The retail market in Vietnam is estimated to increase by $163.5 billion at a compound annual growth rate of 11.4 per cent between 2022 and 2027, according to a report by market research company Technavio.
Amidst the intensifying competition in Vietnam's fragmented retail industry, more mergers and acquisitions are taking place with major players scooping up or merging with smaller retailers.
Vietnam's retail market is dominated by a number of large retailers. However, small- and medium-sized enterprises are growing their footprint by securing new contracts and breaking into new markets as a result of technological advances and product innovations. As a result, there will likely be fierce competition and significant room for expansion in the Vietnamese retail market.
Local and foreign retailers in Vietnam are vying for market share by offering a variety of shop formats, including commercial centres, supermarkets, groceries, and convenience stores.
The report pointed out that the growth of the local retail market is being driven by the rising demand for convenience food. Compared to home-cooked meals that require extensive preparation, convenience food items like processed beef and poultry products are becoming increasingly popular. During the projected period, this is anticipated to boost consumer demand for convenience goods and, in turn, support the expansion of Vietnam's retail industry.
The rapid pace of urbanisation and the shifting shopping preferences of young urban consumers have led to important changes in modern retail channels, including convenience stores and e-commerce. Online sales are becoming a bigger priority for market leaders and independent merchants alike. Retailers are taking advantage of favourable indicators like high internet penetration and smartphone ownership to offer their products online. These factors will encourage market expansion over the course of the projection.
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By Thanh Van