Reasons for returning rental properties

On a sunny Sunday, perfect for strolling and shopping, the Central Market 1 in Điện Biên Phủ city looks eerily quiet, more so than even in the late afternoon. Some kiosks are closed, while others that remain open have no customers, just vendors. Vũ Thị Lan, a vendor selling dry agricultural products (wild bananas, medicinal plants) shared: “Around my shop, there are about a dozen stalls selling agricultural products. However, currently, 5-6 shops have put up signs indicating they are transferring or liquidating their goods. The remaining stalls, like mine, are holding on, hoping that sales will pick up closer to the Lunar New Year.”

According to Lan, the rent for a stall here ranges from VND 10 to 15 million per month. “If we don’t sell at least VND 500,000 a day, we don’t make enough to cover the rent. I’ve been in business for 30 years, and I’ve never seen a year as tough as this one. For the last 4-5 days, I haven’t sold anything, and this poor sales situation has lasted for several months.” A few stalls down, a new tenant who moved in recently went bankrupt and owed hundreds of millions of VND, leading them to return the rental property and leave without a trace.

Nguyễn Thị Hòa, a vendor selling clothing and shoes at Him Lam Plaza, expressed frustration at the lack of customers. “The sales are poor, but I have to keep ‘hanging on’ because I’ve invested a lot in stock. If I stop selling, I don’t know what to do with all this inventory,” she said.

At the Central Market 1, vendors revealed that the rental costs vary depending on the size of the stalls. The more desirable locations cost up to several million VND per month. Despite offering a wide variety of goods at reasonable prices, business has been slow for months due to a lack of shoppers. When asked how they plan to overcome these difficulties, most vendors expressed a desire for policies to help reduce rental costs. “Our family’s livelihood depends on the stall, but the rent is high and there are no customers,” said one vendor.

Along Road 279 in Tân Thanh ward, Điện Biên Phủ city, it’s not hard to find several commercial properties with “for rent” signs, offering discounted rates. One landlord shared: “The rental price was quite high before, but now we’ve reduced it to VND 3-5 million per month. We’ve had the ‘for rent’ sign up for several months, but there’s still no interest. A few years ago, a property of 80-100 square meters would have rented for VND 7-12 million per month.”

Changes in consumer trends

The business difficulties and lack of customers have led many vendors to believe that the new trend in consumer behavior is to blame. The Covid-19 pandemic has changed shopping habits, especially among younger people who have become accustomed to online shopping due to its convenience. With just a few taps on a phone or computer, people can buy anything and have it delivered to their doorstep.

E-commerce has become more popular, making it unnecessary to rent a storefront on a busy street; customers can shop from the comfort of their homes, anywhere, anytime. Online shopping saves time and effort, especially in extreme weather conditions like the hot sun or heavy rain.

The fierce competition in retail, with e-commerce gaining an edge, has made traditional markets and shops even more deserted. Additionally, in the context of a challenging economy, consumers are tightening their spending and focusing on essential goods, which has resulted in fewer shoppers. The high rental prices and the rise of e-commerce, coupled with fewer customers, have made it increasingly difficult for retail businesses to thrive.