Within the retail landscape, modern retail outlets show steady growth while traditional retail outlets remain stagnant. In particular, convenience stores and supermarkets have increased their presence by continuously opening new stores. In terms of retail sales, figures indicate the most growth for convenient stores although independent small grocers still account for most of the retail sales. While convenient stores are dominated by foreign brands, domestic brands hold a larger market share for supermarkets. Leading convenience store brands are Vinmart+ and Bach Hoa Xanh whereas Co.Opmart and Vinmart are the leading hypermarket and supermarket chains. Some foreign Asian retailers such as Aeon (Japan) and Lotte (South Korea) have entered the Vietnamese retail market as well, however, they still rank after the domestic brands in terms of store count.
With a population of over 90 million that has been forecasted to reach nearly 100 million in 2024, a forecasted median age of 32.5 and an urban population share of 35.92 percent, Vietnam has great potential for retail growth in terms of consumer strength. Overall, the monthly income per capita has more than doubled in the past eight years, possibly explaining the increasing household consumption expenditure in recent years. In both urban and rural areas, the monthly spending was especially high for fresh food. Popular categories included milk tea, coffee and personal care products.
Despite its growth, the retail sector faces several challenges by some emerging trends, for instance, the strong e-commerce market in Vietnam and the use of food delivery services among Vietnamese as well as out-of-home consumption. This means that retailers need to consider omni-channel strategies by embracing the transition towards digital consumption and conform to the fast-paced society to provide seamless customer experiences.