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Vietnam: Outlet stores – solution to weakening consumption
Outlet stores have been present in Hà Nội City since 2012 but their business was not so profitable because of low product diversity.
HÀ NỘI — Experts believe outlet stores would provide an effective solution to the problem of lukewarm consumption demand as they encourage consumers to spend more on deeply-discounted products.
Lê Việt Nga, deputy director of the Domestic Market Department, Ministry of Industry and Trade, revealed that the department was working on a plan to promote outlet stores in Việt Nam.
“The proliferation of outlet stores would boost the consumption of products in the textiles, footwear, and other industries,” said Nga.
According to Nga, outlet stores first appeared in the US in the 1930s to offer damaged products to employees at low prices. This win-win concept was so successful that it has quickly become prominent with over 15,000 stores nationwide.
Outlet stores have been present in Hà Nội since 2012 but their business was not so profitable because of low product diversity. Some stores, owing to their misconception, went as far as to being used as a dumping ground for their low-quality products, alienating Vietnamese consumers.
But the situation is different now. Outlet stores in the country have improved to win back consumers and become a go-to destination for those in search of bargains amid the recession.
Commercial expert Vũ Vinh Phú underlined the need for new outlet stores in the country and highlighted four factors essential for the success of those outlet stores, which are convergence, professionalism, connectivity, and governance.
Convergence means the clustering of hundreds of stores of different brands in a single outlet mall to increase focus and coherence. Convergence holds the key to their success because it improves diversity and sourcing efficiency.
Professionalism denotes a way of dealing with customers in accordance with certain normative values. A respective attitude and high standards of service always go a long way with better sales of products.
Connectivity signifies the proximity to tourism destinations, entertainment centres, and transport hubs. By edging closer to those commercial magnets, outlet malls become better positioned to attract tourists and visitors.
Governance underlines the importance of a code of conduct for firms’ employees and a set of standards for their products. Those values can help safeguard producers and consumers against illegal and unethical actions, and improve their credibility.
Other experts held that outlet stores have been the driving force behind the growth of tourism in many countries as they attract hundreds of thousands of tourists looking for bargains during the shopping season.
They reduce an important financial loss for manufacturers and give consumers access to quality products at 30 to 70 per cent discounts. As such, the stores can be employed as a measure to stimulate consumption.
Hà Nội was considering a plan in February to set aside 811ha of land for the construction of new outlet malls. The move was expected to bolster commercial activities in the city given two economic drivers, public investment and exports, are declining. — VNS