Economic alliances key to attracting global retail
Economic alliances key to attracting global retail
Domestic economic alliances would be the main factor in improving the flow of international revenues into Viet Nam, Theodore Knipfing, head of retail services at Cushman & Wakefield Asia Pacific, has said.
Speaking to the media about Viet Nam's retail market during a business trip to HCM City last week, he said the collaboration between domestic retailers, property developers, consumers, and policymakers would be the main factor rather than trade deals like the Trans-Pacific Partnership.
"A lot of people are excited about TPP. But I think people may be disappointed if they expect some massive change overnight in the numbers of revenue or the influx of foreign retailers.
"The biggest benefit of TPP is just the mindset, that it will bring some trade."
There needed to be a growth or a continued maturation of the market itself, not just purely in economic terms but in terms of people's habits and the way people shopped.
"The vast majority of people in Viet Nam are not used to shopping malls yet, so I think the message is that yes TPP will help a lot but a lot of things have to change, not purely trade, with restrictions being lifted; it is the way people live, the way people shop, that has to also change in hand with the economic improvements.
"Many things all coming together will cause the retail market to mature."
They included the rise in salaries, middle class, malls, and travelling, and the removal of trade restrictions.
Another thing that international retailers typically looked for to enter a market was strong anchor tenants in malls who would bring people to the mall consistently every day.
"Co.op Mart and Highland Coffee are big ones."
Retailers would look at the entire region, for example Thailand and Cambodia and Viet Nam, more as a unified region and where they could put more resources and investments.
For example, if they could ship goods between these countries with little or no duty or taxes, it would allow them to achieve more efficiency.
Retailers would have products in one country and it was much cheaper to be shifting those products around close countries rather than shipping all the way from Europe or US.
Retailers had to look at things globally, and allocate their resources in the best possible way.
"So a country may have amazing growth or very healthy retail, but if it's very small or smaller than big countries like Indonesia or India or China, the priority suffers."
He cited the example of H&M and ZARA, saying they often liked to be together in a mall because this attracted more people to the mall.
International retailers were very interested in ASEAN, especially Myanmar, Cambodia and Viet Nam, with Viet Nam exciting the maximum interest for its market .
