Maintaining strong growth momentum, with added dynamics from e-commerce. Foreign players outperform in both physical and electronic formats.


Vietnam’s retail sales has continued to record good growth, maintaining a 5-year CARG of 7.6% (2017-2022) despite Covid-19 in some of these years, to reach almost USD 242 billion in 2022. In particular, modern retail is growing extremely fast, though notably in big urban areas, and is taking up an increasing portion of total retail sales. The emergence of modern retail formats (including e-commerce) and the strong participation of foreign retailers have brought a breath of fresh air and greatly changed the face of retail in Vietnam, bringing more choice and convenience for consumers.

Modern retail vs. traditional retail

Although modern retail has many advantages in attracting customers and is forecast to grow strongly in the future but in general, shopping at the GT (general trade) channel still accounts for a high proportion (at least 70%). Under competitive pressure from modern retail and e-commerce coupled with the special context of Covid-19, sale revenues of local market systems and other forms of GT in Vietnam have dwindled consistently, year after year, notably in big cities where people are inclined to technology and convenience, bringing huge opportunities for e-commerce, an emerging format of modern retail.

Since 1 Jan 2009, Vietnam has opened its doors for the retail business with 100% foreign ownership. They are authorized distributors of all products made in Vietnam and other products legally imported into Vietnam; excluding a number of long-term limits as prescribed by the Government such as pharmaceuticals. Since then, quite a few foreign-owned retailers have been licensed and operated in Vietnam, led by Asian-based giants.

Foreign-owned retailers in expansion

Foreign-owned retailers are expanding in Vietnam, probably even faster than local peers. For instance, Korean retail brand GS25 achieved a significant milestone in early November last year when it extended its operations to 200 stores in Vietnam. Thai retail group Central Retail ambitiously plans to double its operations in the country by developing 70 supermarkets (now rebranded GO from Big C) in 55 out of 63 provinces and cities over the next five years. Japan’s Uniqlo also launched four new stores in Hanoi and Ho Chi Minh City in 2022, while Japan’s MUJI established its first store in Ho Chi Minh City in late 2020. Kohnan Japan is another story of quick expansion, strongly associated with AEON Mall.

Of a different category (shopping malls rather than stores therein), Japanese-owned AEON Mall has also been aggressive with 7 massive shopping malls in the densely-populated outskirts of Ho Chi Minh City, Binh Duong, Hanoi and Hai Phong and plans to reach 20 shopping malls throughout Vietnam by 2025.

Also worthy of note, Vietnam has now replaced China as the third-largest foreign market for Korean retail group Lotte, which is also seeking to increase its market share.

Challenges faced by modern trade

Squeezed purchasing power or tightened spending due to increasing unemployment or lower disposable incomes. A large part of the population have taken measures to reduce their expenses over past year. This is as a result of growing global economic uncertainty as households hold back on buying big-ticket items in favor of saving for a rainy day. The root causes of this are a strengthening US dollar, escalating commodity prices, and decreasing consumer purchasing power have had a cumulative negative impact on the retail industry. In addition, labor-intensive industries like textiles, footwear, and aquaculture are facing challenges due to decreased purchasing power in key export markets like the US, Japan, and the EU.

Increasing competition among retailers notably between local and foreign-owned in the matters of site and location, pricing, and product diversity. While foreign-owned players tend to have less advantage over local peers in having access to good site and location, they offset this with competitive pricing and diversified product offerings besides shopping experiences and aggressive promotions.  Competition among local players is not less fierce. Long-established brands such as Coopmart is striving to maintain market share.

E-commerce – new dynamics of modern retail

Although it sounds sad, the Covid-19 pandemic was the very first driver for the boom of Vietnam’s e-commerce during 2020-2021 when various heath control measures such as lockdowns and physical restrictions (social distancing) were in place. Built on that strong base,  Vietnam’s e-commerce is projected to continue thriving in the coming years, though at lower paces, aided by a series of growth drivers such as the wave of digital transformation, consumers’ trust, technological infrastructure, and favorable mechanisms and policies issued by the Government.

Boasting some 100 cross-border e-commerce platforms, Vietnam has been ranked among the top five nations with regard to the sector’s growth of 20% a year by eMarketer. Last year, the country’s top four platforms – Shopee, Lazada, Tiki, and Sendo – generated 135 trillion VND (5.73 billion USD) in revenues. Meanwhile, the scale of the country’s retail e-commerce market was estimated at 16.4 billion USD in 2022, accounting for 6.8% of the country’s aggregate retail revenues (comprising goods and services). There were approximately 58.5 million Vietnamese people shopping online, with their spending averaging about USD272.

According to the White Book on Vietnamese E-Business 2022, up to 74.8% of Vietnamese internet users purchased goods and services online, with the most consumed commodities named apparel and cosmetics, household items, and technological and electronic devices. Nguyen Thanh Hung from the Vietnam E-commerce Association (VECOM) assessed that the market sees extensive room for growth as it obtained significant attention from the Government for related institutions, policies, human resources training, and cashless payments.

In addition, Nguyen Thi Minh Huyen, Deputy Director of the Vietnam E-commerce and Digital Economy Agency, said the Government targets pushing the ratio of e-commerce in the country’s total retail sales to over 20%. The local retail market is now worth some 250 billion USD. Tran Trong Tuyen, General Director of Sapo Technology JSC, highlighted advantages of the Vietnamese market such as foreign capital inflows, domestic technology development, and a comprehensive and convenient e-commerce ecosystem, among others. He also forecast a quick and firm growth for the sector in the coming years.

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