A common sight in high-rise apartment buildings and office towers in major cities is the busy shipper on the sidewalk, surrounded by neatly stacked packages as their phone rings off the hook with customer calls.
With lightning-fast delivery, shopping platforms like Shopee cater to every need, from household goods and electronics to luxury items. With just a few taps on the screen, residents can acquire goods without stepping out onto the street. This convenience has not only changed consumer habits but also shaken up the traditional retail industry.
While online pickup points buzz with activity, many street-level stores suffer from a lack of customers. Once hailed as “money-printing machines,” just 5-7 years ago, shophouses and street-front shops were symbols of prosperity. Today, however, many of these properties, valued at millions of dollars, bring in a mere few thousand dollars a month in rent, if they are rented out at all.
Once bustling shopping streets are now quiet, with many storefronts being returned to their owners. In Hanoi and Ho Chi Minh City, the number of vacant retail spaces is on the rise. Over the past two years, downtown streets in Ho Chi Minh City have been a stark illustration of this trend: prime real estate left abandoned and dilapidated, with faded signs and locked doors. Hanoi is no exception, with once-thriving areas now struggling to find tenants.
It’s not just shophouses that are affected. Older shopping malls like Artemis and Discovery Complex are facing similar challenges. Artemis has an occupancy rate of only about 45%, while Discovery Complex has a staggering 80% of its retail space vacant. Once bustling spaces are now gathering dust, with elevators out of operation and shops closed for extended periods.
Ms. Nguyen Hoai An, Senior Director of CBRE Hanoi, points out that these malls often have outdated designs, lack renovation, and fail to meet customers’ new experience expectations.
Hanoi’s shopping malls are quiet and deserted.
However, not all retail models are facing the same fate. Malls like Lotte, Aeon, and Vincom Royal City, as well as newer mall projects, remain resilient and even thrive despite the pressure from the online wave. Unlike small-scale shophouses with outdated designs and a lack of parking, these malls not only offer shopping but also entertainment, dining, and unique experiences.
Many residents share that they prefer to spend their weekends at these malls, where their children can play, and they can relax at a café, making these spaces multi-purpose and attractive to all ages, thus maintaining high foot traffic.
Furthermore, large malls can meet the stringent standards that shophouses struggle to achieve. Ms. Tu Thi Hong An, Senior Director of Savills Ho Chi Minh City, emphasizes that big brands require not only prime locations but also transparent legal frameworks, good construction quality, and compatibility with modern business models. Additionally, flexible rental policies are another advantage that malls can offer.
Ms. Hoang Nguyet Minh, Senior Director of Savills Hanoi, points out that shophouses often charge high rents and require long-term payments of 6 months to a year, creating financial pressure for businesses. In contrast, large malls are open to negotiations and even offer revenue-sharing models, which help brands optimize their capital. This is particularly appealing to F&B brands, which are increasingly moving from street-front shops to malls to improve their business performance.
Mr. David Jackson, CEO of Avison Young Vietnam, advises that to survive, malls need to invest in service management, event organization, and entertainment amenities. This foreign expert also emphasizes, “The key lies in understanding the target audience and rebranding to stay competitive.”
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