Vietnam's retail market to rise by $163.5 billion over next five years

January 10, 2023 | 15:04
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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.
Vietnam's retail market to rise by $163.5 billion over next five years

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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The omnichannel retail model, which integrates all existing shopping platforms, has helped the retail sector outperform many others to become the one with the fastest recovery rate post-pandemic.

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Over the past 10 years, AEON Vietnam has developed a retail system with six shopping malls, general merchandise stores, supermarkets, a small supermarket chain, 25 speciality stores, and an e-commerce website. It has welcomed 160-180 million customers, laying the foundation for its future development strategy.

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As Vietnam is in its strongest-ever stage of increasing exports via cross-border e-commerce platforms, domestic and international stakeholders are betting on new products and services to meet growing demand.

By Thanh Van

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