Modern Times Trendy Consumers Hobby Shops
June 5th, 2008, 4:32 pm Hobbies And Interests
Among the array of customers with shopping carts loaded with fruits, vegetables, and other goods at the newly-opened wholesale Metro Supermarket in Hanoi capital, 34-year-old office clerk Nguyen Thu Ha stands out in her trendy Elle silk dress selecting fresh seafood for an upcoming family party.
“Every weekend, I go shopping, but it is not only for making purchases but also a kind of hobby,†Ha said.
“Eye-catching accessories consume much of my money.â€
The rising purchasing power of Vietnamese people on the heel of the country’s strong economic development has led to a retail market boom in recent years.
Supermarkets and shops – from upscale department stores where luxurious imports are sold to street-side shops that vend locally-made items – are mushrooming across the bustling capital city.
In addition to local businesses, foreign retailers, including Espace Bourbon Group, Parkson, and Metro Cash and Carry, have quickly penetrated the fertile market.
Sales of personal-care and household products have seen the highest growth since 2000, according to a recent report by international auditing consultation company KPMG.
Clothing, footwear, cosmetics and perfume sales have seen annual growths of 11-14 percent in volume, while the corresponding figure for pharmaceuticals is 13 percent.
The retail market’s annual growth ranged from 18-23 percent in the 2003-2007 period, according to the Association of Vietnamese Retailers.
In 2007 alone, market revenues stood at VND740 trillion (US$46.3 billion), marking a year-on-year increase of 23 percent.
Vietnam, which currently hosts 140 supermarkets and 20 trade centers, is the world’s fourth most attractive retail market after India, Russia and China, according to the World Bank.
The country’s per capita income has increased to $715 in late 2007 from $260 in 1995, and the proportion of poor people is now one-third of that a decade ago Hobbies And Interests, the World Bank said recently.
Locals nowadays spend around 70 percent of their monthly income on consumer goods and services.
New generation, fresh choices
The coming of age of the young population, many of whom can earn more money compared to the previous generation, contributes to rising spending habits boosting the retail market.
Many young shopaholics who work for foreign-invested firms or large state-owned groups splurge on luxurious imported scooters, mobile phones, laptops, clothes and cosmetics – accessories and items that flaunt personality and individuality.
“I often spend most of my salary on clothes, footwear, and cosmetics – objects one uses to show one’s tastes and style,†said Nguyen Do Quyen,Hobbies And Interests an employee of the Hanoi-based Bank for Foreign Trade of Vietnam.
Branding a sleek Nokia N72 cell phone in hand, Quyen hopped off
her red Italian-made Piaggio scooter to enter a clothing shop in crowded Vincom Tower, where Gucci shoes, Louis Vuitton handbags and Tissot watches cater to the whims of the domestic upper-class.
Together with affluent local consumers, the rising number of foreign visitors to Vietnam is believed to bolster the development of the country’s retail market.
With high consumption demand, many large foreign retailers are concentrating on expanding their chain shops in Vietnam.
Others like Wal-Mart, Dairy Farm, Tesco, and Carrefour are expediting plans for market entry.
Competition is expected to grow more intense on the horizon, especially starting in January 2009 when investors can establish wholly foreign-owned retailers in the country, according to local experts.
The anticipated rise in foreign competition, however, will pose challenges to local retail firms, many of which are weak in terms of running operations, managing finances and creating long-term strategies.
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