[Report] Four VIP Events Drive Over 10% of Annual Revenue… The “Profitable Localization” of Lotte Department Store and Lotte Mart in Ho Chi Minh City

At a department store in Ho Chi Minh City, Vietnam, shopping continues after business hours end four times a year. This is a special event where the store reopens its doors for top-tier customers. Revenue generated from these four annual events accounts for more than 10% of the department store’s total annual revenue. At a large supermarket in the same city, Korean Shine Muscat grapes are prominently displayed at the entrance, and food options and dining spaces are provided so that customers can have both lunch and dinner there. This is how Lotte Department Store and Lotte Mart open the wallets of Vietnamese consumers.

Lotte Department Store Diamond Plaza branch, located in District 1, a central commercial area of Ho Chi Minh City. At the entrance to the “Diamond Lounge” on the third floor, a staff member was chatting with a customer about shopping. Inside, customers were seen relaxing while enjoying drinks and snacks. Equipped with private rooms and a hall, this is an exclusive space accessible only to top-tier VIP customers. Korean-style excellent customer management, which even takes care of customers’ birthdays, was being practiced for Vietnamese consumers as well.

Korean-style VIP management, unfamiliar in Vietnam, has recently begun to yield results. The VIP special shopping event, where only VIP customers are allowed entry until 11 p.m. after regular business ends, is held only four times a year, but its consumption scale is so large that it accounts for more than 10% of the branch’s annual revenue. Park Oun-yeong, team leader at Lotte Department Store Ho Chi Minh City branch, said, “We manage approximately 1,000 top-tier VIP customers,” adding, “They contribute significantly not only to sales but also in terms of operating profit.”

Local customers also highly rated the department store’s luxurious atmosphere. A Vietnamese customer met at the store said, “Lotte Department Store feels more luxurious compared to other department stores,” and added, “It is popular locally because you can also buy Korean cosmetics.”

The Diamond Plaza branch covers an area of approximately 4,500 pyeong (about 14,850 square meters), which is smaller than large domestic department stores, but it has achieved results by concentrating on brands preferred by local high-income earners. In particular, the first floor features a luxury concept store of about 200 pyeong and global premium cosmetics stores such as Chanel at the front. It attracted Jo Malone and Diptyque, which had not previously entered Vietnam, in addition to Korean high-end cosmetic brands like Sulwhasoo and The History of Whoo.

On the third floor, they created Ho Chi Minh City’s largest golf specialty space. Korean fashion brand “Hazzys” is also popular here. Team Leader Park said, “Hazzys is recognized as a high-end brand locally,” and explained, “Customer preference remains high even at prices higher than in Korea.”

The food and beverage stores were also differentiated. They prepared a restaurant space of about 700 pyeong and a terrace garden of 400 pyeong, including TWG Tea and Starbucks Reserve, providing dining and resting spaces to keep customers lingering at the department store.

The fresh food section on the first floor of Lotte Mart South Saigon branch, located in District 7 of Ho Chi Minh City. The first thing that caught the eye at the entrance was a local customer selecting Korean Shine Muscat grapes. While Chinese Shine Muscat grapes, commonly seen in Vietnam, are sold for 50,000 to 60,000 dong, Lotte Mart prominently featured Korean grapes that cost more than twice as much.

Park Dong-hwan, Product Strategy Director at Lotte Mart, said, “Korean products are an important differentiating factor for Lotte Mart,” and explained, “We emphasize the premium image of Korean products rather than price competition.”

Deeper inside the store, Vietnamese customers were busy choosing menus in front of “Yorihada Kitchen,” where gimbap (seaweed rice rolls), tteokbokki (spicy rice cakes), bulgogi bento boxes, and dakgangjeong (crispy fried chicken) were displayed. A notable feature is that it creates an atmosphere where local food can be enjoyed alongside Korean cuisine by also selling Vietnamese-style fried rice, pho, and sushi.

In the dining area, a considerable number of customers were heating up their purchased food in microwaves to eat. Vietnam has a well-developed culture of dining out and consuming ready-to-eat foods. A customer met on site said with a smile, “I often come here because I can heat up and eat the food I buy,” adding, “I like tteokbokki and gimbap.”

In the daily necessities section on the second floor, customers were looking at Lotte Mart’s private brand (PB) products. One male customer held clothes against his body several times. There were also reactions like, “The fabric seems good.” Director Park said, “In Korea, there isn’t much popularity for fashion PBs, but it is different here,” and added, “They prefer cost-effective PBs centered on fashion and daily necessities.”