Food retail industry in Vietnam - statistics & facts
Vietnam is among the fastest-growing economies worldwide. Apart from its exports, the domestic market has been another driver for its economic growth. Within Vietnam’s growing retail sector, the food retail industry has been evolving fast to meet the demand of its population. Despite the global COVID-19 pandemic, the retail sales of food products have consistently been increasing over the past years and were forecasted to reach more than 66 billion U.S. dollars by 2023.
Changing retail landscape and consumption habits
Traditional retail channels such as street shops or wet markets still accounted for most of the grocery retail sales in Vietnam. However, in recent years, more and more consumers have chosen to shop at modern trade outlets, namely supermarkets and convenience stores. The penetration rate of modern retailers was especially high in urban areas. In Vietnam’s two largest cities Ha Noi and Ho Chi Minh City, consumers demonstrated a higher preference for these channels over traditional grocery outlets. Together with the expanding e-commerce sector, online grocery retail was expected to increase its retail value share in the future, as this channel has a growing usage rate in urban Vietnam.
Many Vietnamese consumers consider convenience as an important criterion for their food demand nowadays, leading to rapidly increasing retail sales of packaged food. Although fresh items still accounted for the highest sales of food and beverage products, packaged food has been catching up, with the second-highest sales. While traditional Vietnamese cuisine does not often include dairy, these products have grown into the most purchased packaged food items thanks to growing consumption. Meanwhile, health-conscious consumers have been switching to dairy alternatives such as plant-based drinks in recent years.
Impact of COVID-19
Vietnam recorded the first COVID-19 infection at the beginning of 2020 and has gone through several lockdowns since then. As a result, many consumers reduced their frequency of visiting physical outlets for grocery and opted for modern trade channels instead of traditional ones when shopping for food. At the same time, they increased their food stock at home, with ready-made and dry food items being the most purchased goods for stockpiling during the pandemic. Vietnamese consumers also showed a higher willingness to buy necessities and fresh products online than before the pandemic. Online grocery shopping and modern retailer usage were among the new and quickly adopted habits that were expected to stay even after the pandemic.
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