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Vietnam retailers go up, go deep, and online to reach tight pockets

Shops line up on an alley in Ho Chi Minh City. Photo courtesy of Saigon Tiep Thi

Retailers in Ho Chi Minh City are choosing high floors or those in alleys to cut space rent, making sure they still profit or at least survive the dog days of consumption.

Nguyen Hoang, owner of a café and cake shop, recently rented space on the first floor of an apartment building for around VND10 million (US$474) a month.

"I can make a little profit with that expense," he said.

Hoang said he would have to pay at least six times more to rent a similar or smaller space on the ground floor, according to a Monday report by Saigon Tiep Thi.

Dung, who has been retailing for many years, said rent accounts for nearly 30-50 percent of business costs, so one can easily put themselves in the red without careful calculations.

A fashion shop owner named Hoa just moved into a small space in an alley to half her ground rent, after a year of paying VND25 million a month for 40 square meters.

Hoa said she only made small profits during the high season, which was a few months at the year's end.

"There was too much pressure back then, I would plunge into making money for the next month's rent right after paying the current rent.

"Since moving into the alley, I've been able to breath."

Going off the shopping boulevard radar also requires retailers to alter their advertisement methods.

Most of them have resorted to the Internet, especially Facebook, setting up websites or fan pages for their businesses and building personal signatures online.

Hoang said his first-floor shop was only visited by friends at the beginning, and some day no one came at all.

Then he set up a Facebook page, posting photos of products and customers as well as a "story of the day," which is sometimes related to the shop and sometimes not.

"You need to have special tricks and be more interactive with the customers every day," he said.

Hoang's trick is to make his customers feel like they are coming home by serving hot cakes made on the spot by his wife, who also teaches baking and rents out the oven plus instruction if a customer wants to make some cakes and invites their friends over to the shop.

His shop is designed like a house with a dining room, kitchen, reading room, and a garden.

The Huu, owner of a clothes shop on a small street, said she used to sell her products online and now half of the customers of her shop are her old online customers who have spread the word to the other half.

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