Internship Report - Market research of lotte center hanoi

CONTENTS
PREFACE 1
2.1 Display 16
2.2 Policies 18
2.3 Location 18
REFERENCE 26
APPENDIX
PREFACE
In traditional marketing, the final target of doing business is to sell as many products
and gain as high profit as possible. At first, the business philosophy of marketing is
just to improve production and distribution efficiency in order to make products and
services available and affordable to customers. However, as customers’ demand and
taste changed, this philosophy turned out to be ineffective and companies had to
meliorate their product quality and features. When revenue and profit of the
companies decreased even when they had provided products and services of good
quality, they reckoned that it was necessary to invest in aggressive selling teams and
promotion efforts, in order to compete in the market which seemed to be saturated. All
these marketing orientations have just focused on companies themselves and products
and services they provide, and companies’ benefits are put at the top.
On the contrary, modern marketing concept says that companies should understand
customers and gain profits through customer satisfaction, delivering desired
satisfactions more effectively and efficiently than competitors do. Furthermore, they
should be interested in maintaining and improving consumers’ and society’s well-
being.
Today, companies have grasped the preeminence of the modern marketing concept
and also understand more and more about the important role, and heavy impacts of
marketing tools in achieving their marketing objectives; therefore, they have paid
much attention to market research.
Market research of Lotte Center Hanoi
Coralis Vietnam, a company acquired by Lotte Group, also understand this and has
conducted many market researches to complete the design and construction of the

Lotte Center Hanoi, and fully exploit this business center in the near future.
Due to the limitation of this report, I just focus on the market research on the future
demand and trend for clothes which could be available in stores of Lotte Center Hanoi
by the year 2013. The first chapter will provide you with a brief introduction of the
company. The next chapters will deal with the process and results of the market
research.
I would like to express my sincere thanks to Lotte Center Hanoi for their supporting
materials, helpful suggestions, and good learning environment during my internship.
Particularly, with the close instruction of my lecturer – Ms. Pham Thu Huong, I had a
big chance to improve my knowledge in Marketing, and to sharpen my researching,
analyzing and reporting skills.
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 2
Market research of Lotte Center Hanoi
I. Introduction
1. History and organizational structure of Lotte Center Hanoi
In 2005, Coralis Vietnam Co. Ltd was in charge of managing the capital from Coralis
S.A of Luxembourg for the project of the Hanoi City Complex. However, facing up
with some difficulties in gathering capital, the project was delayed for over 4 years.
Finally, Coralis was acquired by Lotte Group in September 2009.
Being interested in the construction area, from September 2009, Lotte Group
reinvested in the project of Hanoi City Complex with the total capital of over $400
million
1
, and the building was given another name Lotte Center Hanoi.
As mentioned above, Lotte Group has just taken over this project for over 9 months
(from the November 2009), and it is still in progress, so the company has a simple
organizational structure composed of five departments: Human Resource and Admin;
Marketing; Accounting; Information Technology, and Project Management.
The Human Resource Department is charge of managing and evaluating weekly and
quarterly performance, working progress of both local and foreign staffs.

The IT Department of the company just contains one employee who is responsible for
making and trying software for the company. Besides, he also has to create an
information sharing system for both internal and external users to access when finding
data and information.
The Project Management Department is the most hard-working division in the
company. They have to deal with many documents, drafts and directly work with
Lotte CM and Lotte E&C, the parent company in South Korea as well as local
authorities. This department is under the direct supervision of the General Director.
Studying and helping the company to have the clear understanding about the trend and
demand of customers, exact forecasts of all the markets, and effective and efficient
strategic plans is the main works of Marketing Department.
1
/>Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 3
Market research of Lotte Center Hanoi
Accounting Department is the most important division of the company. Most of the
company’s operation depends much on it. All departments, from HR, IT to PM, have
a close relationship with this department.
The company is under the surveillance of the highest senior manager – the General
Director. Each employee is supervised by his/her manager, and report directly to
him/her, and their work progress must be presented to the whole company on the
Monday morning every week. The best performer of the week will be awarded with a
small gift, praised before the whole company’s presence.
Figure 1: Company structure of Lotte Center Hanoi
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 4
GENERAL
DIRECTOR
HUMAN
RESOURCE &
ADMIN
MARKETING ACCOUNTING

INFORMATION
TECHONOLOGY
PROJECT
MANAGEMENT
STRUCTURE OF LOTTE CENTER HANOI
Market research of Lotte Center Hanoi
(Human Resource and Admininistration Department – Lotte Center Hanoi)
2. Business activities and business results
Lotte Group has become a familiar name in Vietnam with eight sub-companies
running different businesses, i.e. Lotteria Vietnam, Lotte Vietnam, Lotte Vietnam
shopping, Lotte sea logistic, Lotte Vina International, Lotte Cinema Vietnam, Lotte
E&C, and Lotte Center Hanoi
2
. Lotte Center Hanoi is responsible for Managing &
Exploiting future Business Center, which was under the control of Coralis Vietnam
Co., Ltd more than 4 years ago.
Lotte is one of the market leaders in confectionery and foods; however, construction is
also one of their priorities. Obviously, Lotte is not a property investor; therefore, they
do not fund capital to build this Business Center for sale. Because of the lack of
capital of Daewoo Group, after being delayed over 4 years, Hanoi City Complex
project was restarted in October 2009, and renamed Lotte Center Hanoi. This business
center is now commenced by Construction Management and Lotte E&C– two of the
lower levels in the organizational hierarchy of Lotte Group both in Korea and
Vietnam.
3. Developing plans of the company
The initial total capital of this project was just $115 million; however, during the
construction, they have to supplement more finance to reinvest more work items;
therefore, the estimated capital now has increased over $400 million. Particularly, up
to June 2010 Lotte Group had transferred $30 million to Lotte Center Hanoi.
The company has tried to finish the project before the end of 2012; however, due to

some obstacles when applying licenses, the project can only be finished and go into
operation until the middle of 2013
3
. Besides, Lotte Group can make arrangement for
their own capital, so the company just sells a small quantity, and the remaining will be
offered for their own business activities, in fact they use this building for their long-
term purpose – expand their distribution network in Vietnam, and set up business by
2
/>3
/>Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 5
Market research of Lotte Center Hanoi
themselves. Moreover, instead of having the external consultants or partners to
manage or promote their goods or services, Lotte will directly operate and exploit this
building.
Established in 1965, Lotte is running its business in many countries like Russia,
China, India, and Vietnam is one of the most important markets. Lotte aims to enter
the top ten economic group of Asia by 2018
4
.
4
/>Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 6
Market research of Lotte Center Hanoi
II. Analysis of the demand for Business Centers in Vietnam
1. Overview of Vietnamese market
Due to the fast speed of urbanization and higher income level in Vietnam, there is a
trend of demolishing traditional markets, and constructing large business centers on
the old ground to take full commercial advantage of these places.
Vietnamese retail market is an active and potential destination for investors with
average growth rate of 20% per year, young demographic, middle class and the
average income has quickly increased in recent years.

Besides, traditional retail trade accounts for the major proportion of the total retail
revenue; therefore, it is still an open-end market for high-grade retail channels,
especially in big cities like Hanoi, Ho Chi Minh City, Haiphong, etc.
Moreover, a positive sign is that the government is planning to reduce lending rate to
12 – 13%
5
in accordance with Decree 23/Resolution-Government
6
, which is expected
to ease financing for condominium purchase, and consequently increases residential
demand.
Furthermore, strong demand from local companies and/or from long term leases will
continue to be the most significant trend in the office market. Office demand is
expected to be string over upcoming quarters, though supply continues to outpace
demand.
According to CBRE, strong demand for serviced apartments has remained stable in
the next few years because of the stably strong consumer’s budgets allocated for
accommodation.
In Vietnam overall, tourism has fuelled strong demand as the nation saw an increase
in the number of international arrivals by 32.6%
7
in the first six months of the year, to
5
Second Quarter 2010 Hanoi Property Market Review - CBRE
6
Second Quarter 2010 Hanoi Property Market Review - CBRE
7
Second Quarter 2010 Hanoi Property Market Review - CBRE
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 7
Market research of Lotte Center Hanoi

2.5
8
million participations. Besides, the anticipation of the Thang Long – Hanoi
millennium anniversary as well as other promotional packages supported by Vietnam
Tourism Administration taking place during the third and fourth quarters of 2010 are
expected to bring an upswing in the number of tourist arrivals and the hotel market
can expect improvements in occupancy rates and RevPARs.
Resulting from these aspects, it is clear that Vietnam is a potential market for foreign
investors as well as local ones.
2. The role of Business Center for Vietnamese economic growth
With increasing number of licensed projects coming to Vietnam, an influx of
foreigners working for multi-national corporations will enter the market as
prospective buyers and tenants, and demand high-quality accommodations.
When business centers want to avoid legal issues in the host country, they can acquire
a domestic company, and this activity can help host country in many aspects. For
example, if they want to do business in Vietnam, they have to sell not only famous
foreign brands but they also have to pay much attention to domestic brands and
companies. Under the pressure of quality competition, local brands have to try their
best to improve their products and services to compete with strong ones, and the
consumed volume of local residents will accordingly increase if they highly appreciate
local brands. The final target is to improve the competitive ability for domestic
brands, and provide customers with the best products and services.
Competition is expected to be more intense in the future, forcing developers to
differentiate projects by offering design and construction of better quality at the same
price, a commitment to development progress. In the upcoming years, competition
among developers will create more choices for prospective buyers.
Moreover, the more goods and service customers are provided, the higher the
possibility of their spending; the more money invested in production, and the more
taxes Government can impose on business centers. Hence, when foreigners come to
8

Second Quarter 2010 Hanoi Property Market Review - CBRE
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 8
Market research of Lotte Center Hanoi
work and live in Vietnam, they will demand and consume a significant quantity of
goods and services, this will help to surge the economic growth of both local area and
nationwide.
Continued spending on construction and infrastructure projects that are expected to be
completed before the October deadline of Hanoi’s Thang Long Festival will support
further GDP growth.
3. The role of market research for the development of Lotte Center Hanoi
Tourism promotion and increased flight traffic will support the growth in the tourism
sector. The additional flights on the Hanoi – Ho Chi Minh City, and Hanoi – Danang
routes will increase the volume of domestic travelers to Hanoi. Besides, international
arrivals to Hanoi reached 302,000 participations in the second quarter of 2010 –
increased 31.87%
9
year over year. This positive information would be helpful for the
company to speed up their Business Center project to meet the potential huge demand
for hotel and department stores in the future.
Retail sales revenue soared considerably in the first six month of 2010, grew by
28.2%
10
year over year, showing the strength of consumer demand. Increasing sales
and numbers of retail outlets indicate the steady growth of Hanoi’s retail sector in the
coming quarters.
In recent years, when more European expatriates had entered the market, and the
competition from the abundant supply of villas and terraced housing became harsher,
serviced apartment units with more than three bedrooms had accounted for 70%
11
of

total vacant units. Hence, it is easily understandable to realize that truly difficult
competitions come from substitute markets (villas, standard apartments), and the
increase in supply from major future projects. This source of competition will stabilize
or even reduce lucrative rent of many projects, especially those with limited services.
9
Second Quarter 2010 Hanoi Property Market Review - CBRE
10
Second Quarter 2010 Hanoi Property Market Review - CBRE
11
Second Quarter 2010 Hanoi Property Market Review - CBRE
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 9
Market research of Lotte Center Hanoi
Therefore, Lotte should consider and update more information about this issue to have
a suitable and modern design for Lotte Center Hanoi business center.
Furthermore, the company should also care for their two major rivals, i.e. Vincom
City Tower and Parkson. They are the two biggest and closest competitors of Lotte
Center Hanoi in terms of a complex of luxury office, department stores, and 5-star
hotel. Both these centers are famous for prestigious and fashionable brands which play
an important role in attracting the high number of visitors. These two centers;
however, are established and exploited in Vietnam longer than Lotte; therefore, Lotte
has to plan carefully to win customers when their building is completed in 2013.
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 10
Market research of Lotte Center Hanoi
III. Opportunities and threats for the development for Lotte Center Hanoi
1. Opportunities
During the first half of 2010, on the secondary market, asking price for condominium
for sale increased in all segments, i.e. rising 3% in the mid-end, high-end, and luxury
segment, and 9% in the low-end segment. Furthermore, the new Decree 23/2010/
Resolution-Government regulates the lending rate drop to 12 – 13%
12

(current rate: 15
– 17%
13
) to ease financing and boost residential demand. The sooner the company
finishes the building, the larger number of potential visitors they can win from the
market and their rivals.
Recently, the majority of enquiries were from European expatriates showing the
interest in serviced apartments units with more than three bedrooms accounted for
70%
14
of total vacant units gives a good opportunity to gain large profit when
exploiting Lotte Center Hanoi in the near future.
Domestic tourist arrivals numbered 14.8 millions participations in the first six months
2010 represents a 10%
15
increase year over year. Resulting from this strong
performance, Hanoi’s tourism posted positive growth rates of 12 and 13.5%
16
in the
number of foreign and domestic arrivals, respectively. In the next time, it is expected
to upswing in the number of tourist arrivals, and the hotel market can expect
improvements in occupancy rates and RevPARs.
2. Threats
12
Second Quarter 2010 Hanoi Property Market Review - CBRE
13
/>14
Second Quarter 2010 Hanoi Property Market Review - CBRE
15
Second Quarter 2010 Hanoi Property Market Review - CBRE

16
Second Quarter 2010 Hanoi Property Market Review - CBRE
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 11
Market research of Lotte Center Hanoi
More real shopping centers in the non-center business district opening over the next
three years may make the more saturated supply market in this area. Available stock
may create harsh competition among new projects being built. For example, a new
centers – Grand Plaza – will be opened in the 17
th
July 2010 with the luxury
department store, grade A offices, large plane of 16,000m
2 17
, and good infrastructure,
located at the convenient place, is actual a considerable contender for the company.
Increasing trend of combination of wet market and modern retail space (Hang Da and
Cua Nam markets) will create a safer and more hygienic environment as well as a new
shopping experience for consumers. Besides, Vietnamese people are still familiar with
traditional markets; therefore, that may be an observable competitor of the company in
terms of winning customers to visit stores in Lotte Center Hanoi.
It is unsafe to guarantee the strong demand or stable consumer’s budget for serviced
apartment or accommodation in a long time, because there are new projects expected
this year include the Keangnam Hanoi Landmark Tower which comes on stream in
the near future, makes the building market more saturated.
In recent years, there has been more international hoteliers invest and pursue big
construction projects in Hanoi like Accor, InterContinental, Marriott which will make
the business in luxury hotel more intense.
17
/>id14902/
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 12
Market research of Lotte Center Hanoi

IV. Analysis and assess the present and future for clothing market in Hanoi
1. Customers
1.1 Description
In order to strongly support for this report, a small survey was conducted with the
total sample of 44 people living in Hanoi, from 20 – 35 years old.
1.2 Result analysis
As mentioned above, Vietnam has about 60%
18
of population in the age of 20 – 35;
customers in this segment are very sensitive with fashion. Hence this is a potential
segment for fashionable business. A little change in fashionable trend in the market
may strongly affect them. The sophisticated demand around the world has heavily
influenced on the wearing style of Vietnamese young; consequently, they can spend
even more money on clothes than ever before. Besides, there are more and more
people with unrestricted budget for shopping who have high income from good jobs,
or stable income resource from their family. As a result, the increasing demand for
high quality clothes from famous brands is easily understandable.
Being sensitive with this lucrative trend, Lotte Center Hanoi had concentrated on
studying Hanoi clothing market. After researching a small group of customers and
getting data, there are 2 outstanding groups of customers that the company can pay
attention to in the future business.
1.1 .1 Medium income – young women from 20 – 35 years old
In general, the female in this aged group both in Hanoi and nationwide usually have
medium income ranged from VND 6 million to VND 8 million per month. Their
budget spent for shopping may be restricted for daily living, savings, and a small
budget for clothing. Under the restraint of remaining limited budget, they have to
consider how much they can put on purchasing some suits for themselves, and the
appropriateness between their limited fund and need. There are 65.4%
19
of asked

18
/>19
Survey for “Present and Future of clothing market in Hanoi”
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 13
Market research of Lotte Center Hanoi
women replied that they spend highest amount of VND 500,000
20
each time going
shopping.
Figure 2: Result of the survey “Present and future of clothing market in Hanoi”
In stead of showing the loyalty to a fix brand, the majority in this group usually go to
street stores which are more convenient to visit whenever they have free time or just
even finish working and on the way to their homes. In addition, these stores on the
street are favorable places to visit, and can provide customers with a wide range of
acceptable Chinese products with affordable price from VND 190,000 to VND
450,000
21
/item coming with acceptable quality.
Women in this segment usually wait for large discount of Vietnamese High quality
brands such as NEM, Ivy, or Chic land. The purchase is stronger in special events like
Tet Holiday, Christmas, Womens’ Days And there are 23.3%
22
of surveyed women
replied that they usually go shopping in their free time or in the weekends.
1.1.2 High income customers
20
Survey for “Present and Future of clothing market in Hanoi”
21
Survey for “Present and Future of clothing market in Hanoi”
22

Survey for “Present and Future of clothing market in Hanoi”
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 14
Market research of Lotte Center Hanoi
Our main customer in this segment may include successful businessmen with monthly
income of over VND 20 millions per month, the youth, and rich teenagers who have
money and want to purchase unique suit with reliable material and quality. With such
a budget, they usually go to shopping mall in which they can find the best-selling
items of famous brands. In addition, they are promised to get the authentic products
with the unique design and guaranteed quality.
The typical characteristic of this group is to be sensitive to the fashion, and show their
status and style; therefore, they are ready to purchase famous brands to differentiate
themselves with others. These customers in fact do not much care for money; they are
just interested in style and the reliability of the material. For example, a woman with
the salary of over VND 20 millions per month can visit and purchase some suits at
famous stores like NEM, Ivy or Alcado, and so on. Or even many teenagers “9X”
nowadays can spend up to hundreds of million on purchasing manual items or famous
brands to show their status and richness, and to be realized by the others. Besides,
many middle-aged women whose families have stable finance can freely spend money
on shopping at big business center. Using famous brands help them to show their
social ranks, and their awareness of fashionable trends.
According to many foreign managers’ viewpoint about Vietnamese buying behaviors,
it is up to 77%
23
of Vietnamese customers in comparison with 40%
24
of Asian ones are
interested in foreign brands. It is an acceptable explanation for the habbit of caring
others’ evaluation of the majority of Vietnamese.
Although the normal of each item is often of high price, for example, VND 1.5 – 2
25

milions per T-shirt, or VND 12 millions per dress, they do not hesitate to purchase 2-3
items each time going to shopping mall.
2. Competitors
23
/>24
/>25
/>Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 15
Market research of Lotte Center Hanoi
There are many business centers in Hanoi today, and many new redoubtable
competitors are coming on the stream like Hanoi Grand Plaza, Crowne Plaza or
Keangnam Hanoi Landmark Tower. These building can go into operational in the 2
nd
half 2010 and in 2011; therefore, Lotte Center Hanoi should pay much attention to
these rivals. Because of the limited framework, this report will just mention the
existing contenders of Lotte Center Hanoi in terms of department store for fashionable
clothes like Vincom and Parkson.
The reason why these two building centers are chosen as the main competitors of
Lotte Center Hanoi is the similarity in their functions, such as office or department
stores. The main task of this part is to analyze the competitive advantages of each
business center.
2.1 Display
The main customer segments that Lotte focus on are 20 – 35 year old women and high
income customers. Therefore, an observation was made to gather information related
to fashion stores in these two building, and then compare with Lotte Center Hanoi in
terms of display, brands doing business there, and the services they used to win
customers.
Shopping Paradise, Vincom Galleries, in which many famous female fashion brands
have concentrated like CK, D&G, Mango or Gucci and so on, have arranged the 2
nd
floor for women fashion store with many famed brands lying next together making a

group of famous brands which can satisfy the visiting and shopping demand of
international and domestic arrivals as well as local residents.
Like Vincom, Golden shopping mall – Parkson – also provides offices and department
stores for rent. Famous brands lease stores in the building and do their own business.
Under the pressure of quality, Parkson and Vincom have supplied customers with the
Hanoi biggest business complex to conveniently and comfortably facilitate shopping
by the logical arrangement and the selection of famed brands with good quality. For
example, Vincom has built an escalator system and aerial connectors to link the twin
towers to ease the shopping.
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 16
Market research of Lotte Center Hanoi
Clothes stores in these two centers are reasonably arranged in large and attractive
shelf spaces. Besides, they also reasonably and harmoniously order the images and
music in the store, create a luxury inside, suit with products, and make comfort for the
visitors and consumers.
Moreover, in both business centers, biggest brands have the most favorable places
with wide plane and good positions, and these places are certainly expensive. Despite
the monthly dizzily high rental, many famous brands are willing to hire with an
extremely high price to do their business. This means that the demand for luxury and
opulent department stores will still increase in the next years.
The main difference between these two trading centers is the way they do business
with their own department. Vincom only allow famous brands which can assure the
rigid requirement in terms of quality to lease the stores. They provide departments for
concerned brands with a very high monthly rental of from about $85-130/m
2 26
which
are their main periodical income.
In contrast, Parkson themselves hired the whole Viet Tower and do their own
business. They charge $120
27

/m
2
/month, and get the commission from the partners. If
25%
28
of the revenue of each partner is greater than the monthly rental, Pakrson will
take 25%
29
of revenue, and vice versa. The first 6 floors are used to deal in jewelry,
shoes, bags, sportswear, cosmetics, and clothes; and the remaining of the building is
for leasing office, hotel, and so on.
Both types of operation are successful with the higher profit and more customers go to
visit and go shopping. The rental price for department stores in these centers is very
high; however, many international brands as well as
Vietnam High Quality Brands are ready to jump to possess these convenient positions.
For instance, the famous French fashionable brand Everbest has recently opened a
26
/>27
/>28
/>29
/>Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 17
Market research of Lotte Center Hanoi
new store in the 2
nd
floor in Vincom Galleries to introduce their new items to the
connoisseur consumers in Vietnam. A typical example of Vietnam Values is Nino
Maxx who dares to hire a quite large store in Parkson.
2.2 Policies
Vincom or Parkson focus on supplying preferential treatments to attract customers by
some methods like large discount at the end of the season, customer card, accumulated

point to get gifts, and so on. Whereas other prestigious brand such as NEM has
different way to serve and satisfy their customers by providing customers with free
dry-clean and steamy ironing services. Before entering a new market, like other
fashion brands, this famed French brand had to study and understand the consuming
behavior of the majority of Vietnamese women.
While big foreign brands offer customers 5% - 50%
30
discount when the value of
purchased items is as large as regulated, other street stores in Boc Pagoda or Cau Giay
Streets often charge a higher price in comparison with the quality of the items and
usually do not offer discount. The price is usually high because it includes the taxes,
costs, rental, salary, and the profits.
2.3 Location
Being located in a quite busy center of Hanoi, and laying in the Ring Round No 1, in
which many large residential areas concentrate, and shopping demand is increasingly
higher, Vincom had gained much advantages and profit. Furthermore, 4 sides of
Vincom are at 4 most favorable streets with dense residential areas which can creates
a beautiful space and accessible communication for the whole building. In addition, it
is near to Sword Lake – center of the city, and bound around by many international
enterprises and embassies. These advantages can help Vincom in attracting more
customers.
30
/>hang-hiu-gim-gia-50-ti-vincom-parkson-ruby-plaza+vincom+gi%E1%BA%A3m+gi
%C3%A1&cd=7&hl=vi&ct=clnk&gl=vn
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 18
Market research of Lotte Center Hanoi
Whereas, Parkson with about 11,000m
2 31
of plane, located at the crossroad of Thai Ha
– Tay Son and Boc Pagoda Streets – an active clothing market, can attract thousands

of visitors and customers per day.
Our Lotte Center Hanoi is located in a center district of administration and economy.
The building is designed with two fine frontages on Kim Ma and Dao Tan Streets that
are quite ventilated for the customer to park their vehicles when going shopping.
Moreover, it lays in the axis that links the Old Quarter and dense residential areas.
Furthermore, this building stands near to five star hotel Daewoo, Australian and
Japanese Embassies which is the potential resource of high income customers. It is
clear that Lotte Center Hanoi has possessed a lucrative position in comparison with
other projects.
31
/>Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 19
Market research of Lotte Center Hanoi
V. Conclusion and recommendation
1. Assessing the demand for clothes in Hanoi
Owing to the progressively improved living standard in recent years, the demand for
clothes strongly increases. The persuasive proof for this consideration was tested
through the recent global financial downturn. Although the financial crisis has
significantly impacted on all aspects of life, the financial gain and demand of the high-
income group did not change so much but even higher. With the usual price of VND
1.5 million to VND 2 million per T-shirt, or VND 12million per dress of unique
designs and high quality, it is clear that only high-income customers dare to spend a
large amount of money on expensive suits at big shopping centers. From the above
analysis, the teenagers or women with high income, VIP customers from foreign
companies and embassies, and international travelers are the main customers that
Lotte Center Hanoi should seriously consider.
It is quite easy to realize the specific characteristics of the young from 20 – 35 years
old are youthful, active, and creative. No matter how expensive the items are, the
young can still spend a lot of money on purchasing if they are highly impressive.
Hence, it is intelligible when few items are consumed; the achieved revenue is still
always at a high level. Another factor which powerfully influences styles is the more

and more sophisticated and sensitive to fashionable changes of the young today. For
instance, just a little change in fashion tendency or external comments can easily
affect their thinking and behavior. Thus, the trend for consuming clothes from famous
brands at large department stores like Vincom, Parkson or Trang Tien Plaza is clearly
popular.
Obviously, large vacancy in luxury department has made Vietnam turn out to be an
attractive selection for international retailer groups who are interested in exploiting
this potential market. Thus, Lotte Center Hanoi should carefully consider the possible
and existing competitors in terms of department stores in Vietnam, the most
concerned market of Lotte Group. Existing competitors like Vincom or Parkson has
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 20
Market research of Lotte Center Hanoi
shown their success in dealing with famed fashion brands in just the first months
doing business. This is the reasonable cause for the increasing influx of big projects
into Hanoi and nationwide of foreign retail groups. In upcoming 5 years, many trading
centers will have been finished. For example, Grand Plaza will come on stream on
July 2010; another main rival is Keangnam Landmark Tower with the highest
building that will become operational in 2011. Those business centers including Lotte
Center Hanoi may become the first-rate destinations of world-class fashionable brands
in promoting their products to customers. Finding approach to compete with each
other, to create a unique style and feeling for customers are actually not easy for Lotte
Center Hanoi as well as other business centers.
2. How to address the demand
Vietnam is assessed to be a potential market with about 18%
32
of monthly income are
spent on clothing in 2008(Business Support Associates - BSA). This number
decreased by 2% during the financial crisis in 2008 – 2009 to 16%
33
in the 1

st
quarter
2010. However, it significantly rockets up by 23% to 39%
34
in the 2
nd
quarter 2010.
And the majority of this consumers is the high income customers who can spend
much money on those expensive suits.
Although the few items are sold, the high price of each item can promise the high
revenue. For example, with a famous brand, the profit is 250k/item – which is 50
times higher than the other brands.
Many foreign brands such as Calvin Klein, Guess, Dolce&Gabana, Mango, and
Giordano are really interested in Vietnamese market, and have opened many stores in
some big centers like Parkson or Vincom or Trang Tien Plaza. In fact they have been
very successful with the bigger and bigger market share just after a short time entering
into this market. Lotte Center Hanoi can think of signing contract with famous brands
mentioned above.
32
/>33
/>34
/>Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 21
Market research of Lotte Center Hanoi
It is clear that the intense appearance of Korean movies and music has made big
impacts on fashionable styles of Vietnamese consumers, especially, both the young
and women. However, the stronger they are influenced by those styles, the fewer
chances for the customers to get them. Actually, there are not so many Korean fashion
brands in Vietnam; hence, the possibility to possess a Korean suit is not easy. The
concerned customers can know and watch new items through fashionable magazines,
Internet, and so on. Therefore, if Lotte Center Hanoi can become the exclusive

distributor of Korean fashionable brands, and take advantages of its huge impacts on
Vietnamese customers by introducing Korean high quality brands to this lucrative
market, it can promise a very high profit for the company.
Furthermore, there is still a group of Vietnamese people want to support Vietnam
Values like Nino Maxx, An Phuoc Pierre Cardin, Viettien, Ivy, NEM, Chic land.
Hence, the company can think about signing contract with those brands, and share
profit with each sold items in Lotte Center Hanoi.
In order to sell well, Lotte can get reference from the pioneers to have their own
effective methods to serve their customers. For example, they can consider providing
dry-clean service like NEM, or offer discount like Vincom or Parkson. However, due
to the deep study about the experience of big shopping centers and consumer
behaviors, Lotte just need to focus on large discount at the end of the season. To
strengthen this opinion, an observation from many big retailers around the world
shows that the discount level should be large enough to motivate customer to
purchase. For example, many business centers in Malaysia offer discount from 15% -
75% in comparison with daily price. And it is clear that people actually prefer large
discount per time than discount many times with small quantity.
One factor Lotte should seriously regard and make them different from themselves
with other centers that is the opening and closing time. Other centers usually operate
from 8:00 AM to 21:00 PM
35
; however, to win the potential customers and customers
from existing rivals, Lotte can differentiate with others by extending their operating
time from 9:00 AM to even 23:00 PM. As discussed above, the main customers that
35
/>Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 22
Market research of Lotte Center Hanoi
Lotte focus on are those who are young and have high income. As a result, the time
for shopping will last quite longer, and later than normal. Hence, lengthening the
operating time means that customers will have time to consider and choose products

conveniently, and the exposure of those products will be longer. That idea just aims to
help clothes stores in Lotte Center Hanoi get stronger position in customers’ minds,
and pull them closer.
Other competitors just spend 2 floors for clothing store which can not fully meet the
huge demand of customers. In order to facilitate visitors and consumers, Lotte should
use at least 2 – 3 floors for fashionable clothing stores. Lotte should take advantage of
having a wide plane to provide customers with an outstanding clothes shopping mall
than other limited plane centers, and help customers be actually pleasure every time
they come to Lotte Center Hanoi.
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 23
Market research of Lotte Center Hanoi
VI. Internship experience
Before practicing internship at Lotte Center Hanoi, I thought that the company would
do business in some known fields such as food, shopping and logistics. After taking
part in the internship course at the company; however, I was aware of that Lotte
Center Hanoi are also interested in other area. They are in progress of building up a
business center in a centre district of the capital for their own business in many areas
from clothes stores, cinemas, 5-star hotels to offices, and just spend a small part of the
building is used for selling.
During the period of preparing the assigned report related to the market research for
Lotte Center Hanoi until 2013, I had got useful and realistic opportunities to apply
some theoretic knowledge into the reality. I made a small survey online by myself to
get the needed results about the clothes taste of customers. Furthermore, this survey
had helped me bring out some helpful suggestions for the company.
In fact, the company has acquired Coralis Vietnam Co., Ltd in the September 2010,
and they are in now the developing phase. Studying Vietnamese market as well as
clothes market in Hanoi is just commenced. Thus, the developing process and
materials are not conveniently available for the report.
In spite of many initial difficulties in finding and researching information about the
market as well as the customer demand, or building good relationship with the local

authorities, Lotte Center Hanoi still try their best to overcome those hurdles by the
highest determination and deepest experience of the 5
th
largest economic group of
South Korea established in 1965
36
which showed the very successful performance
around the world.
Within one month practicing internship at Lotte Center Hanoi, I was involved in many
activities such as translate some legal documents related to applying planning
permission, or some transaction letters sent to the parent company in South Korea.
36
/>Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 24
Market research of Lotte Center Hanoi
From those actions, I had chance to get in touch with real documents and vouchers
that I might have not seen at class before. This can help me get acquainted with
various types of vouchers and bills in daily business of a company like taxi bills, red
invoices, and so on.
Practicing internship course at the company, I would improve my writing report skills,
ability to find, select, summarize and organize available information to make an
informative and persuasive report.
Working in Lotte Center Hanoi provided me a precise opportunity to work in a
professional, good learning, and multicultural environment. I would understand more
about the differences between Vietnamese and South Korean cultures practically
observe and withdraw helpful lessons of social behaviors, which would be very
helpful for me to verify some knowledge I have learned from the books, and for my
future job.
Dang Thi Thuy Vinh–A1–High Quality Class–Business Administration–K46 Page 25