Malaysia’s Parkson is apparently shutting down its fifth mall in Vietnam after suffering serious losses in recent years.
Although the company has not made any official announcement, its name-board has been taken down from the Cantavil An Phu builing in Ho Chi Minh City’s District 2.
If it shuts down, it would be the second outlet in HCMC that the company is downing the shutters on this year, following Parkson Flemington in District 11, and would bring the number of Parkson stores in Vietnam down to five, of which three are in HCMC, one in northern Hai Phong City and one in central Da Nang City.
Previously, the firm had shut down its two outlets in Hanoi.
Parkson, the first international mall to open in HCMC, has been reporting losses in recent years. Among its four markets – Malaysia, Indonesia, Myanmar and Vietnam, the last mentioned has been the worst performer in the fourth quarter of the fiscal year ending June 30, according to a report by Parkson Retail Asia.
Vietnam had a negative growth of -14.6 percent in the fourth quarter and -8.3 percent in the fiscal year ending June 30 this year, it said.
“The operating environment in Vietnam remains challenging amidst a crowded retail scene, wherein intensive promotional activities had to be carried out to capture sales,” the report said.
Vu Vinh Phu, former chairman of the Hanoi Supermarket Association, said that Parkson was able to operate well when it first came to Vietnam more than 10 years ago as the number of competing malls then in the country was low.
But market has become much more competitive now, with many new malls offering more than just a shopping experience, making them a place for entertainment and food, Phu told local media.
Even though Parkson is one of the earliest comers, without a change in strategy, it will have to leave Vietnam sooner or later, he added.
Parkson, a premium retail group from Malaysia, entered Vietnam in 2005 and developed a premium shopping mall chain in the big cities of HCMC, Hanoi, Hai Phong and Da Nang.
It was touted as one of the highest-potential players in the retail market, planning to open 2-3 malls a year in Vietnam’s big cities.
The entrance of other foreign companies like Thailand’s Central Group, South Korea’s Lotte and Japan’s Aeon as well as Vietnamese firms like Vingroup, Bitexco and Sun Group has changed things.
Japanese retailer Aeon owns a mall in Hanoi’s Long Bien District and has another one in Ha Dong District under construction. It is planning other malls in Hai Phong and HCMC.
Vietnam’s Sun Group opened the Sun Plaza mall in April and is building another one in Hanoi.
Vietnam was one of 30 countries with the most vibrant retail market in the world, with retail sales of $129 billion last year, an 11 percent growth over the previous year, according to the Ministry of Industry and Trade.