The Great Retail Reset: Navigating the Ongoing Wave of Store Closures.

For months now, numerous stores in bustling streets and famous shopping centers in Hanoi, despite being located in prime locations, have been unable to find tenants and have been left vacant. Many of these once-popular commercial areas now display “for rent” signs, with business owners struggling to keep up with the challenging economic climate.

Along Ton Duc Thang Street in Hanoi, our reporters counted approximately 20 empty storefronts with “for rent” signs. Nearby areas like Giang Vo, Kim Ma, Tay Son, and Nguyen Luong Bang, as well as popular shopping districts such as Ba Trieu, Pho Hue, Pham Ngoc Thach, Chua Boc, and the Old Quarter, are facing a similar situation with vacant properties waiting for tenants.

Residents of Hang Ngang Street shared that a 6-meter wide storefront, which used to command a high rental price, has been vacant since the COVID-19 pandemic began. Despite a significant reduction in rent, the owner has been unable to find a new tenant for several months.

Mrs. To Quynh Trang, a landlord on Hang Ga Street, located in the heart of the Old Quarter, expressed her frustration at the difficulty in renting out her 2-story, 90-square-meter property. The monthly rent for the entire property is 80 million VND, a rate that has remained unchanged for the past 5 years. Mrs. Trang has been trying to find a tenant through brokers and direct advertising to no avail. She is now considering dividing the space into smaller units to make it more affordable and attractive to potential tenants.

This dreary scenario is not limited to street-front stores but also extends to famous shopping centers in Hanoi. Numerous stalls and kiosks lie vacant, with only a handful of visitors wandering around. Some floors are almost deserted, with nearly half of the spaces unoccupied.

Ms. Van Anh, a salesperson at a shopping center in Cau Giay, Hanoi, shared her experience: “On regular days, there are very few customers, and even fewer make purchases. The ‘coming soon’ signs on vacant stalls have been there for over a year, but they are just standard designs by the mall management. In reality, these spaces remain unoccupied because the rent is too high for most businesses to afford.”

Our investigation revealed that the majority of these vacant spaces were previously used as clothing and accessory stores, with a smaller portion dedicated to food and beverage outlets. These sectors have witnessed a significant shift in consumer behavior, with more people opting for online shopping and services.

Ms. Phuong Anh, an office worker in Tay Ho, Hanoi, shared her surprise at reaching the diamond membership level on an online shopping platform within just six months. In the first ten days of July alone, she placed 13 orders totaling 2.5 million VND for food, fashion, and cosmetic products.

A survey on consumer habits in Vietnam conducted by PwC in 2023 supports this trend, indicating that online shopping remains the preferred choice for consumers. A significant 64% of respondents plan to increase their online shopping frequency.

In contrast to the gloominess of once-bustling commercial streets, e-commerce platforms are thriving. According to predictions by Metric, a data platform, the combined revenue of the top five e-commerce platforms in Vietnam (including Shopee, Lazada, Tiki, Sendo, and Tiktokshop) is expected to reach approximately 85 trillion VND in the second quarter of 2024.