Vietnam’s retail sector is witnessing remarkable growth, driven by favorable economic conditions, rising incomes, urbanization, and changing consumer behavior.
With a dynamic and youthful population, increasing disposable incomes, and widespread digital adoption, the sector is set to become a key driver of the country’s economic expansion.
Impressive Growth Projections
Tien Phong Securities forecasts a 12.05% growth rate for Vietnam’s retail market from 2024 to 2029. Growth is fueled by a burgeoning middle class, digital payment adoption, and the rise of modern retail formats.
Consumer confidence and rising disposable incomes are solidifying the retail sector’s role in economic recovery.
Sophie Dao, Senior Partner at GBS – Global Business Services LLC, emphasized: “Vietnam offers an incredibly dynamic retail landscape with immense opportunities for foreign investors. The combination of a rapidly growing middle class, strong digital infrastructure, and increasing openness to foreign participation makes this market highly attractive. At GBS, we’ve seen a surge in inquiries from global brands eager to establish their footprint in Vietnam. The future here is undoubtedly promising.”
Demographic Advantages
Vietnam’s population exceeds 100 million, with over 70% under the age of 40. By 2025, GDP per capita is expected to exceed $5,000, stimulating increased consumer spending. The middle class is projected to represent 26% of the population by 2026, with an additional 23.2 million people joining this group by 2033.
“Vietnam’s demographic dividend is a cornerstone of its retail success,” Sophie Dao added. “This young, tech-savvy population is setting new consumption trends, which are highly favorable for innovative and adaptable foreign brands.”
Key Drivers of Retail Growth
Modern Retail Network Expansion: Supermarkets, convenience stores, and online platforms are reaching rural markets, improving accessibility and convenience. Digital Payment Adoption: Around 40% of consumers now use banking apps for shopping, reflecting a shift toward cashless transactions. Government Support: Policies promoting digital transformation and a 2% VAT reduction are stimulating spending.
Favorable Demographics: High workforce participation, including strong female workforce engagement, supports sustained spending.
“The Vietnamese government’s commitment to fostering a digital economy and supporting infrastructure development is creating a fertile ground for retail innovation,” said Sophie Dao. “This proactive approach gives foreign players the confidence to invest and grow sustainably in Vietnam.”
Changing Consumer Trends
Growing demand for eco-friendly and high-quality products. A shift from price sensitivity to value-driven consumption and Increased brand loyalty among consumers.
Sophie Dao noted: “The Vietnamese consumer is becoming more discerning, favoring quality, sustainability, and trusted brands. Foreign investors who understand these trends and align their strategies accordingly will have a significant competitive edge.”
Leading Retail Enterprises
Mobile World Investment Corporation (MWG): Focuses on operational efficiency and strategic restructuring, with growth expected from grocery chain Bách Hóa Xanh and consumer electronics brand Erablue.
Digiworld (DGW): Anticipates growth due to foreign direct investment (FDI) inflows boosting consumer confidence.
FPT Retail (FRT), Masan Group (MSN), and Phú Nhuận Jewelry JSC (PNJ) are also positioning for significant growth.
“We are witnessing successful partnerships between local giants and international brands,” said Sophie Dao. “This collaboration not only accelerates growth but also brings global standards and innovation into Vietnam’s retail ecosystem.”
Future Outlook
Mordor Intelligence predicts a 12.1% CAGR for Vietnam’s retail sector from 2024 to 2029. Retail stocks are expected to rebound, supported by increased demand, consumer spending, and economic recovery momentum.
“Vietnam is on the brink of becoming a regional retail hub,” Sophie Dao concluded. “With the right strategic approach, foreign players have an unprecedented opportunity to thrive in this market. At GBS, we are proud to support international investors in navigating Vietnam’s vibrant retail landscape and unlocking its full potential.”
Vietnam’s retail industry stands at the forefront of economic growth, supported by a favorable demographic profile, policy incentives, and a growing middle class. As digital transformation and evolving consumer trends continue to reshape the market, the sector remains ripe with opportunities for both domestic and international players.
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Source: Vietnam Insider