Ho Chi Minh City eyes outlet centers to boost tourist spending

The proposal was discussed at a seminar on developing outlet centers in Ho Chi Minh City, organized by the municipal Department of Industry and Trade on Wednesday.

Nguyen Nguyen Phuong, deputy director of the department, said the city does not view outlets simply as places where shoppers can buy goods at lower prices.

Instead, it wants to develop a new retail model that combines shopping with other services to encourage domestic consumption and attract tourists.

The department is considering three models: large-scale outlet villages located outside urban areas and designed as shopping and tourism destinations; outlets on the outskirts of the city with more flexible scales to serve both urban and nearby communities; and integrated outlets combining shopping with accommodation, entertainment, tourism and other services.

“Outlets also need to be part of a broader ecosystem linking duty-free shops, VAT refunds, shopping tourism, accommodation, travel services, transportation and entertainment,” Phuong said, stressing the need for cooperation among government agencies and businesses.

Vietnam’s relatively limited range of attractive shopping and entertainment destinations means international tourists spend less on average than visitors in many other countries, according to Tran Huu Linh, director of the Agency for Domestic Market Surveillance and Development under the Ministry of Industry and Trade.

Developing outlet centers could therefore provide a new way to stimulate the retail market while encouraging tourists to spend more during their visits, he said.

Nguyen Ngoc Hoa, chairman of the Ho Chi Minh City Business Association, said the city needs to clarify several key factors to make the outlet plan commercially viable, including target customers, sources of goods, locations, policies and customer demand.

Without careful planning in these areas, outlet centers could fail after opening, he warned.

“Policies must be stable, with strategic commitments strong enough to attract international brands,” Hoa said, adding that room should also be created for Vietnamese businesses to develop their own brands.

Location will also require careful consideration to make the most of existing and planned infrastructure, he said.

Potential areas include the Cai Mep-Thi Vai area, routes connecting to Long Thanh Airport in neighboring Dong Nai City, and Can Gio, where major transport projects are also being developed, including a future transport connection to Ba Ria-Vung Tau.

Le Hong Thuy Tien, CEO of IPP Group, said investors could provide capital, brands and management expertise and negotiate with international brands, but policy mechanisms remain a major obstacle, particularly regulations on promotions and discounts.

Meanwhile, Associate Professor Dinh Tien Minh of the University of Economics Ho Chi Minh City said outlet centers should not be viewed simply as discount shopping destinations.

With e-commerce continuing to expand, lower prices alone may not be enough to maintain the appeal of outlet centers, he said.

Instead, the novelty, uniqueness and distinctiveness of the products will be crucial to attracting customers.