Retail Market in Vietnam by Distribution Channel and Type - Forecast 2023-2027

Vietnam Retail Market Forecast 2023-2027

The Vietnam Retail Market size is estimated to grow by USD 163.49 billion at a CAGR of 11.4% between 2022 and 2027. The market's growth trajectory hinges on various factors, notably the rising consumer preference for convenience food items, the proliferation of retail outlets, and the increasing appeal of private-label brands. However, challenges persist, encompassing logistical and supply chain complexities, inadequate infrastructure, and the burgeoning presence of counterfeit goods. With the growing prevalence of smartphones and a tech-savvy Generation Z demographic, retailers are capitalizing on mobile commerce, streamlined ordering processes, and voice-activated shopping to accommodate changing consumer preferences. Moreover, the incorporation of chatbots, mobile payment platforms, Internet of Things (IoT), Artificial Intelligence (AI), Augmented Reality (AR), Virtual Reality (VR), and automation is amplifying operational effectiveness while providing tailored suggestions for products.

Overview of the Vietnam Retail Market

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Segmentation

Distribution Channel

The market share growth by the offline segment will be significant during the forecast period. The market in Vietnam has a lot of room for expansion, but there are also a lot of rivalries. Domestic and foreign giants in Vietnam are fighting for supremacy with a variety of shop formats, including commercial centers, supermarkets, and grocery and convenience stores, as they embark on aggressive development initiatives. However, despite the advent of digital channels, physical channels continue to dominate the landscape. 

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The offline segment was valued at USD 132.66 billion in 2017 and continued to grow by 2021. In this segment, Supermarkets provide items that are more suited to the demands of the common consumer on a daily basis. They also provide food, non-food items, and household appliances, making shopping easier for clients because they get everything they need under one roof. Similarly, Convenience stores are small stores that offer everyday products like groceries, confectionaries, soft drinks, snacks, personal care products, toiletries, and other regular-use items. Some stores also sell alcohol if they possess a license. Also, a department store or commercial center is a store that offers a wide variety of consumer goods to buyers. In cities, department stores have shaped the shopping habits of people and redefined luxury services. Due to this type store, the offline segment will grow during the forecast period.

Types of Channels in Vietnam

In Vietnam, the sector is diverse, reflecting the country's robust economy and dynamic consumer market. Vietnamese market thrives through various channels, with malls being prominent hubs for fashion, clothing, and cosmetics. Local markets contribute significantly to the market's landscape, providing a platform for traditional commerce. The market experiences fierce competition, both from local and international players. E-commerce has gained momentum, with online platforms becoming a vital part of sales. The English language has become integral, as seen in advertising and product descriptions. This evolving ecosystem showcases the adaptability of Vietnam's economy to the global commerce market.

Market Dynamics and Customer Landscape

The market in Vietnam is experiencing a significant transformation driven by several key factors. With rising disposable incomes and a growing tech-savvy population, there's a notable shift towards digital transformation and innovative technologies. Smartphone penetration is high, paving the way for mobile commerce and seamless online shopping experiences. Retailers are leveraging technologies like AI, IoT, AR, and VR to enhance operational efficiency and offer personalized customer experiences. Additionally, sustainability and environmental stewardship are becoming increasingly important, with a focus on eco-friendly practices to reduce carbon footprints. Amidst these changes, retailers are adopting one-click ordering, voice shopping, and chatbots to cater to evolving customer behaviors and preferences, ensuring a dynamic and competitive retail landscape in Vietnam.

Key Market Driver

The retail market in Vietnam is experiencing a significant upsurge, driven by various factors such as rising disposable incomes, rapid digital transformation, and substantial investments in innovative technologies. With the increasing adoption of smartphones and a tech-savvy Gen-Z population, retailers are leveraging mobile commerce, one-click ordering, and voice shopping to cater to evolving customer behaviors. Furthermore, the integration of chatbots, mobile wallet payments, IoT, AI, AR, VR, and automation is enhancing operational efficiency and offering customized product recommendations. Both in-store and online shopping experiences are being enriched through data analytics, machine learning, and inventory management, fostering sustainability and environmental stewardship through eco-friendly practices and reduced carbon footprints.

Government Regulations and Policies

Vietnam's market is heavily influenced by government regulations and policies that shape the economic landscape. The Vietnamese government actively engages in managing and supporting the sector. Policies aim to foster a conducive environment for sales, with a focus on nurturing local businesses. Trade stores and markets are subject to specific regulations to ensure fair competition. The market witnesses the impact of these policies on the stores and Vietnamese companies. As the government encourages the growth of the trade sector, Vietnamese retailers navigate a dynamic regulatory environment, balancing compliance with the evolving needs of the vibrant Vietnamese market.

Significant Market Trends

Urban lifestyles are another factor supporting the market growth. Vietnam is seeing continued urbanization and changing demand trends among young urban customers, resulting in a substantial development in contemporary channels such as convenience shops and quick e-commerce penetration. As online distribution channels eliminate the need for physical stores, merchandise, salespeople, and inventory, both established and private retailers in the market are focusing more on online sales. 

Also, they are leveraging factors such as the significant increase in internet and smartphone penetration to offer their products online. Indeed, the growth of formats such as tiny supermarkets, which cater to the desire for food shopping that fits into the flow of hectic urban lifestyles, demonstrates the rising importance of such variables. Such factors will drive market growth and trends.

Future Outlook for the Market

The future outlook for the sector holds promising prospects, driven by a robust economy and evolving consumer trends. Vietnam anticipates sustained growth, with a surge in Vietnamese sales and an increasing number of innovative businesses entering the market. Vietnam companies are poised to play a pivotal role in shaping the landscape, adapting to changing consumer preferences and embracing technological advancements. Vietnam's store landscape is expected to witness further expansion, offering diverse products and services. As the nation continues to integrate with the global economy, the future of market appears dynamic, with ample opportunities for Vietnam's business and innovation.

Challenges and Opportunities in the Market

The issues related to logistics and supply chain operations are hindering the market growth. Back-end processes involved in supply chain management operations are complex in the market as the country's supply chain infrastructure is still developing. They involve functions such as the acquisition of products, warehouse management, packaging, inventory management, distribution, and merchandising of products.

The costs involved in the above-mentioned processes are quite complex and involve significant expenditure and include costs for back-end support for IT, infrastructure management, and customer support. Managing multiple tasks related to transportation and supply constitutes a strenuous process, particularly when it concerns retailers with multiple stores across the country. This, coupled with the risk of product damage, adds to the complexity of the supply chain process.

Customer Landscape

The market trends and analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth analysis report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Key Players in the Retail Industry 

Players are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

7-Eleven - The company offers retail services through its 7-Eleven Stores. Also, the company offers retail services in the form of convenience stores.

The market analysis and report  also includes detailed analyses of the competitive landscape of the market and information about 13 market companies, including:

• AEON CO. Ltd.
• Berli Jucker Public Co. Ltd.
• Central Group of Company
• Central Retail Corp.
• Charoen Pokphand Foods PCL
• Circle K
• E Mart Co. Ltd.
• FPT Retail Joint Stock Co.
• Lotte Shopping Plaza Vietnam Co. Ltd.
• Masan Group
• MM Mega Market Vietnam
• Saigon Union of Trading Cooperatives
• SPAR International

Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Our market research and growth provides data that is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

Segment Overview

The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Distribution Channel Outlook 
  • Offline
  • Online

• Type Outlook 
  • Grocery
  • Electronics and appliances
  • Home and garden
  • Health and beauty
  • Others

Market Analyst Overview

The market in Vietnam is undergoing a significant transformation driven by various factors, including the increasing disposable incomes of consumers and the rapid digitalization of the retail landscape. Investments in technologies such as mobile commerce, voice shopping, and chatbots are reshaping customer behaviors, particularly among the tech-savvy Gen-Z population. Moreover, enterprises, big-box retailers, and brick-and-mortar establishments are leveraging digital technologies, data analytics, and artificial intelligence to enhance personalized marketing strategies and customer experiences. With the emergence of e-commerce websites and the impact of the coronavirus pandemic, online shopping trends have surged, leading to a shift in key segments of the retail industry market. Amidst these changes, sustainability and environmental stewardship are becoming integral, driving initiatives for waste reduction, energy optimization, and eco-friendly practices through blockchain technology and data analytics.

In Vietnam, the market is witnessing a significant surge in demand, propelled by digital transformation and evolving customer behaviors. With the advent of one-click ordering and mobile wallet payments, consumers are embracing convenience like never before. Moreover, technologies such as IoT and VR are revolutionizing in-store and online shopping experiences, enhancing operational efficiency and enabling customized product recommendations. Machine learning is optimizing warehousing and order fulfillment processes, while sustainability initiatives aim to reduce carbon footprints. In this dynamic landscape, emerging economies like Vietnam present immense opportunities for manufacturers, wholesalers, and distributors. The Global Retail Industry Market report underscores these trends, albeit with challenges like logistical constraints and the need for infrastructure development. Amidst it all, kiosks and mail services are also playing pivotal roles in shaping the retail landscape in Vietnam.

For more detailed insights, you can refer to the article: Exploring the Booming Vietnam Retail Market: Trends.

Vietnam Retail Market Scope
Market Report Coverage	Details
Page number	129
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 11.4%
Market growth 2023-2027	USD 163.49 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	10.68
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled	7-Eleven Inc., AEON CO. Ltd., Berli Jucker Public Co. Ltd., Central Group of Company, Central Retail Corp., Charoen Pokphand Foods PCL, Circle K, E Mart Co. Ltd., FPT Retail Joint Stock Co., Lotte Shopping Plaza Vietnam Co. Ltd., Masan Group, MM Mega Market Vietnam, Saigon Union of Trading Cooperatives, and SPAR International
Market dynamics	Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period.
Customization purview	If our market growth and forecasting report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report In Vietnam?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the size of the market  and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across Vietnam
• A thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the growth of the market vendors

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