Due to the national lockdown and ongoing social distancing in response to COVID-19, department stores experienced a strong decline in current value sales in 2021. During the lockdown which began in June, the channel was deemed non-essential and therefore subject to mandatory closure.
Before the pandemic, with the growing influence of Western culture bolstered by increasing exposure via the internet, rising numbers of Vietnamese consumers were choosing to spend their leisure time on family gatherings and get-togethers with friends at one-stop locations offering shopping, foodservice, films and games. Major department stores have increasingly targeted this experience-orientated demand in order to counter growing competition from rival retail formats such as hypermarkets.
AEON Vietnam strengthened its already dominant position in department stores in 2021. The company’s success has been founded on locating its stores in very crowded residential areas and focusing on mid-range products in order to appeal to the mass market.
In 2022, department stores is expected to return to growth, though it could be the end of 2023 before value sales again reach pre-pandemic levels. The channel’s performance is likely to keep being hampered by the limited inflow of tourists compared to the review period, while Vietnamese’ purchasing power will remain reduced until most of the population is vaccinated from the virus and related financial uncertainty fades.
As more of the Vietnamese return to shopping for non-grocery items in physical outlets, department stores’ capacity to take advantage of the previously growing role of shopping as a leisure experience will be enhanced by the fact that almost all department stores are located in shopping centres, which further diversifies the leisure-orientated offer. Strong collaboration between department stores and shopping centres is a win-win strategy that helps to increase traffic flow for both partners.
E-commerce offers lower risk of COVID-19 transmission compared with brick-and-mortar stores, convenience and a diverse product range at affordable prices. This competition is having a significant influence on the development of department stores in many markets around the world, but it is having a relatively minor impact on the channel in Vietnam, especially given the significant contribution to sales from international visitors to the country.
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Understand the latest market trends and future growth opportunities for the Department Stores industry in Vietnam with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Department stores are chained or independent retail outlets that usually exceed 2,500 sq metres of selling space, are typically in high-street or shopping mall locations, and have a primary focus on selling a range of non-food/drink/tobacco merchandise across several categories in different departments. Department stores usually have a mid-to-upper price positioning. Example brands include Macy’s, Marks & Spencer, and Takashimaya.See All of Our Definitions
This report originates from Passport, our Department Stores research and analysis database.
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