Vietnam Retail Market to Expand by USD 226.4 Billion (2024-2028), Driven by Rising Demand for Convenience Foods, AI Driving Market Transformation - Technavio

NEW YORK, Nov. 25, 2024 /PRNewswire/ -- Report with the AI impact on market trends - The retail market in vietnam size is estimated to grow by USD 226.4 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  13.64%  during the forecast period. Growing demand for convenience food products is driving market growth, with a trend towards emergence of urban lifestyles in Vietnam. However, issues related to logistics and supply chain operations  poses a challenge.Key market players include 7 Eleven Inc., AEON CO. LTD., Berli Jucker Public Co. Ltd., Central Group of Company, Central Retail Corp., Charoen Pokphand Foods PCL, Circle K, E Mart Co. Ltd., FPT Retail Joint Stock Co., Lotte Shopping Plaza Vietnam Co. Ltd., Masan Group, MM Mega Market Vietnam, Saigon Union of Trading Cooperatives, and SPAR International.

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Market Driver

Vietnam's retail market is experiencing significant growth due to economic development. Traditional formats like brick-and-mortar stores, shopping malls, boutiques, and specialty stores coexist with modern retailing. The digital wave is transforming businesses with tech-savvy consumers preferring ecommerce platforms. AI, machine learning, IoT, and omnichannel strategies offer seamless shopping experiences, enhancing customer loyalty. Price sensitivity remains a key factor, with health, wellness products, fitness, and wellness supplements gaining popularity. Brands focus on brand awareness and shopping experience, offering diverse product ranges. Sustainability is a growing trend, with eco-friendly products, green technologies, and reduced plastic use. Mahindra, the Chairperson, sustainability and environmental awareness in the supply chain. Adaptation to changing consumer preferences, data analytics, and omnichannel experiences are essential for businesses. Urbanization increases the demand for modern retail, including department stores and organized sector growth. Traditional stores like Kirana shops and street vendors maintain their local connection and personalized service, offering lower operational costs. Cultural significance remains, with infrastructure improvements supporting the expansion of both modern and traditional retail sectors. 

Vietnam's retail market is experiencing significant growth due to urbanization and changing consumer preferences among young urban customers. This shift is leading to the expansion of contemporary retail channels, including convenience stores and e-commerce. Online retail sales have seen substantial growth, with both established and private retailers effectively selling their products through digital platforms. The elimination of physical stores, merchandise, salespeople, and inventory requirements makes online sales an attractive option for retailers. Additionally, the increasing Internet and smartphone penetration in Vietnam provides retailers with an opportunity to expand their reach and offer their products online. 

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Market Challenges

• In Vietnam's retail market, economic development brings new opportunities but also challenges. Traditional formats like brick-and-mortar stores face competition from modern retailing and ecommerce platforms. Tech-savvy consumers prefer seamless shopping experiences, digital technologies like AI and machine learning, and omnichannel strategies. Businesses must adapt to the digital wave and offer convenience, customer loyalty, and eco-friendly practices to stay competitive. Price sensitivity remains a key factor, with health, wellness products, fitness, and wellness supplements popular. Brands aim for increased awareness and better shopping experiences through payment options, infrastructure, and personalized service. Sustainability is a growing concern, with green technologies, ecofriendly products, and reduced plastic use gaining importance. The organized sector, including department stores and modern retail, competes with the unorganized sector, including traditional stores, kirana shops, and street vendors, which offer local connection and lower operational costs. Mahindra's Chairperson sustainability and environmental awareness in the retail sector's supply chain. Urbanization and changing consumer preferences drive e-commerce expansion and adaptation to an omnichannel experience. Data analytics plays a crucial role in understanding consumer behavior and adapting to their evolving needs.
• In Vietnam's retail market, back-end supply chain management processes are intricate due to the developing infrastructure. Functions include product acquisition, warehouse management, packaging, inventory, distribution, and merchandising. Costs entail IT support, infrastructure, and customer service. Managing transportation and multiple retail stores adds complexity, with potential product damage risks. Retailers face challenges in optimizing these processes for efficiency and cost savings. Effective supply chain management is crucial for retailers to remain competitive in Vietnam's market.

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Segment Overview 

This retail market in Vietnam report extensively covers market segmentation by  

1. Distribution Channel
• 1.1 Offline
• 1.2 Online
2. Type 
• 2.1 Grocery
• 2.2 Electronics and appliances
• 2.3 Home and garden
• 2.4 Health and beauty
• 2.5 Others
3. Geography 
• 3.1 APAC

1.1 Offline-  The retail market in Vietnam offers significant growth opportunities, yet faces intense competition among domestic and international retailers. Supermarkets, with their wide range of daily necessities and convenient one-stop shopping experience, remain popular among consumers. These stores provide food, non-food items, and household appliances, as well as in-house bakeries and cafes. Traditional retailers continue to dominate due to their extensive availability, lower prices, and fresh produce offerings. Convenience stores, offering everyday essentials, are strategically located near highways and busy roads. Department stores or commercial centers provide a broad selection of consumer goods, shaping urban shopping habits. Despite the rise of digital channels, physical retail channels continue to dominate the Vietnamese retail landscape.

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Research Analysis

Vietnam's retail market is experiencing rapid growth due to the country's economic development. Traditional formats like street markets and mom-and-pop stores continue to coexist with modern retailing, offering a diverse shopping experience. The economy's digital wave has brought about a tech-savvy consumer base, leading businesses to adopt digital technologies such as AI, machine learning, and IoT for omnichannel strategies. Ecommerce platforms and brick-and-mortar stores are merging to provide seamless shopping experiences. Shopping malls, boutiques, and specialty stores cater to various consumer needs, from health and wellness products to fitness and wellness supplements. The organized sector, including department stores and brand awareness, is expanding, offering a wider range of products at competitive prices. Price sensitivity remains a key factor, making affordability a priority for many businesses. Overall, Vietnam's retail market is an exciting space to watch as it continues to evolve and adapt to consumer demands.

Market Research Overview

Vietnam's retail market is experiencing significant growth due to the country's economic development. Traditional formats are evolving as modern retailing gains popularity among tech-savvy consumers. The digital wave is transforming businesses with ecommerce platforms and AI, machine learning, IoT, and omnichannel strategies offering seamless shopping experiences. Convenience, customer loyalty, and environmental impact are key considerations. Indian consumers are price-sensitive and prefer health, wellness products, fitness products, and wellness supplements. The organized sector, including department stores and modern retail, is expanding, while the unorganized sector, including traditional stores, Kirana shops, and street vendors, maintains a local connection and offers personalized service at lower operational costs. Sustainability and environmental awareness are increasingly important, with eco-friendly products, green technologies, and plastic use reduction becoming priorities. Urbanization and changing consumer preferences are driving the adoption of digital technologies and infrastructure development. Adaptation to these trends is essential for businesses to thrive in this dynamic market. Mahindra, the Chairperson, the importance of sustainability and environmental awareness in the retail sector. Supply chain optimization and brand awareness are also crucial factors in the shopping experience, with payment options and infrastructure development playing a significant role in the success of both physical stores and online platforms.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Distribution Channel
• Offline
• Online
• Type
• Grocery
• Electronics And Appliances
• Home And Garden
• Health And Beauty
• Others
• Geography
• APAC

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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