Malls Invade The Greater Mekong Subregion

Proudly contributed by Luc Citrinot

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While Thailand was and is considered as a mature market with a sophisticated retail offer –particularly in Bangkok, Chiang Mai, Pattaya/Hua Hin and Phuket-, retailers start to move to other cities in the Greater Mekong area. Ho Chi Minh City and Hanoi are primary targets but increasingly also Phnom Penh, Vientiane and Yangon.

Rising living standards in all ASEAN countries – including the Greater Mekong Sub-Region (GMS)-provide deep changes in consumption habits and transform cities step by step. Emerging middle class in the region look to have an increasingly sophisticated choice for their own consumption. And they feel the need to fullfill their consumption dreams next to their doorstep and not to have to rush to Hong Kong or Singapore.

The Nikkei Asian Review published a few days ago a comprehensive report on changing consumption patterns in the GMS, showing that the boom on spending is now stimulating retailers from around Asia to invest.
According to Euromonitor International, Cambodia, Laos, Myanmar and Vietnam managed to doubled their combined retail sales in just four years, from US$56.7 billion in 2010 to US$100.3 billion in 2014. Euromonitor predicts that this retail figure could further grow to US$176.4 billion in 2019. A stimulating factor will be the dismantling of taxes and tariffs within ASEAN until 2018. This will further push cross-border business and sales expansion thanks to complete free flows of investments between each ASEAN member.


Thailand has been the first country in the GMS to benefit from retailers expansion. The Kingdom is of course the most mature market among the five Southeast Asian members. Bangkok is not only a major destination for tourism with 15 million of foreign visitors a year but also the centre of all economic, diplomatic and cultural activities in the Kingdom. Its GPP (Growth Provincial Product) per capita is one of the highest in the country at US$38,000 compared to US$16,000 on average. Bangkok has already over 160 malls and shopping centres and more are due to come in the next years with most investors being Thai local real estate and retail companies.

The new trend in Thailand is to open large modern style shopping malls in secondary cities. Central Pattana is one of the leading retailer in that field opening “Central Festival Shopping Malls” across all the largest cities of Thailand, such as Hat Yai, Khon Kaen, Phitsanulok, Phuket or Udon Thani.

Tet in Ho Chi Minh City

The two most promising markets are now Ho Chi Minh City and Hanoi. Both cities have seen a strong growth of their middle class in the last decade. Ho Chi Minh City is even turning into a test market for western brands with many luxury shops setting foot in the Southern metropolis. Japanese retailer Aeon opened its first mall in Vietnam, in January 2014 in Ho Chi Minh City, attracting in a year 13 million visitors. And they are now just ready to open their newest shopping mall in Hanoi, in Long Bien, located on the city outskirts. It will be one of the largest retail facilities in the country occupying some 96,000 m2 of space. It will include an entertainment park and a 10-screen Cineplex. Aeon has the ambition to have up to 10 malls in the country in the years to come.


The Japanese chain is also investing in Cambodia. It opened its first mall in Phnom Penh in 2014 and has finalized plans for the construction of its second mall in the country. The company indicates that the first shopping complex has been a huge success, attracting 15 million visitors during the first year in operation. The second mall will be located 10 kilometers (around 40 minutes drive) north of Phnom Penh’s central area in Pong Peay City, a new development project. The mall will offer retail spaces of 70,000 m2.

According to the Nikkei Asia Review, South Korea is also looking at Vietnam: E-Mart, a major South Korean supermarket chain, will open its first store in December in HCMC after Lotte Mart, which already runs 10 outlets in the country and has now ambitions to grow to 60 by 2020.

A Vietnamese company is also looking at expanding its presence in its home market. The Vingroup real estate group currently has a total of seven malls – four in Hanoi, two in Ho Chi Minh City and one in the northern province of Quang Ninh. It recently announced to open 19 more Vincom Mall in 19 other provinces while its flagship Vincom Mega Mall is being completed in Ho Chi Mnh City.


Vietnam local retailer and real estate developer Hoang Anh Gia Lai, is investing in Myanmar/ Its HAGL Myanmar Center in Yangon, Myanmar’s largest city, will integrate one of the city’s first western style shopping mall in 8 hectares of land. It is due to open by the end of October but the completion of the entire project is forecast for 2017. The shopping centre will integrate Myanmar’s first technology and IT mall. It will compete with Yangon’s largest shopping mall to date, Junction Square with some 270 shops on 30,000 m2. It was opened in 2012.

Another major development in the former Myanmar capital is the new Shangri La Shopping Mall, directly connected to the Sule Shangri-La Yangon. The hotel group is diversifying its portfolio by investing into a 6,000 m2 luxury shopping mall. It will stretch over two floors welcoming some 30 shops, restaurants and a large supermarket.


Even tiny Vientiane is turning into a hot investment location for malls. Early this year, the country saw the opening of its first modern-style luxury shopping mall, Vientiane Centre. Two more malls are now in construction. Along Fa Ngum Road, New World Shopping Complex is due to welcome 100 shops and restaurants along the Mekong River.

Meanwhile Thai distributor Sayam International is teaming up with a local partner to build a 37,000 m2 duty-free shopping mall, near the border with Thailand. The mall is slated to open in early 2016 and will host some 200 brand-name shops.



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