retail real estate in vietnam - viet nam supply...
TRANSCRIPT
OUTLOOK FOR 2015
RETAIL REAL ESTATE MARKET UPDATE
2
VIETNAM RETAIL MARKET
Vietnam Market Overview
Market Trends
Other Indochina Markets Updates
Retailer Analytics
Legal updates on Retail Real Estate
CONTENT
VIETNAM MARKET OVERVIEW
4
VIETNAM RETAIL MARKET
APAC Real GDP Growth (2014-2015) vs Long Term Average
VIETNAM GDP GROWTH ndash REGIONrsquoS 2ND BEST
0
2
4
6
8
10
12
Vie
tna
m
Ind
one
sia
Ind
ia
Thaila
nd
Sou
th K
ore
a
Sin
ga
po
re
Hong
Kon
g
Ja
pa
n
Chin
a
New
Ze
ala
nd
Austr
alia
Phili
ppin
es
Taiw
an
Ma
laysia
Y-o
-Y R
ea
l G
DP
Gro
wth
(
)
2014F 2015F Average 2004 - 2013
Improvement in
geopolitical
pressure
China slow down -
knock-on effect
Source CBRE Research Oxford Economics December 2014
The chart does not tell this Group markets in
Export driven
Improvement in geopolitical tension
China slowdown ndash knock-on effect on commodity-export markets like Australia and New Zealand
Japan growth is minimal
Recovery in export on the
back of stronger global
demand
Oil price
drops
SLOWING IMPROVING
Election in
2016
5
VIETNAM RETAIL MARKET
OIL PRICES GETTING INCREDIBLY CHEAP
Oil had been getting stronger since 2009 2010 but then declined significantly since mid-2014
Crude oil price
Good consequences
Stronger consumptions due to lower industrial
input and logistics costs (-3 approx)
Lower construction cost
Lower building operating cost (service charge)
Bad consequences
Weakening VNDUSD
Falling oil world prices would slash Vietnamrsquos
state budget by around US$3 billion
But just a minimal impacts against VND
(Sufficient USD reserves surplus trade balance
robust FDI low inflation)
6
VIETNAM RETAIL MARKET
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013 2014
Inte
rest ra
te (
)
Average CPI (y-o-y) Rediscounting rate Refinancing rate Lending rate Deposit rate
FUNDING GETTING CHEAPER
Source Vietnamese General Statistical Office
Interest Rates and Inflation
Lending rate for the first 12 months
bull Techcombank 949
bull Vietcombank 799
bull ACB 89
7
VIETNAM RETAIL MARKET
Turnover continues to increase whilst growth continues to slow
RETAILS amp SERVICES TURNOVER
0
8
16
24
32
40
0
500
1000
1500
2000
2500
3000
35002
00
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4P
Gro
wth
Ra
te (
)
Tu
rno
ve
r (T
rilli
on
do
ng
)
Retails and Services Turnover Retails and Services Turnover Growth
8
VIETNAM RETAIL MARKET
Strong supply from Hanoi market
RETAIL MARKET UPDATE
Source CBRE Vietnam Q2 2014
Retail supply by city (NLA lsquo000 sqm)
0
200
400
600
800
1000
1200
HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi
2011 2012 2013 2014 2015F 2016F
Re
tail
su
pp
ly b
y c
ity (
NL
A lsquo0
00
sq
m)
9
VIETNAM RETAIL MARKET
0
200
400
600
800
1000
1200
Beiji
ng
She
nzhe
n
Ban
gkok
New
De
lhi
Kua
la L
um
pur
Gua
ngzh
ou
Hano
i
Sha
ngh
ai
Ma
nila
Mu
mb
ai
Sin
ga
po
re
Me
lbou
rne
Ho
Chi M
inh C
ity
Tokyo
Sydn
ey
Ade
laid
e
Brisb
an
e
Hong
Kon
g
Ja
kart
a
Auckla
nd
Pert
h
Taip
ei
De
ve
lop
me
nt
Pip
elin
e (
lsquo00
0 s
qm
)
2015F
APAC Development Pipeline
RETAIL MARKET UPDATE
Source CBRE Research Q4 2014
10
VIETNAM RETAIL MARKET
Softer rents but vacancy still up
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
-3
3
9
15
21
-40000
0
40000
80000
120000
160000
2010 2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net Absorption (sm) Vacancy
HANOI MARKET PERFORMANCE 2014
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
2
VIETNAM RETAIL MARKET
Vietnam Market Overview
Market Trends
Other Indochina Markets Updates
Retailer Analytics
Legal updates on Retail Real Estate
CONTENT
VIETNAM MARKET OVERVIEW
4
VIETNAM RETAIL MARKET
APAC Real GDP Growth (2014-2015) vs Long Term Average
VIETNAM GDP GROWTH ndash REGIONrsquoS 2ND BEST
0
2
4
6
8
10
12
Vie
tna
m
Ind
one
sia
Ind
ia
Thaila
nd
Sou
th K
ore
a
Sin
ga
po
re
Hong
Kon
g
Ja
pa
n
Chin
a
New
Ze
ala
nd
Austr
alia
Phili
ppin
es
Taiw
an
Ma
laysia
Y-o
-Y R
ea
l G
DP
Gro
wth
(
)
2014F 2015F Average 2004 - 2013
Improvement in
geopolitical
pressure
China slow down -
knock-on effect
Source CBRE Research Oxford Economics December 2014
The chart does not tell this Group markets in
Export driven
Improvement in geopolitical tension
China slowdown ndash knock-on effect on commodity-export markets like Australia and New Zealand
Japan growth is minimal
Recovery in export on the
back of stronger global
demand
Oil price
drops
SLOWING IMPROVING
Election in
2016
5
VIETNAM RETAIL MARKET
OIL PRICES GETTING INCREDIBLY CHEAP
Oil had been getting stronger since 2009 2010 but then declined significantly since mid-2014
Crude oil price
Good consequences
Stronger consumptions due to lower industrial
input and logistics costs (-3 approx)
Lower construction cost
Lower building operating cost (service charge)
Bad consequences
Weakening VNDUSD
Falling oil world prices would slash Vietnamrsquos
state budget by around US$3 billion
But just a minimal impacts against VND
(Sufficient USD reserves surplus trade balance
robust FDI low inflation)
6
VIETNAM RETAIL MARKET
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013 2014
Inte
rest ra
te (
)
Average CPI (y-o-y) Rediscounting rate Refinancing rate Lending rate Deposit rate
FUNDING GETTING CHEAPER
Source Vietnamese General Statistical Office
Interest Rates and Inflation
Lending rate for the first 12 months
bull Techcombank 949
bull Vietcombank 799
bull ACB 89
7
VIETNAM RETAIL MARKET
Turnover continues to increase whilst growth continues to slow
RETAILS amp SERVICES TURNOVER
0
8
16
24
32
40
0
500
1000
1500
2000
2500
3000
35002
00
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4P
Gro
wth
Ra
te (
)
Tu
rno
ve
r (T
rilli
on
do
ng
)
Retails and Services Turnover Retails and Services Turnover Growth
8
VIETNAM RETAIL MARKET
Strong supply from Hanoi market
RETAIL MARKET UPDATE
Source CBRE Vietnam Q2 2014
Retail supply by city (NLA lsquo000 sqm)
0
200
400
600
800
1000
1200
HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi
2011 2012 2013 2014 2015F 2016F
Re
tail
su
pp
ly b
y c
ity (
NL
A lsquo0
00
sq
m)
9
VIETNAM RETAIL MARKET
0
200
400
600
800
1000
1200
Beiji
ng
She
nzhe
n
Ban
gkok
New
De
lhi
Kua
la L
um
pur
Gua
ngzh
ou
Hano
i
Sha
ngh
ai
Ma
nila
Mu
mb
ai
Sin
ga
po
re
Me
lbou
rne
Ho
Chi M
inh C
ity
Tokyo
Sydn
ey
Ade
laid
e
Brisb
an
e
Hong
Kon
g
Ja
kart
a
Auckla
nd
Pert
h
Taip
ei
De
ve
lop
me
nt
Pip
elin
e (
lsquo00
0 s
qm
)
2015F
APAC Development Pipeline
RETAIL MARKET UPDATE
Source CBRE Research Q4 2014
10
VIETNAM RETAIL MARKET
Softer rents but vacancy still up
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
-3
3
9
15
21
-40000
0
40000
80000
120000
160000
2010 2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net Absorption (sm) Vacancy
HANOI MARKET PERFORMANCE 2014
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
VIETNAM MARKET OVERVIEW
4
VIETNAM RETAIL MARKET
APAC Real GDP Growth (2014-2015) vs Long Term Average
VIETNAM GDP GROWTH ndash REGIONrsquoS 2ND BEST
0
2
4
6
8
10
12
Vie
tna
m
Ind
one
sia
Ind
ia
Thaila
nd
Sou
th K
ore
a
Sin
ga
po
re
Hong
Kon
g
Ja
pa
n
Chin
a
New
Ze
ala
nd
Austr
alia
Phili
ppin
es
Taiw
an
Ma
laysia
Y-o
-Y R
ea
l G
DP
Gro
wth
(
)
2014F 2015F Average 2004 - 2013
Improvement in
geopolitical
pressure
China slow down -
knock-on effect
Source CBRE Research Oxford Economics December 2014
The chart does not tell this Group markets in
Export driven
Improvement in geopolitical tension
China slowdown ndash knock-on effect on commodity-export markets like Australia and New Zealand
Japan growth is minimal
Recovery in export on the
back of stronger global
demand
Oil price
drops
SLOWING IMPROVING
Election in
2016
5
VIETNAM RETAIL MARKET
OIL PRICES GETTING INCREDIBLY CHEAP
Oil had been getting stronger since 2009 2010 but then declined significantly since mid-2014
Crude oil price
Good consequences
Stronger consumptions due to lower industrial
input and logistics costs (-3 approx)
Lower construction cost
Lower building operating cost (service charge)
Bad consequences
Weakening VNDUSD
Falling oil world prices would slash Vietnamrsquos
state budget by around US$3 billion
But just a minimal impacts against VND
(Sufficient USD reserves surplus trade balance
robust FDI low inflation)
6
VIETNAM RETAIL MARKET
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013 2014
Inte
rest ra
te (
)
Average CPI (y-o-y) Rediscounting rate Refinancing rate Lending rate Deposit rate
FUNDING GETTING CHEAPER
Source Vietnamese General Statistical Office
Interest Rates and Inflation
Lending rate for the first 12 months
bull Techcombank 949
bull Vietcombank 799
bull ACB 89
7
VIETNAM RETAIL MARKET
Turnover continues to increase whilst growth continues to slow
RETAILS amp SERVICES TURNOVER
0
8
16
24
32
40
0
500
1000
1500
2000
2500
3000
35002
00
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4P
Gro
wth
Ra
te (
)
Tu
rno
ve
r (T
rilli
on
do
ng
)
Retails and Services Turnover Retails and Services Turnover Growth
8
VIETNAM RETAIL MARKET
Strong supply from Hanoi market
RETAIL MARKET UPDATE
Source CBRE Vietnam Q2 2014
Retail supply by city (NLA lsquo000 sqm)
0
200
400
600
800
1000
1200
HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi
2011 2012 2013 2014 2015F 2016F
Re
tail
su
pp
ly b
y c
ity (
NL
A lsquo0
00
sq
m)
9
VIETNAM RETAIL MARKET
0
200
400
600
800
1000
1200
Beiji
ng
She
nzhe
n
Ban
gkok
New
De
lhi
Kua
la L
um
pur
Gua
ngzh
ou
Hano
i
Sha
ngh
ai
Ma
nila
Mu
mb
ai
Sin
ga
po
re
Me
lbou
rne
Ho
Chi M
inh C
ity
Tokyo
Sydn
ey
Ade
laid
e
Brisb
an
e
Hong
Kon
g
Ja
kart
a
Auckla
nd
Pert
h
Taip
ei
De
ve
lop
me
nt
Pip
elin
e (
lsquo00
0 s
qm
)
2015F
APAC Development Pipeline
RETAIL MARKET UPDATE
Source CBRE Research Q4 2014
10
VIETNAM RETAIL MARKET
Softer rents but vacancy still up
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
-3
3
9
15
21
-40000
0
40000
80000
120000
160000
2010 2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net Absorption (sm) Vacancy
HANOI MARKET PERFORMANCE 2014
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
4
VIETNAM RETAIL MARKET
APAC Real GDP Growth (2014-2015) vs Long Term Average
VIETNAM GDP GROWTH ndash REGIONrsquoS 2ND BEST
0
2
4
6
8
10
12
Vie
tna
m
Ind
one
sia
Ind
ia
Thaila
nd
Sou
th K
ore
a
Sin
ga
po
re
Hong
Kon
g
Ja
pa
n
Chin
a
New
Ze
ala
nd
Austr
alia
Phili
ppin
es
Taiw
an
Ma
laysia
Y-o
-Y R
ea
l G
DP
Gro
wth
(
)
2014F 2015F Average 2004 - 2013
Improvement in
geopolitical
pressure
China slow down -
knock-on effect
Source CBRE Research Oxford Economics December 2014
The chart does not tell this Group markets in
Export driven
Improvement in geopolitical tension
China slowdown ndash knock-on effect on commodity-export markets like Australia and New Zealand
Japan growth is minimal
Recovery in export on the
back of stronger global
demand
Oil price
drops
SLOWING IMPROVING
Election in
2016
5
VIETNAM RETAIL MARKET
OIL PRICES GETTING INCREDIBLY CHEAP
Oil had been getting stronger since 2009 2010 but then declined significantly since mid-2014
Crude oil price
Good consequences
Stronger consumptions due to lower industrial
input and logistics costs (-3 approx)
Lower construction cost
Lower building operating cost (service charge)
Bad consequences
Weakening VNDUSD
Falling oil world prices would slash Vietnamrsquos
state budget by around US$3 billion
But just a minimal impacts against VND
(Sufficient USD reserves surplus trade balance
robust FDI low inflation)
6
VIETNAM RETAIL MARKET
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013 2014
Inte
rest ra
te (
)
Average CPI (y-o-y) Rediscounting rate Refinancing rate Lending rate Deposit rate
FUNDING GETTING CHEAPER
Source Vietnamese General Statistical Office
Interest Rates and Inflation
Lending rate for the first 12 months
bull Techcombank 949
bull Vietcombank 799
bull ACB 89
7
VIETNAM RETAIL MARKET
Turnover continues to increase whilst growth continues to slow
RETAILS amp SERVICES TURNOVER
0
8
16
24
32
40
0
500
1000
1500
2000
2500
3000
35002
00
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4P
Gro
wth
Ra
te (
)
Tu
rno
ve
r (T
rilli
on
do
ng
)
Retails and Services Turnover Retails and Services Turnover Growth
8
VIETNAM RETAIL MARKET
Strong supply from Hanoi market
RETAIL MARKET UPDATE
Source CBRE Vietnam Q2 2014
Retail supply by city (NLA lsquo000 sqm)
0
200
400
600
800
1000
1200
HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi
2011 2012 2013 2014 2015F 2016F
Re
tail
su
pp
ly b
y c
ity (
NL
A lsquo0
00
sq
m)
9
VIETNAM RETAIL MARKET
0
200
400
600
800
1000
1200
Beiji
ng
She
nzhe
n
Ban
gkok
New
De
lhi
Kua
la L
um
pur
Gua
ngzh
ou
Hano
i
Sha
ngh
ai
Ma
nila
Mu
mb
ai
Sin
ga
po
re
Me
lbou
rne
Ho
Chi M
inh C
ity
Tokyo
Sydn
ey
Ade
laid
e
Brisb
an
e
Hong
Kon
g
Ja
kart
a
Auckla
nd
Pert
h
Taip
ei
De
ve
lop
me
nt
Pip
elin
e (
lsquo00
0 s
qm
)
2015F
APAC Development Pipeline
RETAIL MARKET UPDATE
Source CBRE Research Q4 2014
10
VIETNAM RETAIL MARKET
Softer rents but vacancy still up
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
-3
3
9
15
21
-40000
0
40000
80000
120000
160000
2010 2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net Absorption (sm) Vacancy
HANOI MARKET PERFORMANCE 2014
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
5
VIETNAM RETAIL MARKET
OIL PRICES GETTING INCREDIBLY CHEAP
Oil had been getting stronger since 2009 2010 but then declined significantly since mid-2014
Crude oil price
Good consequences
Stronger consumptions due to lower industrial
input and logistics costs (-3 approx)
Lower construction cost
Lower building operating cost (service charge)
Bad consequences
Weakening VNDUSD
Falling oil world prices would slash Vietnamrsquos
state budget by around US$3 billion
But just a minimal impacts against VND
(Sufficient USD reserves surplus trade balance
robust FDI low inflation)
6
VIETNAM RETAIL MARKET
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013 2014
Inte
rest ra
te (
)
Average CPI (y-o-y) Rediscounting rate Refinancing rate Lending rate Deposit rate
FUNDING GETTING CHEAPER
Source Vietnamese General Statistical Office
Interest Rates and Inflation
Lending rate for the first 12 months
bull Techcombank 949
bull Vietcombank 799
bull ACB 89
7
VIETNAM RETAIL MARKET
Turnover continues to increase whilst growth continues to slow
RETAILS amp SERVICES TURNOVER
0
8
16
24
32
40
0
500
1000
1500
2000
2500
3000
35002
00
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4P
Gro
wth
Ra
te (
)
Tu
rno
ve
r (T
rilli
on
do
ng
)
Retails and Services Turnover Retails and Services Turnover Growth
8
VIETNAM RETAIL MARKET
Strong supply from Hanoi market
RETAIL MARKET UPDATE
Source CBRE Vietnam Q2 2014
Retail supply by city (NLA lsquo000 sqm)
0
200
400
600
800
1000
1200
HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi
2011 2012 2013 2014 2015F 2016F
Re
tail
su
pp
ly b
y c
ity (
NL
A lsquo0
00
sq
m)
9
VIETNAM RETAIL MARKET
0
200
400
600
800
1000
1200
Beiji
ng
She
nzhe
n
Ban
gkok
New
De
lhi
Kua
la L
um
pur
Gua
ngzh
ou
Hano
i
Sha
ngh
ai
Ma
nila
Mu
mb
ai
Sin
ga
po
re
Me
lbou
rne
Ho
Chi M
inh C
ity
Tokyo
Sydn
ey
Ade
laid
e
Brisb
an
e
Hong
Kon
g
Ja
kart
a
Auckla
nd
Pert
h
Taip
ei
De
ve
lop
me
nt
Pip
elin
e (
lsquo00
0 s
qm
)
2015F
APAC Development Pipeline
RETAIL MARKET UPDATE
Source CBRE Research Q4 2014
10
VIETNAM RETAIL MARKET
Softer rents but vacancy still up
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
-3
3
9
15
21
-40000
0
40000
80000
120000
160000
2010 2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net Absorption (sm) Vacancy
HANOI MARKET PERFORMANCE 2014
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
6
VIETNAM RETAIL MARKET
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013 2014
Inte
rest ra
te (
)
Average CPI (y-o-y) Rediscounting rate Refinancing rate Lending rate Deposit rate
FUNDING GETTING CHEAPER
Source Vietnamese General Statistical Office
Interest Rates and Inflation
Lending rate for the first 12 months
bull Techcombank 949
bull Vietcombank 799
bull ACB 89
7
VIETNAM RETAIL MARKET
Turnover continues to increase whilst growth continues to slow
RETAILS amp SERVICES TURNOVER
0
8
16
24
32
40
0
500
1000
1500
2000
2500
3000
35002
00
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4P
Gro
wth
Ra
te (
)
Tu
rno
ve
r (T
rilli
on
do
ng
)
Retails and Services Turnover Retails and Services Turnover Growth
8
VIETNAM RETAIL MARKET
Strong supply from Hanoi market
RETAIL MARKET UPDATE
Source CBRE Vietnam Q2 2014
Retail supply by city (NLA lsquo000 sqm)
0
200
400
600
800
1000
1200
HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi
2011 2012 2013 2014 2015F 2016F
Re
tail
su
pp
ly b
y c
ity (
NL
A lsquo0
00
sq
m)
9
VIETNAM RETAIL MARKET
0
200
400
600
800
1000
1200
Beiji
ng
She
nzhe
n
Ban
gkok
New
De
lhi
Kua
la L
um
pur
Gua
ngzh
ou
Hano
i
Sha
ngh
ai
Ma
nila
Mu
mb
ai
Sin
ga
po
re
Me
lbou
rne
Ho
Chi M
inh C
ity
Tokyo
Sydn
ey
Ade
laid
e
Brisb
an
e
Hong
Kon
g
Ja
kart
a
Auckla
nd
Pert
h
Taip
ei
De
ve
lop
me
nt
Pip
elin
e (
lsquo00
0 s
qm
)
2015F
APAC Development Pipeline
RETAIL MARKET UPDATE
Source CBRE Research Q4 2014
10
VIETNAM RETAIL MARKET
Softer rents but vacancy still up
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
-3
3
9
15
21
-40000
0
40000
80000
120000
160000
2010 2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net Absorption (sm) Vacancy
HANOI MARKET PERFORMANCE 2014
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
7
VIETNAM RETAIL MARKET
Turnover continues to increase whilst growth continues to slow
RETAILS amp SERVICES TURNOVER
0
8
16
24
32
40
0
500
1000
1500
2000
2500
3000
35002
00
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4P
Gro
wth
Ra
te (
)
Tu
rno
ve
r (T
rilli
on
do
ng
)
Retails and Services Turnover Retails and Services Turnover Growth
8
VIETNAM RETAIL MARKET
Strong supply from Hanoi market
RETAIL MARKET UPDATE
Source CBRE Vietnam Q2 2014
Retail supply by city (NLA lsquo000 sqm)
0
200
400
600
800
1000
1200
HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi
2011 2012 2013 2014 2015F 2016F
Re
tail
su
pp
ly b
y c
ity (
NL
A lsquo0
00
sq
m)
9
VIETNAM RETAIL MARKET
0
200
400
600
800
1000
1200
Beiji
ng
She
nzhe
n
Ban
gkok
New
De
lhi
Kua
la L
um
pur
Gua
ngzh
ou
Hano
i
Sha
ngh
ai
Ma
nila
Mu
mb
ai
Sin
ga
po
re
Me
lbou
rne
Ho
Chi M
inh C
ity
Tokyo
Sydn
ey
Ade
laid
e
Brisb
an
e
Hong
Kon
g
Ja
kart
a
Auckla
nd
Pert
h
Taip
ei
De
ve
lop
me
nt
Pip
elin
e (
lsquo00
0 s
qm
)
2015F
APAC Development Pipeline
RETAIL MARKET UPDATE
Source CBRE Research Q4 2014
10
VIETNAM RETAIL MARKET
Softer rents but vacancy still up
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
-3
3
9
15
21
-40000
0
40000
80000
120000
160000
2010 2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net Absorption (sm) Vacancy
HANOI MARKET PERFORMANCE 2014
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
8
VIETNAM RETAIL MARKET
Strong supply from Hanoi market
RETAIL MARKET UPDATE
Source CBRE Vietnam Q2 2014
Retail supply by city (NLA lsquo000 sqm)
0
200
400
600
800
1000
1200
HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi HCMC Hanoi
2011 2012 2013 2014 2015F 2016F
Re
tail
su
pp
ly b
y c
ity (
NL
A lsquo0
00
sq
m)
9
VIETNAM RETAIL MARKET
0
200
400
600
800
1000
1200
Beiji
ng
She
nzhe
n
Ban
gkok
New
De
lhi
Kua
la L
um
pur
Gua
ngzh
ou
Hano
i
Sha
ngh
ai
Ma
nila
Mu
mb
ai
Sin
ga
po
re
Me
lbou
rne
Ho
Chi M
inh C
ity
Tokyo
Sydn
ey
Ade
laid
e
Brisb
an
e
Hong
Kon
g
Ja
kart
a
Auckla
nd
Pert
h
Taip
ei
De
ve
lop
me
nt
Pip
elin
e (
lsquo00
0 s
qm
)
2015F
APAC Development Pipeline
RETAIL MARKET UPDATE
Source CBRE Research Q4 2014
10
VIETNAM RETAIL MARKET
Softer rents but vacancy still up
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
-3
3
9
15
21
-40000
0
40000
80000
120000
160000
2010 2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net Absorption (sm) Vacancy
HANOI MARKET PERFORMANCE 2014
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
9
VIETNAM RETAIL MARKET
0
200
400
600
800
1000
1200
Beiji
ng
She
nzhe
n
Ban
gkok
New
De
lhi
Kua
la L
um
pur
Gua
ngzh
ou
Hano
i
Sha
ngh
ai
Ma
nila
Mu
mb
ai
Sin
ga
po
re
Me
lbou
rne
Ho
Chi M
inh C
ity
Tokyo
Sydn
ey
Ade
laid
e
Brisb
an
e
Hong
Kon
g
Ja
kart
a
Auckla
nd
Pert
h
Taip
ei
De
ve
lop
me
nt
Pip
elin
e (
lsquo00
0 s
qm
)
2015F
APAC Development Pipeline
RETAIL MARKET UPDATE
Source CBRE Research Q4 2014
10
VIETNAM RETAIL MARKET
Softer rents but vacancy still up
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
-3
3
9
15
21
-40000
0
40000
80000
120000
160000
2010 2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net Absorption (sm) Vacancy
HANOI MARKET PERFORMANCE 2014
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
10
VIETNAM RETAIL MARKET
Softer rents but vacancy still up
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
-3
3
9
15
21
-40000
0
40000
80000
120000
160000
2010 2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net Absorption (sm) Vacancy
HANOI MARKET PERFORMANCE 2014
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
11
VIETNAM RETAIL MARKET
Consistent performance for the last eight quarters
HOCHIMINH CITY PERFORMANCE 2014
Source CBRE Vietnam Q4 2014
AVERAGE ASKING RENT
(US$smmonth)
VACANCY RATE
()
2014
Q4
Q3
Q2
Q1
2013
Q4
Q3
Q2
Q1
2012
Q4
Q3
Q2
Q1
2011
Q4
Q3
Q2
Q1
NON-CBD CBD
050100150 0 50 100 150
0
4
8
12
16
20
-20000
0
20000
40000
60000
2011 2012 2013 2014
Va
ca
ncy R
ate
(
)
Net A
bso
rptio
n (
sm
)
Net absorption Vacancy rate
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
12
VIETNAM RETAIL MARKET
HANOI
NEW SUPPLY IN 2014
LOTTE MART
(Mipec Tower)
Dong Da District
GFA 27000 sm
Opened Q12014
Shopping Centre amp Department Store
LOTTE
DEPARTMENT STORE
Ba Dinh District
GFA 21480 sm
Opened Q32014
Trang Tien Plaza reopening
Add more FampB
More affordable brands
ALMAZ by Vingroup
Convention ndash FampB ndash Retail amp Entertainment Center
Long Bien District
GFA 25 ha
Opened Q42014
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
13
VIETNAM RETAIL MARKET
HoChinhMinh City
NEW SUPPLY IN 2014
AEON MALL
TAN PHU CELADON
Tan Phu District
GFA 42100 sm
Anchor Aeon Mart Aeon
department store CGV Dream
Games
Opened Q12014
Shopping Centre amp Department Store
AEON MALL
BINH DUONG CANARY
Binh Duong
GFA 62100 sm
Anchor Aeon Mart Aeon
department store CGV Play
Time
Opened Q42014
LOTTE MART CONG HOA
Tan Binh District
GFA 10000 sm
Anchor Lotte mart Lotte Cinema
Wall Street English California
Fitness
Opened Q42014
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
14
VIETNAM RETAIL MARKET
Hanoi
UPCOMING RETAIL DEVELOPMENT
AEON MALL HANOI
bull Long Bien district
bull GFA 108000 sm
bull 4 floors
bull Under construction
bull Expected to open
Q4 2015
Expect to open in 2015
HOA BINH GREEN CITY
bull Hai Ba Trung District
bull GFA 25000 sm
bull 4 floors
bull Opened on Jan 31st
bull Offering free rentals in
perpetuity
HO GUOM PLAZA
bull Ha Dong District
bull GFA 23400 sm
bull 5 floors
bull Completed Open
for lease
bull Anchor tenants
Tran Anh CGV
bull Expected to open
(fully) Q2 2015
VINCOM NGUYEN CHI
THANH
bull Dong Da District
bull GFA 44500 sm
bull Under construction
bull Expected to open Nov
2015
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
15
VIETNAM RETAIL MARKET
Ho Chi Minh City
UPCOMING RETAIL DEVELOPMENT
Expect to open in 2015
VINCOM THU DUC
Thu Duc District
GFA 27860 sm
Expected to open Feb 8
2015
SC VIVOCITY
District 7
GFA 62000 sm
Expected to open April 2015
PEARL PLAZA
Binh Thanh District
GFA 20000 sm
Expected to open July 2015
THAO DIEN PEARL
District 2
GFA 20000 sm
Expected to open July 2015
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
16
VIETNAM RETAIL MARKET
METRO LINE NO 1 AND RETAIL PROJECTS
Taken in front of Rex Hotel on Jan 7 2015
Vinhomes Central Park
Thao Dien Pearl
The Vista An Phu
Vincom MegaMall Masteri Thao Dien
Cantavil Premier
The Estella Heights
NEW EASTERN BUS STATION
LONG BINH DEPOT
The One
Union Square Tax Plaza
Saigon Center
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
17
VIETNAM RETAIL MARKET
Retailing hospots across APAC ndash strong activities in Hanoi
RETAIL MARKET UPDATE
HANOI
27 ENTRIES
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
18
VIETNAM RETAIL MARKET
Hanoi amp HCMC Markets
NEW RETAIL ENTRIES IN 2014
Ho Chi Minh City
Hanoi
MORE TO COMEhellip
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
MARKET TRENDS
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
20
VIETNAM RETAIL MARKET
Vingrouprsquos movements in retail sector
LOCAL PLAYERS EXPAND
VINCOM MEGAMALL THAO
DIEN
GFA 100000 sm
Expected completion 2015
VINCOM
NGUYEN CHI
THANH
GFA 44500 sm
25 Shopping Centers in 2015 - HCMC HANOI BAC NINH
VIET TRI DA NANG CAN THO BIEN HOA AN GIANG
HAI PHONG hellip
To open 100
supermarkets and
1000 convenience
stores in the next
3 years
VINCOM
DA NANG
GFA 31000 sm
VINCOM
CAN THO 2
GFA 14500 sm
MampA activity by Vingroup
13 supermarkets and convenience
stores with ~ 40000 sm retail area
VINCOM MEGAMALL
TRUONG CHINH -
HCMC
GFA 100000 sqm
To invest US$166 million
hellip
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
21
VIETNAM RETAIL MARKET
Mostly Asian retailers Korea Japanhellip
AND FOREIGNERS TOO
Expanded to Dong Nai and Da Nang
Opened Lotte Mart Binh Duong and Phan Thiet
bull Bought Pico
bull Opened Lotte Department Store in Hanoi
2008
2012
2013
2014 2020
To open
60 super-
markets
in
Vietnam
Ministop Trung Nguyen (25 share)
Aeon Mall HCMC
Aeon Mall Binh Duong
Aeon Mall Hanoi
20 hypermarkets
2011
1 2014
11 2014
2015
2020
Already successfully acquired a 30ndash
stake in Fivimart (operates 20 stores
in Hanoi) amp a 49 stake in Citimart
(runs 27 stores mainly in HCMC)
Opened first store in HCMC
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
22
VIETNAM RETAIL MARKET
hellipand Thailand
AND FOREIGNERS TOO
BJCrsquos Bs Mart bought 94 Family marts in Vietnam
aim to expand to 300 stores by 2018
BJC acquires Metro Vietnam for
US$879 million incl 19 distribution
centers and related real estate
Central Grouprsquos Robins Department
Store in Hanoi and HCMC
Central Group buys 49 stake in Nguyen Kim
49 51
Target gt 50 stores in 2019
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
23
VIETNAM RETAIL MARKET
DEPARTMENT STORE
2005
2013 - 2014
Robins Department Store
Diamond Plaza
Parkson Department
Store
2015 - 2016
Vingroup
Department
store
1999
Lotte Department Store
Takashimaya
Source Google Images
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
24
VIETNAM RETAIL MARKET
AFFORDABLE RETAIL
SAIGON SQUARE 3
District 3 HCMC
GFA 3100 sm
Opened 1 Jan 2015
HUNG VUONG SQUARE
District 5 HCMC
GFA 9500 sm
Opened 31 Dec 2014
More Bazaar emerged Supermarket
AEON CITIMART
Go Vap District HCMC
Opened Jan 2015
Rent-free Shopping Center
V+ Shopping Center ndash Hoa Binh
Green City
Minh Khai Street Hai Ba Trung District Hanoi
GFA 25000 sqm
Open 31st Jan 2015
Lower number of SKUrsquos
Rental free for all store selling ldquoMade-in-Vietnamrdquo
products
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
25
VIETNAM RETAIL MARKET
76
24 Shopping center
High Street
FampB is increasingly dominant with 47
Tenants enquiries by preferences 2014
High Street stores are still highly
preferred by retailers
Tenants enquiries by categories 2014
of enquiries
Source CBRE Vietnam Q4 2014
FampB
Fashion
Accessories
Education
Cosmetics
Furniture
Others
Source CBRE Vietnam Q4 2014
Source CBRE Vietnam Q4 2014
High-end restaurants moving out
More casual FampB moving in
FOOD amp BEVERAGE Steady demand ndash New Entries - Expansion
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
26
VIETNAM RETAIL MARKET
FOOD amp BEVERAGE DESTINATIONS
Crescent Lake
ndash D7 HCMC
West Lake Hanoi
Almaz ndash Long Bien
Dist Hanoi
Source Google Images
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
27
VIETNAM RETAIL MARKET
ESTABLISHED amp EMERGING RETAIL NODES IN HANOI
West Lake
Korean Town ndash Trung Hoa Nhan Chinh Old Quarter
Source Google Images
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
28
VIETNAM RETAIL MARKET
UNCONVENTIONAL RETAIL IN HCMC
CBD Location
Cheaper rent
New concept young cool
Word of Mouth
Roof-top beer Club
Upstairs Cafeacute Fashion store ndash In small allyrsquos
Cinema in 4-star Hotel
Source Google Images
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
29
VIETNAM RETAIL MARKET
Therersquos enough of the pie for everyone
ONLINE SHOPPING
Foreigner Players keep investing Rocket
Internet (Lazadavn Zaloravn Lamidovn)
701Search (ChoTotvn)
More Big Local Players to join market
VinEcom (Vingroup) Sendo (FPT) VCCorp
24h
Contribution from services providers
online payment shipping
Support from Government Vietnam E-
commerce and Information Technology
Agency ndash Ministry of Industry and Trade
Individual sellers mostly through
Facebook Instagram
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
30
VIETNAM RETAIL MARKET
Shopping center landlords must understand the needs thoroughly
COMPETITION WILL INTENSIFYhellip
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
31
VIETNAM RETAIL MARKET
CBRE recommends shopping cente landlords four strategies
STRATEGIES FOR SUCCESS
Source The New Age of the Asia Pacific Retail Market CBRE Research 2014
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
32
VIETNAM RETAIL MARKET
CBRE recommends retailers adapt their online strategy
WHAT SHOULD LANDLORDS DO TO CATCH THE TREND
Big data is here to help Use existing data provided by
customers to formulate a
more tailored strategies to
enhance overall shopping
experience
Create simple and useful apps 35 of survey
respondents admitted
to have never been
using mobile
applications
designed specifically for shopping
centers For most app users simplicity
and ease of use is critical
Build your brand Holding special events at shopping centers may
not generating additional sales however they
are the key to crafting a mallrsquos brand and image
BRAND
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
OTHER INDOCHINA MARKETS UPDATES
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
34
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE - VIENTIANE
Home Ideal Talat Sao
Mall 1
Talat Sao
Mall 2 ASEAN
Mall
D Mart
Vientiane
New World
San Jiang
market
450
Vanthong
Plaza
Lane Xang
Arcade
Vanthong
Plaza
Vientiane
Centre
View Mall
That Luang
Plaza
TTTM
Nakhone Sup
Vientiane
Complex
(BIM)
World
Trade
Centre
Future projects Current projects
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
35
VIETNAM RETAIL MARKET
LAOS MARKET UPDATE ndash FUTURE SUPPLY
VIENTIANE CENTER Vientiane Laos
Complex of Office Shopping center amp Service
Apartments
Developer North Nong Chan
Development amp Commercial
Center Company Co Ltd Retail GFA 53333 sqm
Completion 2015
WORLD TRADE CENTER Vientiane Laos
Complex of Office Shopping center Residential amp
Hotel
Developer Lao International Development Co Ltd
Retail GFA 200000 sqm
Completion 2016
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
36
VIETNAM RETAIL MARKET
THAT LUANG PLAZA Vientiane Laos
Shopping center
Developer Chitchareune That Luang
Plaza Sole Co Ltd
Retail GFA 26880 sqm
Completion Q22016
VIENTIANE NEW WORLD Vientiane Laos
Complex of Business Center
Shopping center amp Residential
Developer CAMCE
Retail GFA 80000 sqm
Completion Q22016
LAOS MARKET UPDATE ndash FUTURE SUPPLY
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
37
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
38
VIETNAM RETAIL MARKET
TK AVENUE
Developer TK Avenue Co
GFA 11000 sq m
Opening Date 2011
PARAGON
Developer Paragon
GFA 10000 sq m
Opening Date 1995
AEON PHNOM PENH
Developer Aeon
GFA 104000 sq m
Opening Date 2014
SORYA SHOPPING CENTER
Developer Canadia
GFA 40000 sq m
Opening Date 2003
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
39
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATES ndash EXISTING SUPPLY
VATTANAC TOWER
Developer Vattanac
GFA 7000 sq m
Opening Date 2014
NAGAWORLD
Developer NagaCorp
GFA 1055 sq m
Opening Date 1995
SOVANNA
Developer Canadia
GFA 25000 sq m
Opening Date 2008
YOUNG
Developer Young Co
GFA 28000 sq m
Opening date 2013
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
40
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
LANDMARK
Developer HK Land
GFA 13000 sq m
Opening Date 2017
PARKSON PCC
Developer Hassan
GFA 70000 sq m
Opening Date 2016
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
41
VIETNAM RETAIL MARKET
CAMBODIA MARKET UPDATE ndash FUTURE SUPPLY
PARKSON LION CITY
Developer Lion Group
GFA 80000 sq m
Opening Date 2017
OLYMPIA CITY
Developer Canadia
GFA TBC sq m
Opening Date 2018
BPH TOWNCENTER
Developer Peng Huoth
GFA 143000 sq m
Opening Date 2018
THE BRIDGE
Developer Oxley
GFA 30000 sq m
Opening Date 2017
AEON PHNOM PENH 2
Developer Aeon
GFA TBC sq m
Opening Date TBC
NAGACITY WALK
Developer NagaCorp
GFA 15800 sq m
Opening Date 2017
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
42
VIETNAM RETAIL MARKET
Approximately 40 retail developments in Yangon
MYANMAR RETAIL MARKET OVERVIEW
South
Outer City
East
Outer City
North
Outer City
West
Outer City
Inner City
Down Town
Shopping centre
Department stores
Hypermarket
Supermarket
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
43
VIETNAM RETAIL MARKET
EXISTING PROJECTS IN YANGON MYANMAR
DAGON shopping CENTER
Mixed-use development
Developer Dagon International
Retail GFA 15000 sqm
Completion 2011
Junction Square
Shopping center
Developer STD
Retail GFA 30000 sqm
Completion 2012
TAW WIN CENTER
Shopping center
Developer
Retail GFA 45000 sqm
Completion 2011
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
44
VIETNAM RETAIL MARKET
PIPELINE PROJECTS IN YANGON MYANMAR
Myanmar Center
Mixed-use development
Developer Hoang Anh Gia Lai
(Vietnam)
Retail GFA 54000 sqm
Completion Q22015 (Retail)
Junction City
Landmark
Mixed-used development
Developer SPA Yoma Group
Retail GFA 38000 sqm
Completion 2016
Hotel Shopping mall Offices
Developer Shwe Taung Group
Retail GFA 53333 sqm
Completion 2016
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
RETAILER REPRESENTATION - ASIA
RETAILER ANALYTICS
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
46
VIETNAM RETAIL MARKET
CBRErsquos Retailer Analytics platform allows clients to
ASSESS AND SELECT THE
MOST PROFITABLE
TRADING LOCATIONS
DELIVER THE MOST
PROFITABLE STORE
We are the only real estate advisor who can bring together knowledge and data
on consumer demographics market size retailer activity turnover potential and
real estate affordability This combination allows us to provide you with the most
accurate assessment of profitability and viability at country city and store level
Our ability to model and review the largest number of retail destinations across
Asia means that we can identify unexpected locations and opportunities for you
We also use local knowledge of future retail developments to spot locations
which will become attractive in the longer term
Because our Retailer Representation team works hand-in-hand with our agency
teams throughout Asia we can ensure our country city and street level
recommendations are truly deliverable Once decisions have been made on the
target destinations our Asia Retailer Representation team will work with our
market leading agents to negotiate and deliver the best stores on the best terms
IDENTIFY LATENT
OPPORTUNITIES ACROSS
A BROAD GEOGRAPHY
BENEFITS TO YOU
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
47
VIETNAM RETAIL MARKET
To answer those question
CBRE combines geography
statistics economics and real
estate data in a unique
analytical framework to
support retail network
planning
Where and who are my customers
How many stores can a market hold
and how much demand exists
Whatrsquos the best process for market
entry expansion and network
optimization
What kind of location should I pursue
Mall Street Department Store or
Factory Outlet
How much revenue will I generate Do
the economics stack up
What will the impact be on my existing
stores (cannibalization)
WHY RETAILER ANALYTICS
BENEFITS TO YOU
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
48
VIETNAM RETAIL MARKET
CBRE can provide clients a comprehensive strategy solution
for market entry and expansion existing store evaluations
and site selection The process is thorough putting our
clients in the best position for success throughout Asia
Country and city level
strategies
CBRE will recommend
executable strategies
and achievable locations
with the highest turnover
potential
Local agent insights
existing network
evaluation impact
analysis and new location
forecasting
DEVELOP OVERALL
STRATEGY
DRILL DOWN TO
MARKET LEVEL
SITE SELECTION
WHY RETAILER ANALYTICS
OUR APPROACH
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
49
VIETNAM RETAIL MARKET
WHY RETAILER ANALYTICS
MARKET ANALYTICS
RETAIL LANDSCAPE MARKET OVERVIEW
CATCHMENT MODELING + SALES DRIVERS + DEMAND AND SALES FORECASTING +
COMPETITOR BENCHMARKING
+
CBRE RECOMMENDATIONS
ACQUISITION AND STRATEGY MANAGEMENT
METHODOLOGY
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
50
VIETNAM RETAIL MARKET
PART I Market Overview and Retail Landscape
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
51
VIETNAM RETAIL MARKET
RETAILER ANALYTICS ndash PART I
MACRO ANALYSIS
DEMOGRAPHIC
TRANSPORT AND
INFRASTRUCTURE
UNIQUE CITY FEATURES
MARKET OVERVIEW
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
52
VIETNAM RETAIL MARKET
COMPETITOR MAPPING
GAP ANALYSIS
(identify market gaps for
further investigation)
COMPETITOR amp
ADJACENCY
(count per retail centre)
REAL ESTATE ANALYSIS
(rents landlords supply
pipeline sales densities)
RETAILER ANALYTICS ndash PART I RETAIL LANDSCAPE
GAP ANALYSIS Competitors Location Adjacencies Existing stores
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
53
VIETNAM RETAIL MARKET
Part 2 Market Analytics amp Competitor Benchmarking
PART II Market Analytics
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
54
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Retail Centre Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential
for your brand This allows retail centres to be ranked both within and between markets
Demand
Model current and future national
demand to census zones and correlate
to demographic socio-economic
characteristics
Supply
Assemble data to measure the size
and profile of every Retail Centre and
the fit with the client brand
Gravity model
Calibrate CBRErsquos Gravity Model to
replicate real world interactions
between Demand and Supply
METHODOLOGY
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
55
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Market Potential and Market Share
Market Potential and Market Share
Ho Chi Minh Retail Demand
at commune level
CBRE will model consumer demand to city district and commune administrative boundaries
to better understand where demand exists throughout Vietnam
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
56
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
MARKET MODELLING
Catchment Definition
CBRE will model the catchments of every retail centre to better understand the market potential for your brand
This allows retail centres to be ranked both within and between markets
Retail Centre Scorecard and Catchment Modelling
General Information
Urban Shopphing Centre (CBD) or Suburban Shopping Centre
SCORE Score rank
1Space Availability
How quickly can a retai ler lease a space in the centreThere is no availability due to external factors (Ie government
project rennovations) for a unforseen time1
2CBRE Centre Perception
Retai l strength in terms of abi l i ty to draw customersThe environment and vicinity of the location is poor 1
3Property Management Quality
Clean but could be cleaner average management presence of
security camera and staff3
4Centre Visibility
Is the centre and entryexit easi ly spotted whi le walking or dr iving by Average visibility poor signage poor access (entranceexit) 2
5Transit Accessibility
Strong direct access (parking and bus station are connected to the
mall but not the metro)4
6Marketing
How wel l does the retai l centre market their band and tenantsGood marketing activities (leisure facilities events community
actionhellip)3
7Sustainability
Level of environmental certi fication (eg LEED and China Energy Rating) Lowest sustainability rating 2
8 Productivity (new turnoverSqm research data availability) NA
9Area Maturity
A mix of office residential and retail offering (majority department
store format)4
10
Supply Rating
Potential conflict and opportunity in waiting for the new
developments vs securing a location in an existing location (Ie
Dazhongli eastern portion of West Nanjing Road)
3
11 Footfall NA
12 Social Media Index NA
13Luxury - Brand Adjacencies
Presence of Hermes Gucci Luis Vuitton Chanel PradaTwo brands out of the four selected brands 2
Brand Adjacencies (by count - how many adjacencies exist) NA
14 Accessories (Luxury) NA
15 Accessories (Premium) NA
16 Accessories (Mass) NA
17 Apparel (Luxury) NA
18 Apparel (Premium) NA
19 Apparel (Mass) NA
20 Electronics (Luxury) NA
21 Electronics (Premium) NA
22 Electronics (Mass) NA
23 House amp Home (Luxury) NA
24 House amp Home (Premium) NA
25 House amp Home (Mass) NA
26 Personal Care (Luxury) NA
27 Personal Care (Premium) NA
28 Personal Care (Mass) NA
29 ToysGames amp Books (Luxury) NA
30 ToysGames amp Books (Premium) NA
31 ToysGames amp Books (Mass) NA
32 ToysGames amp Books (Luxury) NA
33 ToysGames amp Books (Premium) NA
34 ToysGames amp Books (Mass) NA
35 Multiple Merchandise Stores (Luxury) NA
36 Multiple Merchandise Stores (Premium) NA
37 Multiple Merchandise Stores (Mass) NA
38 Grocery Stores (Luxury) NA
39 Grocery Stores (Premium) NA
40 GroceryStores (Mass) NA
41 FampB (Bar - Luxury) NA
42 FampB (Bar - Premium) NA
43 FampB (Bar - Mass) NA
44 FampB (Full Service Restaurant - Luxury) NA
45 FampB (Full Service Restaurant - Premium) NA
46 FampB (Full Service Restaurant - Mass) NA
47 Service (Communications) NA
48 Service (Financial) NA
49 Service (Personal Care) NA
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
57
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
CBRE works with
international clients to
understand what drives
sales in existing
locations to aid future
expansion
POTENTIAL DRIVERS OF SALES
COMPLEMENTARY
RETAILERS
FUTURE GROWTH
TO 2020 (GDP)
TOTAL MARKET SIZE
(SPEND)
OF
PROFESSION
OF MOST
AFFLUENT
GROUP
MALEFEMALE
COMPETING
RETAILERS
REVENUE DRIVERS
CASE STUDIES For luxury retailers we have worked with in Asia drivers often relate to
purchasing power and complimentarycompeting adjacencies rather
than market size or sheer volume of people
For a mid-market fashion brand in Malaysia the presence of those
aged 10-19 was important as this was the target market for the brand In
this case footfall was also essential because of the high volume of sales
required for what was an inexpensive product
For an upper-mid market watch retailer in the Taiwan we found that
sales were driven by those aged 25-44 years of age Additionally
affluence was a factor as well as market size and the presence of key
footfall drivers
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
58
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
EXISTING STORE EVALUATION
NETWORK OPTIMIZATION amp SALES FORECASTING
VariablePercentage
Impact
Direction of
Relationship
Skincare Competitors 18 +
Single 17 +
Aged 20-24 15 +
Adjacencies 14 +
Health amp Beauty Spend 13 +
Aged 0-4 9 +
Catchment Population 9 +
Department Store Sales 5 +
Over Performance of Doors
Under Performance of Doors
Understanding the factors driving sales of your existing portfolios allows CBRE to analyse for network
optimizations and evaluate sites for trading potential
What is driving my
sales in Hanoi
Rsup2 = 074
$0
$500000
$1000000
$1500000
$2000000
$2500000
$- $500000 $1000000 $1500000 $2000000 $2500000 $3000000
Fo
rec
as
t R
eta
il S
ale
s
Actual Retail Sales
How are my stores and
sites performing
compared to the model
Under Performance of Doors
Over Performance of Doors
CBRE use multiple regression analysis to test market
variables for their contribution towards store sales Regression
analysis is a statistical technique used to understand the level of
impact on sales that each particular variable has such as
complementary retailers competition market size and consumer
demographics
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
59
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Retailer X Store Profitability
Models
Retailer X Store Profitability
Models
COUNTRY A COUNTRY X
TOWN B TOWN Y
Year 1 Year 1
Annual Turnover $750257 Annual Turnover $849958
Gross Profit $430493 Gross Profit $491915
Annual Rent + Rates $87037 Annual Rent + Rates $269266
Payroll $85875 Payroll $128798
Other Costs $49659 Other Costs $54283
Total Costs $222571 Total Costs $452348
Contribution $207922 Contribution $39567
Contribution as Turnover 28 Contribution as Turnover 5
CBRE uses cost
modelling to show
retailers what
operating costs will
apply and how this
impacts upon margin
Rent
Business rates
Cost of goods
Shipping
Head office costs
Advertisingmarketing costs
SALES FORECASTING
THE IMPACT OF RENT ON MARGIN
COSTS ASSESSED
Service charge
Employment costs
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
60
VIETNAM RETAIL MARKET
RETAILER ANALYTICS- PART II
SALES AND DEMAND FORECASTING
IMPACT ANALYSIS
NO CHANGE
CBRE will quantify impacts and identify action that should be taken by the client as a
result of network optimizations and the expected changes in revenue due to pipeline
developments coming to fruition over the next 3 to 5 years (to 2020) This has taken into
account
Target market retail centre pipeline developments
Retail spend growth (2020 forecast - Oxford Economics)
Changes in the flow of retail spend
On this basis CBRErsquos recommendations have been split into four categories
DROP NEW FORMAT EXPANSION
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
61
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART II
Based on the results of store profitability and demand modelling locations are prioritised at sub-market
city and country levels These recommendations are then fed to our local agency teams to validate and
finalize the recommendations
Our local agency teams are part of an integrated holistic process
The analytic rigour of our Retailer Analytics team and the experience of our agency teams combine
together to create the strategy for our clients
CITY LOCATION FORECAST TURNOVER MARGINS
KUALA LAMPUR BERJAYA TIMES SQUARE $2112000 798
JOHOR BAHRU JOHOR PREMIUM OUTLET $1947000 773
PLAZA SENTOSA $2145000 619
CITY LOCATION FORECAST TURNOVER MARGINS
SINGAPORE VIVOCITY $2750000 431
CITY LOCATION FORECAST TURNOVER MARGINS
HONG KONG HARBOUR CITY $1495000 823
MALAYSIA
SINGAPORE
HONG KONG
CITY LOCATION FORECAST TURNOVER MARGINS
HYOGO HANKYU NISHINOMIYA GARDENS $1850000 843
TOKYO TAKASHIMAYA TIMES SQUARE $4350000 812
TOKYO LALAPORT TOYOSU $3250000 616
IBARAKI AEON MALL MITO-UCHIHARA $2700000 512
SAITAMA AEON LAKE TOWN KAZE $3245000 501
JAPAN
CITY LOCATION FORECAST TURNOVER MARGINS
SHANGHAI SKYMALL $2351000 1032
BEIJING HUAXI LE MALL $2900000 954
HANGZHOU MIXC HANGZHIOU $1500000 812
NANJING NANJING INTERNATIONAL CENTRE $2876000 756
BEIJING BEIJING SCITECH PREMIUM OUTLETS $2000000 746
SHANGHAI SUPERBRAND MALL $1700000 743
BEIJING TAIKOO LI SANLITUN $2871000 642
CHONGQING SM CHONGQING YUBEI $2300000 619
TIANJIN GALAXY MALL $2866000 616
CHINA
CITY LOCATION FORECAST TURNOVER MARGINS
TANGERAND MALL ALAM SUTERA $1850000 843
JAKARTA PLAZA SENAYAN $4350000 812
JAKARTA MALL ARTHA GADING $3250000 616
BEKASI MAL METROPOLITAN $2700000 512
JAKARTA SENAYAN CITY MALL $3245000 501
INDONESIA
SALES AND DEMAND FORECASTING
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
62
VIETNAM RETAIL MARKET
COMPETITORSrsquo RENTS
COMPETITOR BENCHMARKING
RETAILER ANALYTICS ndash PART II
COMPETITORSrsquo SALES ANALYSIS +
CBRE will provide competitor
benchmarking in the recommended
centres as an additional quantifier
of performance
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
63
VIETNAM RETAIL MARKET
PART III CBRE RECOMMENDATIONS
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
64
VIETNAM RETAIL MARKET
RETAILER ANALYTICS - PART III
The recommendation will assess the strongest retail markets evaluating existing and
future real estate The projects will be prioritized by country city and submarket
3 to 5 year growth or optimization strategy Recommendations by submarket
Mapping of target projects with relevant location and positioning
RECOMMENDATION
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
65
VIETNAM RETAIL MARKET
PART IV SOLUTIONS FOR EVERY RETAILER
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
66
VIETNAM RETAIL MARKET
RETAILER ANALYTICS
SOLUTIONS FORhellip
Market Entry
Market Overview
Retail Landscape
Market and Catchment Modeling
Demand Analysis and Sales Drivers
Market Potential
Competitor Benchmarking
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of market demand for brands and
categories
Achievable recommendations and locations with the
highest revenue potential
Achievable 3 to 5 year growth strategy
Benefits
Understanding of the target market macro-economy
Understanding of rents landlords supply pipeline and
sales densities
Understanding of the competitive landscape and
competitor penetration
Understanding of available demand for brands and
categories
Impact Analysis ndash Competitor Sales and Pipeline
Sales Forecasting based on a sound statistical
approach
Achievable 3 to 5 year growth strategy
Market Expansion amp Optimization
Market Overview
Retail Landscape
Competitor and Adjacency Impact Analysis
Market and Catchment Modeling
Sales Impact Analysis
Existing Store Assessment
Network Optimization
Sales Forecasting
Pipeline Impact Analysis
Competitor Benchmarking
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
67
VIETNAM RETAIL MARKET
Case Studies
CBRE CLIENTS
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
For more information please contact
Michael Ruby Head of Asia Retailer Analytics CBRE Asia T +852 2820 2916
Email michaelrubycbrecomhk
Joel Stephen Head of Retailer Representation
CBRE Asia T +852 2820 2803
Email joelstephencbrecomhk
Richard Leech MRICS Executive Director Retail Services CBRE South East Asia
Hang Vu Senior Manager Retail Services CBRE Vietnam
T +84 912 573 130
Email richardleechcbrecom
T +84 903 012 175
Email hangvucbrecom
CAMBODIA MARKET
MYANMAR MARKET
Trang Tran Senior Manager Retail Services
CBRE Vietnam T +84 912 486 399
Email trangtrancbrecom
Laszlo Fulop Senior Retail Consultant Retail Services
CBRE Vietnam T +84 972 058 444
Email laszlofulopcbrecom
Michael Vong Retail Consultant Retail Services
CBRE Vietnam +84 917 294 834
michaelvongcbrecom
LAOS MARKET
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
69
VIETNAM RETAIL MARKET BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND
| VIETNAM
RETAIL LEGAL UPDATE VIETNAM CAMBODIA AND LAO PDR
5 FEBRUARY 2015
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
WHAT MAKES US UNIQUE
ldquoWe are pioneers in emerging marketsrdquo
2011 1994 2010 2006 1995 2005
Singapore Bangladesh
Indonesia
Lao PDR Cambodia
Myanmar
Thailand Vietnam
Our Strategy
Not ldquoGo Where our Clients Gordquo BUT ldquoGo BEFORE you
Gordquo
70
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
71
Part 1
Key Legal Regulations
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
VIETNAM
Key news laws are expecting to boost the retail industry in Vietnam
ndash Law on Investment
ndash Law on Enterprises
ndash Law on Real Estate Business and Law on Housing
The new laws will enter into force on 1st July 2015
Decree 23 of the Government dated 12 February 2007
Circular 08 of the Ministry of Industry and Trade (ldquoMOITrdquo) on trading
activities (including retail business)
72
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
VIETNAM
Circular 34 of the MOIT entered into force in February 2014 it
ndash announces the schedule for implementation of foreign companiesrsquo
trading activities
ndash replaces Decision 10 on the same subject which was issued in 2007
As of 1 January 2015 pursuant to the ASEAN Trade in Goods
Agreement (ATIGA) 10000 merchandise items coming from ASEAN
member countries are free of custom barriers (import tax reduced to
0)
73
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
CAMBODIA
The Civil Code of 2007
The 2011 Law on implementation of certain provisions of Civil Code
Law on Investment dated 4 August 1994 (as amended 4 February
2003)
Law on Commercial Enterprises dated 19 June 2005
The 2001 Land Law
74
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
LAOS PDR
Investment Promotion Law 02NA dated 08 July 2009
Decree on the Implementation of the Investment Promotion Law
119PM dated 20 April 2011
Decision regarding Businesses on Retail and Wholesale Trade
0977MOIC ITD dated 18 May 2012
Enterprise Law ( 46NA 26 December 2013)
Decree on Document Registration 52PM dated 13 March 1993
Notification 1489 regarding Categories of Goods and Investment
ratio open to foreign investors for investment in the Establishment of
import business units for wholesales in the Lao PDR dated 20 July
2012
75
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
76
Part 2
Selected key issues in retail
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
77
VIETNAM
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
VIETNAM-MARKET ACCESS TO TRADERS
Direct investment (100 foreign owned or joint venture) or Indirect
investment (franchise nominee-proxies Structure)
Definition of ldquoretailingrdquo the activity of selling [purchased] goods
directly to final customers
Definition of ldquooutletrdquo a unit owned by an enterprise for the purpose of
conducting retailing activities
Permitted goods retail of all legally imported and domestically
produced products (except tobacco pharmaceuticals crude oil
processed oil books newspapers magazines precious stones etc)
78
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
VIETNAM-MARKET ACCESS TO TRADERS CONTrsquoD
Direct investment 100 foreign owned or JV - initial license for first outlet (investment certificate)
‒ Application to local authority approval MOIT required (lengthy)
‒ Criteria (i) Governmentrsquos policies (ii) amount of investment capital and contributed capital (iii) capacity and experience of the investor (iv) business plan and operation results of investorrsquos existing enterprises (v) master plan of the relevant provincecity
‒ Economic Need Test (ENT) for second outlet and having an area of more than 500m2
ENT permission considered on a case by case basis depending on number of retail outlets market stability population density in the provincecity of proposed additional retail outlet and consistency with the master plan of such provincecity
Indirect investment - Franchising commonly used in Vietnam Need to register with MOITDOIT and
Indirect investment - Nomineeproxy structures also used in Vietnam but this structure presents uncertain legal validity and risk of misappropriation
79
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
VIETNAM-PROTECTION OF INTELLECTUAL PROPERTY (IP)
Adopt and implement a strategy
Protect trademarks domain names designs sensitive information
Obtain from your local partners to protect your and their IP
Practical issues ndash protect your brand consumers rights understand
and anticipate rumors know and work with local authorities and
restrictions on advertisement
80
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
VIETNAM-MARKET ACCESS TO DEVELOPERS
Lease land from the State or infrastructure developer
Necessity to undertake a land due diligence to make sure the land
location is appropriate
Approval in principle on the project location
Conditions to develop a real estate project such as master plan
architecture design compliance
Land Use Right granted in compliance with the Investment Certificate
81
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
82
CAMBODIA
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
CAMBODIA-SECTORAL OVERVIEW
No specific sectorial legal framework
Freehold or leasing
No specific land use type with respect to certificates of titlezoning
classification
Several draft laws draft lawamendments to the Law on Investment
Draft Sub-Decree on Urbanization of the capital city towns and
urban areas Draft Law on Construction Draft Law on Environment
Impact Assessment Draft Consumer Protection Law and Draft E-
Commerce Law
83
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
CAMBODIA-MARKET ACCESS TO TRADERS
Trading of goods 100 foreign owned entity possible
Food and beverage ndash restaurants cafes bakeries etc 100
foreign owned entity possible
Franchising ndash possible (and common) but no specific franchise law
yet in Franchising is governed mainly by the provisions of the Civil
Code
Registration of trademark possible (including exclusive trademark
licensing right) under the Law on Marks Trade Names and Acts of
Unfair Competition
84
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
CAMBODIA-PROTECTION OF IP
bull Trademark law is the most developed intellectual property system
but enforcement remains problematic due to nascent (but
developing) legal infrastructure and government authority resources
bull Protection of patents industrial designs and models are less
developed but government authority understanding and international
interest grows year on year
bull Risk local company registers marks although it is not the rightful
owner
bull Strategy first register trademark in Cambodia regardless of any
presence in Cambodia Proactive vigilance by IP proprietor of
infringement is key
85
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
CAMBODIA-MARKET ACCESS TO DEVELOPERS
Joint Venture with no more than 49 foreign capital can own land
Landholding structuring possible (different classes of shares +
protection documents + mortgage)
Alternative long term lease up to 50 year-term It is required to be
registered with Cadastral authorities to be enforceable against third
parties
86
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
87
LAOS PDR
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
LAOS-MARKET ACCESS TO TRADERS
ldquo Retail Sale Businessrdquo means the final stage of the business of
goods distribution to individuals or households for consumption
ldquoWholesale Businessrdquo means a goods distribution business to people
or legal entities for the purpose of further production wholesale or
retail
The 2012 Retail Decision states that Retail Sales Business is
reserved only for Lao citizens
88
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
LAOS-MARKET ACCESS TO TRADERS CONTrsquoD
For Retail Sales Business foreign individuals and legal entities are
only permitted to
conduct the distribution of goods within the Lao PDR through
distributors or franchisees of Lao nationality residing in Lao
PDR or
Invest or enter into a joint venture for the construction of new
forms of modern sales establishments for business units which
are to be reserved for trading such as hypermarkets
supermarkets shopping centers or malls in accordance with the
Investment Promotion Law and related laws and regulations
89
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
LAOS-PROTECTION OF IP
Registration of industrial property at Ministry of Science and
Technology
IP includes patents petty patents industrial designs trademarks
trade names trade secrets etc
Owner of IP enjoys the benefits derived from the IP transfer all or
part of their IP rights to other person by sale exchange lease or
assignment permit other persons to seek benefits over all or part of
the IP bequeath and assign the rights in the IP to other person and
protect the IP from violation by other parties
Strategy first register trademark in the Lao PDR regardless of any
presence in the Lao PDR
90
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
LAOS-MARKET ACCESS TO DEVELOPERS
Land ownership is not an option
Land lease possible
30 years from private owners
50 years from the Government (concessions)
75 years in specific economic zones and special economic
zones
Under 2009 Investment Promotion Law foreign-invested entities with
a minimum of USD 500000 equity investment may hold ldquoland use
rightsrdquo but not fully implemented
91
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
LAOS-STRUCTURING OPTIONS
Supply Chain Management Contract Under this structure a foreign
owned entity provides supply chain management services to a locally
owned entity These may include the lease or sub-lease of retail or
wholesale premises contractual licensing of intellectual property
licensed rights to IT systems and marketing methodologies
warehousing accounting and administrative services The fees payable
to the supply chain management services may be structured so that they
mirror what the foreign entity might have earned by way of dividends had
it been entitled to enjoy equity participation in the locally owned entity
Investing in SEZ The foreign owned supply chain if incorporated in a
Special Economic Zone (ldquoSEZrdquo) in the Lao PDR will be eligible for
significant tax benefits and may also obtain an exemption from the
wholesale and retail restrictions described above
92
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
THANK YOU
93
Tran Thi Vu Hanh Partner Vietnam
Deputy Managing Director Ho Chi Minh City Office
hanhtrandfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom
94
VIETNAM RETAIL MARKET
Excellence middot Creativity middot Trust Since 1994
BANGLADESH | CAMBODIA | INDONESIA | LAO PDR | MYANMAR | SINGAPORE | THAILAND | VIETNAM
wwwdfdlcom