Retailers in Hanoi are facing a troubling trend as countless shops close their doors amid a surge in e-commerce, increased taxes, and a rigorous crackdown on counterfeit goods. The booming online marketplace has outpaced traditional retail, leading many store owners to rethink their business strategies and pivot away from brick-and-mortar operations.
Chua Boc Street, a once bustling hub for fashion lovers, has become eerily quiet over recent months. Once lined with vibrant shops and throngs of customers, it now showcases “For Rent” signs reminiscent of the social distancing days during the pandemic. With rental prices topping VND1 million (about US$38) per square meter, many retailers are finding it hard to cope with the changing economic environment.
The shuttering of storefronts extends to Pham Ngoc Thach Street and Nguyen Trai Street, where multiple vendors have resorted to eye-catching discount sales, likely their last cry for continued operations. Hang Bong Street—popular among tourists—is also seeing significant closures as stores slash prices to liquidate inventory, offering bargains as low as VND50,000.
Not all hope is lost for some retailers, though. A growing number are choosing to maintain a virtual presence; opening their physical locations just enough to manage e-commerce deliveries, only to quickly lock up again. “We are still selling, but mostly online,” shared a vendor from Dao Duy Anh Street, where closures are rampant.
Market authorities’ intensified scrutiny over product origins to combat counterfeit goods has made trading increasingly challenging. More troubling is the recent tax policy that requires sellers with revenues exceeding VND1 billion to pay a variable percentage instead of a fixed fee. The fear of rising operational costs has driven many to consider shutting down entirely.
“I closed my shop last week due to the stricter tax laws and concerns over product authenticity,” lamented a distressed retailer.
While some shops have closed, others have resorted to the less traditional approach of operating in stealth, selling their wares online but keeping their physical appearances under wraps—an ingenious yet risky adaptation to an ever-evolving marketplace.
As Hanoi’s retail landscape transforms, it seems that adaptability is not just important; it’s essential for survival.
What is driving the closures of retail stores in Hanoi?
The closures are predominantly due to the explosive growth of e-commerce, higher taxes, and a government crackdown on counterfeit goods, leading many retailers to rethink their business models.
How are some retailers adapting to the changing market?
Many retailers are shifting their operations online, reducing their physical store hours, and handling customer interactions primarily through e-commerce platforms.
What tax changes are impacting Hanoi’s retailers?
A new tax policy requires sellers with revenues of VND1 billion or above to pay a percentage based on their income, rather than a flat rate—prompting fears of increased costs and potential shutdowns.
