By Quoc Hung - The Saigon Times Daily
HCMC – Local retailers are experiencing a tough time as statistics show that the distribution and retail sector saw the most enterprises go bust in the first quarter.
HCMC is evaluated as a market with strong purchasing power. Still, enterprises in the city are now facing a dreary business situation.
Discounts and sell-offs
Multiple shops along the fashion streets such as Hai Ba Trung, Le Van Sy and Nguyen Trai are offering discounts of up to 50-70%. The similar situation occurs at the city-based shopping malls like Parkson, Crescent Mall and Now Zone.
Despite the many promotion programs to stimulate consumption, visitors to commercial centers are sparse.
Even at the peak of the summer sales, Vietnam Fashion Co., known for the brands Ninomaxx and Maxxstyle, is offering an 80% discount to sell off products and fold up some outlets.
Meanwhile, in the Vinatex Mart supermarket system, multiple fashion brands are providing discounts to lure customers.
Nguyen Thanh Nhan, deputy general director of Co.opMart supermarket chain, said clothing products recorded the lowest consumption compared to other items sold at Co.opMart although many enterprises had applied promotion programs.
He explained consumers now tighten their purse strings for essential goods given the economic hardship, causing great difficulty for fashion retailers, with many of them having dissolved.
Electronic appliance retailers are also struggling with shrinking demand. Almost all home appliance shopping centers have launched promotion programs since the year’s beginning, but the market has not improved much.
Leaving the playground
Analysts indicated that consumers are cutting expenditures due to the economic woes and high inflation, sending retail shops and supermarkets into the tailspin.
As a result, the retail market is witnessing departures of many brand names. Experts said this is a challenging time for retailers, and those lack competence and experience will be eliminated.
The fact that Nhat Nam Joint Stock Company has recently closed Fivimart Phu My Hung, its final supermarket in HCMC, attracts wide public attention as this retailer is still developing well in the northern market.
Vu Thi Hau, deputy general director of Nhat Nam, turned down the rumor that her company was going bankrupt, explaining the supermarket was closed because the land rent term had expired. Still, she admitted doing business in HCMC is far from simple give the rigorous competition here.
Prior to Fivimart, Satra Bau Cat supermarket operated by Saigon Trading Group was closed in November last year due to sales slump.
In addition, many small-scale home appliance centers have switched to other business fields. Even the large electronic appliance retailer like Best Carings in District 7 has also folded up business, following the bankruptcy of WonderBuy and closing of Loc Le and Vietnamshop.com.