Vietnam’s Retail Sector Poised for Robust Growth
Hanoi, The Gulf Observer: Vietnam’s retail industry is experiencing significant growth, driven by favourable economic conditions, a youthful population, and evolving consumer behaviours. The sector is rapidly becoming one of the leading drivers of economic expansion, with projections for impressive growth in the coming years.
Tiền Phong Securities Corporation forecasts that the retail market will expand at an annual rate of 12.05 percent between 2024 and 2029. This growth trajectory is supported by the rise of a burgeoning middle class, the widespread adoption of digital payment systems, and the continued expansion of modern retail formats.
The country’s demographic structure plays a vital role in fuelling the sector’s momentum. With a population exceeding 100 million, more than 70 percent are under the age of 40, making them a tech-savvy, urban-oriented, and aspirational consumer base. By 2025, Vietnam’s GDP per capita is expected to surpass US$5,000, further stimulating consumer spending.
Hoàng Xuân Trung, Head of Corporate Clients at Citi Vietnam, highlighted the potential of the country’s increasingly affluent middle class to drive sustained retail demand. Similarly, Đặng Thúy Hà, Director of Customer Behaviour Research at NielsenIQ Vietnam, noted a shift in consumer focus from basic needs to enhancing quality of life, presenting significant opportunities for retailers to diversify their offerings.
Key factors behind the retail sector’s growth include the expansion of modern retail networks, which are reaching underserved rural areas, as well as the growing popularity of digital payments. Nearly 40 percent of consumers now use banking apps for transactions, reflecting the country’s push towards a cashless society and enhancing retail convenience.
The expanding middle class, projected to make up 26 percent of the population by 2026, is a major driver of consumption. With an additional 23.2 million people expected to join this demographic by 2033, the retail sector is set for substantial growth across all segments. Additionally, Vietnam’s favourable labour demographics and a high participation rate of women in the workforce ensure sustained consumer spending.
Consumer trends in Vietnam are evolving rapidly. Health and sustainability are becoming key considerations in purchasing decisions, with increasing demand for eco-friendly and high-quality products. There is also growing brand loyalty, with consumers shifting from price-sensitive to value-driven consumption.
Leading retail companies, such as FPT Retail (FRT), Mobile World Investment Corporation (MWG), Digiworld (DGW), Masan Group (MSN), and Phú Nhuận Jewelry JSC (PNJ), are positioning themselves to capitalise on this sector’s recovery and expansion. Strategic initiatives, like MWG’s restructuring and the expansion of its Bách Hóa Xanh grocery chain, are expected to yield significant results as Vietnam’s urbanisation continues and the economy recovers.
Additionally, policy measures such as a 2 percent reduction in VAT on certain goods and services are expected to stimulate consumer spending, further benefiting retail enterprises.
Mordor Intelligence predicts a Compound Annual Growth Rate (CAGR) of 12.1 percent for Vietnam’s retail and consumer services sector between 2024 and 2029. Retail stocks are expected to rebound as escalating demand, increased consumer spending, and overall economic recovery continue to drive the sector’s growth.
Nguyễn Việt Đức, Head of Digital Business at VPBank Securities, anticipates strong performance in the retail sector, bolstered by a dynamic consumer base and an increasingly favourable economic environment.
