Innovate your approach to breakthrough

Racing to "offer big deals"

Chinese newspaper Jing Daily has just reported that DFS, a retail company specializing in the tourism segment under the Moët Hennessy Louis Vuitton Group (LVMH), is planning to open a 7-star luxury duty-free shopping and entertainment complex on Hainan Island (China). Holding more than 420 duty-free retail locations at airports as well as in resorts and hotels, DFS has ambitions to conquer the world's number 1 luxury goods "crazy" market after the complex is formed in 2026.

This "super-giant" project is expected to be located in Sanya, right on Yalong Bay, one of the most beautiful bays of Hainan Island. DFS Yalong Bay is being studied with a scale of 128,000 m² (equivalent to Marina Bay Sands in Singapore), where LVMH's brands will be located, including fashion , accessories, cosmetics, perfumes, watches, jewelry and high-class restaurants and food courts. LVMH estimates that this campus will attract more than 16 million visitors per year by 2030, becoming a rival to Hong Kong, Macau and Singapore.

Vietnam is increasingly under the "heat" of the competition for international visitors among tourism- developed countries.

According to Jing Daily, DFS and LVMH are investing heavily in Hainan Island because it is being planned to become a new shopping paradise for the billion-people market. "China's Hawaii" is becoming a magnet for customers with deep pockets as it gathers the world's largest duty-free shopping centers with about 800 brands, favored by the government with an expanded duty-free policy. The prices of products sold here will be 10-40% lower than those on the mainland.

During the pandemic years, due to the pursuit of zero Covid policy, international tourists almost did not come to Hainan Island. In 2020, the island welcomed only 200,000 visitors. The number of domestic tourists decreased from 81.6 million to 64.3 million. However, thanks to the policy of increasing the duty-free shopping quota for domestic tourists, tourism revenue and duty-free revenue increased by 30% compared to the year before the pandemic; at the same time, Hainan's GDP increased by 4.2%, twice the growth rate of China at 2.3%. However, the government of this country is still not satisfied and is continuing to try to invite many of the world's leading enterprises to invest here in high-class products. When planning to develop DFS Yalong Bay, LVMH received a commitment from Beijing that this would be the only luxury shopping complex on Hainan Island.

With incentives from Beijing, LVMH has boldly promoted the construction of a 7-star luxury complex. International media commented that the Chinese government's policy has two main points. The first is to attract international tourists, the second is to encourage mainlanders to travel and shop domestically, limiting the "bleeding" of foreign currency.

DFS Yalong Bay perspective, the project will increase tourism competition pressure with the region

Similarly, two days ago, the Thai government also issued a new regulation, piloting the operation of allowing restaurants and entertainment venues such as clubs and karaoke bars in some provinces and cities such as Bangkok, Phuket, Pattaya, Chiang Mai and Samui to open until 4am, starting from December 15; at the same time, the government plans to organize about 3,000 sports and cultural events to increase tourism revenue and stimulate local economic development.

Thailand, on the one hand, plans to extend the visa exemption period for tourists to accelerate the attraction of international visitors; on the other hand, it adjusts many policies and builds new products not only to serve international tourists but also to meet the needs of the people in the context of reducing spending on foreign travel. Meanwhile, Taiwan chooses to give cash to tourists to stimulate tourism.

No risk taking, no breakthrough required

Despite the advantage of opening first, Vietnam is still struggling to find a solution to the problem of being late, how to jump ahead. We exceeded the target of welcoming international visitors 3 months before the end of the year, but when Vietnam increased to 12-13 million visitors, Thailand surpassed the 23 million international visitor mark from mid-November and is expecting to finish this year with 28 million visitors. It is worth mentioning that while international visitors have not yet recovered, the domestic market is gradually cooling down. High airfares, no new attractive products, plus a few "hot" destinations losing points because of "overpriced" prices, security... unintentionally pushing people to travel abroad.

With regret, watching countries surpass Vietnam one after another, then looking to LVMH to pour billions of dollars into Hainan Island, Mr. Johnathan Hanh Nguyen, Chairman of the Inter-Pacific Group (IPPG), worried: Hainan Island is located near Vietnam, has enough natural conditions to be able to develop almost all types of services, from resort tourism, shopping, exploration, entertainment, and healthcare. On this side, Singapore is also a shopping paradise, looking over to the other side, we see Thailand - a rival of Vietnam tourism - has surpassed to become an entertainment paradise... Clearly, Vietnam tourism is falling behind its heavyweight competitors and it will be increasingly difficult to surpass it, unless we have more innovative policies and more unique products.

It is even more regrettable that the person who was known as the "king of luxury goods" a decade ago had the ambition to open large shopping centers and duty-free shops on the street for tourists to spend freely in many localities. IPPG even negotiated with suppliers to have the same selling price as in France, Singapore and lower than in China, even though it was retail and taxed. However, IPPG's projects, plans, ideas, and dedication to investing in large-scale constructions and unique products to "pick the wallets" of tourists like in Singapore, Thailand, Hainan Island... were "red carpet" encouraged in every locality, but when put into practice, they encountered many difficulties.

Dr. Vo Tri Thanh, former Deputy Director of the Central Institute for Economic Management, acknowledged that the barriers and shortcomings affecting the recovery and development speed of Vietnam's tourism have been fully identified by the Government and competent authorities. Everyone understands that there are still many legal and institutional problems that prevent tourism from making a breakthrough. There has been a strong involvement from all levels and sectors to complete complete projects such as duty-free zones, new types of products, etc. However, the implementation in reality is still slow. The problem is that there must be a new approach in perception, legality, institutions, implementation, etc.

To break through, you have to accept a certain level of risk. You have to change your thinking, approach and way of doing things.

Dr. Vo Tri Thanh, former Deputy Director of the Central Institute for Economic Management Research

"There are things that are not yet available, if we demand to fully complete the institutions and legal framework, it will take a lot of time. There are new models that we do not have experience in, so we require the spirit of daring to do and daring to decide on the basis of making the best efforts for projects that are evaluated and viewed from many perspectives. We cannot just demand 100% perfection. In other words, if we want to break through, we must accept a certain level of risk. We must change from thinking to approach and way of doing," Dr. Vo Tri Thanh emphasized.

"Every step we hesitate is a time we lose an opportunity to another destination. In business, opportunity is the most important factor. Foreign investors will not wait for us forever. The slower we are, the more limited our chances of getting ahead."

Mr. Johnathan Hanh Nguyen , Chairman of Imex Pan Pacific Group (IPPG)

Source link: https://thanhnien.vn/doi-moi-cach-tiep-can-de-but-pha-185231204232555726.htm