HO CHI MINH CITY — Bustling, tree-lined Dong Khoi Street, the central shopping hub of Vietnam's economic capital, buzzes with sidewalk hawkers, busy tourist stores and the constant thrum of passing motorbikes.
But recently there have been some changes to the landscape. At the corner of Le Loi Street, a one-story-high Louis Vuitton advertisement dominates the facade of Opera View, a retail complex opening next month that will house the brand's second Vietnam boutique as well as stores such as Burberry, Ermenegildo Zegna and Lacoste. Just down the street, there is a promise of more changes to come: An enormous brown storefront proclaims "Gucci: Opening Soon."
Vietnam is quickly becoming one of the new hot spots for retailers, but the development signals a more significant trend. Brands in Asia, previously focused on building up their presence in major hubs such as Tokyo, Hong Kong and Singapore, are putting more emphasis on expanding into cities that were once regarded as second- or third-tier. Markets like Ho Chi Minh City, Kuala Lumpur in Malaysia and Jakarta, Indonesia, and — even more prominently — more than a dozen cities across China, such as Kunming, Shenyang and Chengdu, are now garnering keen attention from brands eager to infiltrate every corner of the increasingly wealthy region.
"Many of these cities are becoming so important that it is not accurate to classify them as ‘secondary' anymore," noted Nash Benjamin, chief executive officer of FJ Benjamin Holdings, a Singapore-based firm that operates various retail outlets across Southeast Asia for brands such as Gap, Guess and Celine, and will launch the region's first Banana Republic store in Jakarta on May 11. "The situation is dramatically different than it was five years ago. They are strong markets and they are still growing."
But the rapid development also brings new hurdles, particularly from a marketing perspective. With so many countries in development and retailers moving in, brands are constantly faced with finding the best way to stand out among the pack, particularly to consumers who may only be marginally aware of them. To reach out to new customers, many brands have focused on localized efforts — such as in-store events, promotions and other activities."The key to marketing in these cities is developing our knowledge of each locale and adapting [our strategies] to that," said Maxime Elgue, managing director for Cartier Far East, which has been on an expansion drive and now maintains more than 15 stores in China alone. "The first step [when entering a new market] is developing a customer database and identifying who the potential customers are. The next step is finding ways to bring them into the store."
Cartier is among the most active brands focused on expansion in the region, especially in China, where markets like Hangzhou, Chengdu, Dalian and Harbin — all cities of more than six million residents, on par with the size of Hong Kong — have become the new focus for retailers. It's no longer a case of always being confined to the lobby of a five-star hotel; a surge of major retail developments in these cities recently has opened up the possibilities for greater expansion.
"The development of these markets has really been parallel to the development of the retail environments in them," said Melvin Chua, the managing director of the Shanghai-based firm Ink Pak, which has worked with brands like Salvatore Ferragamo and Armani to organize events in second-tier markets across China. "Even in just the past year, they have grown considerably."
Chua said the number of events his firm handles in second-tier cities has risen along with the number of stores. For now, marketing activities tend to be smaller, lower-key events — a more intimate environment than the extravaganzas that are common in Shanghai or Hong Kong — and aimed at enticing customers to come and explore the store. Some efforts are aimed at bolstering brand education: Tod's, for example, recently brought a team of Italian artisans on a tour across China, holding in-store events so consumers could see the craftsmen in action.
"Often, we are building our brand awareness from scratch in these cities and our marketing strategies reflect that," said Sabine Brunner-Franzosi, the general manager of Asia-Pacific for Tod's. "In Hong Kong, we might just send out a mailer with a photo advertisement. But in China, any mailer we send will be much more detailed. We always do everything we can to repeat as much as we can about Tod's — who we are, our history, our products, our celebrities. It is important for new customers to understand who we are and why they should choose us [over another brand]."The effort seems to be paying off. Executives from various brands say that sales in second-tier cities are strong, and they expect it won't be long before revenues from stores in Harbin or Hanoi could rival a store in a first-tier market.
"When you look at many of these markets, just 10 to 15 years ago it was a struggle for many people just to make ends meet," said Benjamin. "For years, a lot of these people could not get anything they wanted, and now they want to get it — and fast. They are making up for lost time."
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews