Vietnam Retail Market to Grow by USD 226.4 Billion (2024-2028) as Demand for Convenience Foods Rises; Report on AI's Impact on Market Trends - Technavio

NEW YORK, Oct. 30, 2024 /PRNewswire/ -- Report on how AI is redefining market landscape - 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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Key Market Trends Fueling Growth

Vietnam's retail market is experiencing significant growth due to urbanization and shifting consumer preferences among young urban customers. This trend is driving the expansion of contemporary retail channels, including convenience stores and e-commerce. Online sales of retail products have seen substantial growth, with both established and private retailers selling through shopping portals. The elimination of physical stores, merchandise, salespeople, and inventory costs make online sales an attractive option. Additionally, the increasing Internet and smartphone penetration in Vietnam is enabling retailers to offer their products online. The rise of small supermarkets catering to urban lifestyles further highlights the importance of online sales and convenience. Private brands are exclusive to modern retail establishments, adding to the appeal of shopping online. Overall, these factors are expected to contribute to the growth of the retail market in Vietnam during the forecast period. 

Retail businesses in India are witnessing significant trends in the market. Economic development brings new opportunities for modern retailing, with tech-savvy consumers embracing ecommerce platforms and digital technologies like AI and machine learning. Seamless shopping experiences are in demand, with omnichannel strategies becoming essential for businesses to stay competitive. Indian consumers prioritize convenience and customer loyalty, driving the need for sustainable practices and ecofriendly products. Environmental impact is a growing concern, with businesses adopting green technologies and reducing plastic use. Price sensitivity remains a key factor, with health, wellness products, fitness equipment, and wellness supplements gaining popularity. Modern retail formats like department stores, boutiques, and specialty stores are expanding their product ranges to cater to diverse consumer needs. The organized sector, including malls and modern retail formats, is growing, but traditional formats like brick-and-mortar stores, kirana shops, and street vendors continue to hold a significant share of the market. Infrastructure development and payment options are crucial for both sectors to thrive. Brand awareness and shopping experience are vital for businesses to succeed, with a local connection being an added advantage. As the digital wave continues to transform retail, businesses must adapt to stay relevant. 

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Market Challenges

• In the retail market of Vietnam, the back-end processes of supply chain management are intricate due to the country's evolving infrastructure. These processes consist of product acquisition, warehouse management, packaging, inventory control, distribution, and merchandising. The associated costs are substantial, covering IT support, infrastructure maintenance, and customer service. Managing transportation and supply for retailers with numerous stores adds to the challenge, especially when dealing with potential product damage. The COVID-19 pandemic in 2020 disrupted the retail market's supply chain, increasing complexity and hindering growth during the forecast period.
• In the retail market, businesses face various challenges. Product ranges in fitness and wellness supplements require careful selection to meet consumer demands in the organized sector. Modern retail and department stores prioritize brand awareness and shopping experience, but unmet needs persist in the unorganized sector, including traditional stores, kirana shops, and street vendors. Differences in payment options and infrastructure hinder growth. Mahindra, the Chairperson, sustainability and environmental awareness in the supply chain. Urbanization and increasing consumer preferences for convenience fuel e-commerce expansion. Changing consumer preferences call for adaptation to omnichannel experiences. Data analytics offer insights, but cultural significance and local connection remain essential in personalized service. Lower operational costs and the challenge of adapting to changing consumers persist. The retail landscape continues to evolve.

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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 retail giants. Supermarkets, commercial centers, supermarkets, grocery stores, and convenience stores are popular formats, with supermarkets providing daily essentials and household items under one roof. Traditional retailers continue to dominate due to their widespread availability, lower prices, and fresh produce supply. Convenience stores offer everyday items along highways and busy roads, while department stores provide a wide range of consumer goods in cities. Despite digital channels, physical stores remain prominent. Supermarkets and department stores are expected to fuel offline retail growth in Vietnam due to their extensive product offerings.

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Research Analysis

The retail market is experiencing significant economic development, driven by the convergence of traditional formats and modern retailing. The digital wave is transforming the way businesses engage with tech-savvy consumers, leading to the growth of ecommerce platforms and the evolution of brick-and-mortar stores. Digital technologies such as AI, machine learning, and IoT are enabling omnichannel strategies, offering seamless shopping experiences for consumers. Shopping malls, boutiques, and specialty stores continue to thrive, catering to diverse product ranges including health, wellness products, fitness equipment, and wellness supplements. The organized sector, including department stores and brands, is prioritizing brand awareness to stay competitive in the price-sensitive market. Overall, the retail industry is embracing innovation and adapting to consumer preferences to meet the demands of the modern marketplace.

Market Research Overview

The retail market is witnessing significant changes as economic development propels modern retailing forward. Traditional formats are evolving to incorporate digital technologies, including AI, machine learning, and IoT, to offer seamless shopping experiences. Tech-savvy consumers are driving the shift towards ecommerce platforms and omnichannel strategies, prioritizing convenience and customer loyalty. Indian consumers, known for their price sensitivity, are also increasingly demanding ecofriendly products and sustainable practices. Environmental impact is a growing concern, with businesses adopting green technologies and reducing plastic use. Health and wellness products, including fitness equipment and wellness supplements, are gaining popularity. The organized sector, including department stores and modern retail, is expanding, increasing brand awareness and enhancing the shopping experience. Payment options and infrastructure are improving, making shopping more accessible. However, the unorganized sector, including traditional stores, kirana shops, and street vendors, continues to hold cultural significance and offers personalized service at lower operational costs. Urbanization and changing consumer preferences are driving e-commerce expansion and the adoption of data analytics for adaptation. Mahindra, the chairperson of a leading business conglomerate, the importance of sustainability and environmental awareness in retail. Supply chain optimization and adaptation to changing consumer preferences are key to success in this dynamic market.

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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SOURCE Technavio