Van’s shop is a 15 square meter room located on the third floor of a house in a small alley that opens on Cach MangThang Tam Street in downtown Saigon. The house has eight other rental rooms.

 

Van and her friends are doing a new kind of business for Vietnam. The products she sells are sourced from China or South Korea. Because the shop is so tiny, only a few items can be displayed and visitors have to view the rest on a computer. Van will only show customers the real products after they express serious interest.

 

Though tiny, Van’s shop has many customers because her prices are always lower than at markets or trade centres. For example, her three models of handbags are 400,000-500,000 less than in shops on Tran Hung Dao or Cong Quynh streets.

 

Van rents her retail shop for three million dong a month --  higher than the rent for a normal room, but much lower than the lease for a street-front shop.

 

According to Saigon Tiep thi newspaper, there are already fifty shops like Van’s in HCM City, all doing very well. People now are keen to purchase products in small shops like these, because the prices are low.  The sellers can offer lower prices because they do not have to pay tax or high rent for a retail space. Moreover, the products are brought into Vietnam by individuals as personal items, so they are not taxed.

 

A shop at the Ngo Gia Tu apartment bloc, for example, is well known for its audio appliances, all brought across the border by individuals, not through official channels. The products here are always priced 800,000-1.5 million dong lower than at home appliance centres.

 

Other well known addresses for inexpensive imported electronics are shops located in a small alley off Le Loi Street in Go Vap district and in the D2 bloc of Van Thanh area.

 

Buyers of cosmetics and dairy products find products they want in the alleys of Hong Ha, Hat Giang and Bach Dang Street in Tan Binh district. A small alley off Le Van Sy Street alone has three shops.

 

 

Cincinnati, a small shop in the Dong Khoi apartment block that sells fashionable leather handbags, is well known by models and other fashion-conscious people for its products with new designs and low prices. If the monthly rent for a small shop on Dong Khoi street is at least $5,000, then $1,200 for shop rental seems like a good deal. Yet, if compared to the rent charged for shops on other streets, even such lower rates appear high in comparison.

 

The apartment blocks on Dong Khoi and Nguyen Hue alone have some 10 shops of this kind. Tuyet Hien, who sells Australian, South Korean and New Zealand dairy products, thinks that setting up stores on the upper stories of apartment blocks is the best solution.

 

“My products are those carried by individuals from foreign countries, so the supply is not stable,” Hien explains.  “If I rent in a classy location, I will have to deposit millions of dong for three to five months’ rent. I don’t have a distribution license, either. Thus it’s better to take orders through the Internet and over the telephone.”

 

The owners of fashion shops all have their own websites to introduce their merchandise. Buyers are not required to pay in advance; only a 50,000 dong deposit is required. Customers can have their purchases either delivered to a requested address or they can pick them up at the shop in person.