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Retail space exodus continues in Ho Chi Minh City

Retail space exodus continues in Ho Chi Minh City

Monday, July 01, 2024, 13:24 GMT+7
Retail space exodus continues in Ho Chi Minh City
A location has been a canvas for advertising and graffiti for many years in District 1, Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

The wave of businesses vacating retail spaces persists in Ho Chi Minh City due to various economic challenges, leaving numerous prime areas overrun by motorbike taxi drivers or marred by graffiti and advertisements.

On Le Van Sy Street, which connects District 3 and Phu Nhuan District and hosts hundreds of clothing businesses, a noticeable trend of closure and relocation is evident among the stores. 

Amidst the active storefronts, several have recently shut down or relocated. 

In some instances, clusters of three to four stores have ceased operations simultaneously, while entire rows of larger premises have vacated street corners. 

Motorbike taxi drivers rest under the porch of a vacant retail premises on Le Van Sy Street in District 3, Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

Motorbike taxi drivers rest under the porch of a vacant retail premises on Le Van Sy Street in District 3, Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

Many of the remaining stores display signs advertising clearance sales as they prepare to close down and return the rented premises to their proprietors. 

Currently, more than 20 storefronts along this thoroughfare are available for rent.

A vibrant marketplace emerges for street vendors in front of a vacant retail premises on Hai Ba Trung Street in District 3, Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

A vibrant marketplace emerges for street vendors in front of a vacant retail premises on Hai Ba Trung Street in District 3, Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

Nguyen Van Thuan, the owner of a fashion store on Le Van Sy Street, recounted opening his shop in 2019 and perseverance through the COVID-19 pandemic. 

In 2023 and early this year, a sharp decline in purchasing power resulted in a loss of revenue, making it impossible to cover rent and staff costs.

Consequently, Thuan made the difficult decision to temporarily close his business and return the premises, opting to wait for more favorable economic conditions before considering reopening. 

‘For rent’ signs are seen at a vacant retail premises in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

‘For rent’ signs are seen at vacant retail premises in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

Similarly, many stores that once thrived with fashion, cosmetics, or food and drink retail along Nguyen Trai Street in District 5 and District 1, and Hai Ba Trung Street in District 3 and District 1, now stand unoccupied.

Even prominent streets like Le Loi Boulevard in District 1 remain vacant, serving as resting spots for motorbike taxi drivers or locations for vandalism and advertisements.

Stores lining Le Loi Boulevard in District 1, Ho Chi Minh City become canvases for graffiti after remaining unoccupied for many years. Photo: Ngoc Hien / Tuoi Tre

Stores lining Le Loi Boulevard in District 1, Ho Chi Minh City become canvases for graffiti after remaining unoccupied for many years. Photo: Ngoc Hien / Tuoi Tre

Nguyen Phuoc Hung, permanent vice-president of the Ho Chi Minh City Union of Business Associations (HUBA), attributed the trend of vacant retail spaces to the closure of several stores by large retail brands such as The Gioi Di Dong (Mobile World) and FPT, while smaller shops and restaurants face sluggish sales amid myriad challenges.

According to HUBA, the substantial rise in inexpensive consumer goods from China has placed considerable pressure on Vietnamese businesses. 

A fashion store posts a sign announcing their plan to vacate their rented retail space and product sale until June 30, 2024 in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

A fashion store posts a sign announcing their plan to vacate their rented retail space and product sale until June 30, 2024 in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

The unregulated trend of online advertising and sales, particularly live-streaming, is viewed as a threat that suffocates the survival opportunities for small manufacturers, disrupts traditional pricing standards, complicates quality assurance, and results in widespread tax evasion.

HUBA reports significant declines in purchasing power within the commercial and retail sectors, with certain industries experiencing decreases of up to 60 percent. 

It forecasts further declines of 10 percent in the coming months.

The interior of a karaoke shop is covered in dust in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

The interior of a karaoke shop is covered in dust in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

‘For rent’ signs are seen at a vacant retail premises on Nguyen Trai Street in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

‘For rent’ signs are seen at vacant retail premises on Nguyen Trai Street in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

A closed supermarket on a street corner has it front side and surrounding sidewalk transformed into a gathering place for scrap dealers, as well as a spot for motorbike taxi drivers to take their lunch breaks in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

A closed supermarket on a street corner has it front side and surrounding sidewalk transformed into a gathering place for scrap dealers, as well as a spot for motorbike taxi drivers to take their lunch breaks in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

A large house that once hosted entertainment services for young people is now vacant, adorned with multiple ‘For rent’ signs in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

A large house that once hosted entertainment services for young people is now vacant, adorned with multiple ‘For rent’ signs in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

Amidst closed stores, a new shop undergoes renovation to enter the challenging market in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

Amidst closed stores, a new shop undergoes renovation to enter the challenging market in downtown Ho Chi Minh City. Photo: Ngoc Hien / Tuoi Tre

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