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Parkson Holdings, a Malaysian department store operator with outlets across Asia, has closed another store in Ho Chi Minh City due to a business downturn.
Parkson Flemington was opened in 2009 in HCMC’s District 11, but is now the fourth Parkson center in Vietnam to close.
In an announcement posted on its website, Parkson said the closing of Parkson Flemmington “will not affect the business of other department stores under the Parkson brand in Vietnam, and the privileges and benefits for Parkson membership card holders will still be preserved and applicable at all Parkson stores.”
Parkson entered Vietnam in 2005 and opened eight stores in Hanoi and HCMC. The remaining outlets are all in the southern metropolis.
The company suffered more than VND60 billion ($2.6 million) losses from its business in Vietnam last year, according to media reports.
Aside from fierce competition on the local market, the rapid development of e-commerce is possibly another reason for the company's gradual demise.
E-commerce has been taking off in Vietnam thanks to booming internet usage and smartphone ownership, along with massive investments from key retail players.
The percentage of e-commerce shoppers grew from 5.4 percent to 8.8 percent on average in the country's largest cities Hanoi, HCMC, Da Nang and Can Tho in 2016, and the average online shopping trip was worth triple the value of an offline basket.
The findings were outlined in the “The Future of E-commerce in FMCG” report released November last year by market research firm Kantar Worldpanel.
E-commerce in Vietnam is expected to expand from a 0.5 percent share in the fast-moving consumer goods (FMCG) market to 2.2 percent in 2025, coupled with the rise of digitization, the report said.
Vietnam’s e-commerce market climbed to about $4 billion in 2016 as one of the fastest-growing markets in the world.
Revenue from online retail in Vietnam is forecast to hit $10 billion by 2020, accounting for 5 percent of the country’s retail market.
