north and choosing two advantageous positions in Hai Phong City and Hanoi which have the total area of 35,000 sq m.

Vien Thong A, specializing in mobile phones and laptops, have also continuously been launching new distribution points. Vien Thong A has opened nerly 30 supermarts and is planning to have 40 supermarts by the end of the year.

A General Director of a supemart chain, who asked to remain anonymous, said that the money injected in supermarts now will not bring money promptly. However, retailers still need to ‘book’ advantageous positions, which will bring money later on.

The director said that if retailers only decide to make investments when the purchasing power increases, they will not have opportunities because all the best positions will be fully occupied.

Meanwhile, according to him, the most important thing for retailers is to have the best and beautiful premises. This is also the thing which local distributors use to compete with foreign retailers, who have big money and good experience.

Shaking hands with real estate developers

In order to shorten the investment time, retailers now tend to join forces with real estate developers.

Saigon Co-op Investment and Development Company (SCID) and Building Materials and Construction Company (BMC) have been joining forces to develop the trade and service centre and Co-op supermart at the building invested and built by BMC.

Under the agreement signed between the two sides, Saigon Co-op uses the premises at the projects carried out by BMC to open supemarts. The first supermart, established under the agreement, was Coop Mart BMC, set up in mid-2006 in Phu Tho Hoa ward in Tan Phu district, HCM City.

Nguyen Van Ngoc, General Director of BMC, said the cooperation with retailers can bring more facilities to people while helping make it more attractive for real estate projects. Meanwhile, Nguyen Ngoc Hoa, Chairman of Saigon Co-op, said that the cooperation with real estate developers allows retailers to develop the distribution networks rapidly and with low investment costs.

Source: Tuoi tre