Vietnam Retail Market to Grow by USD 226.4 Billion (2024-2028), Driven by Demand for Convenience Foods, Report on AI's Role in Market Transformation - Technavio

NEW YORK, Jan. 21, 2025 /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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Key Market Trends Fueling Growth

The retail market in Vietnam is experiencing significant growth due to economic development. Traditional formats like brick-and-mortar stores, shopping malls, boutiques, and specialty stores continue to dominate, but modern retailing is on the rise. The digital wave is transforming businesses with tech-savvy consumers preferring ecommerce platforms. AI, machine learning, IoT, and omnichannel strategies offer seamless shopping experiences, convenience, and customer loyalty. Price sensitivity remains a key factor, with health, wellness products, fitness equipment, and wellness supplements popular. Sustainability is gaining importance, with eco-friendly products, green technologies, and reduced plastic use. Mahindra, the Chairperson,  sustainability and environmental awareness in supply chains. The organized sector, including department stores and brand awareness, competes with the unorganized sector, comprising traditional stores, Kirana shops, and street vendors, offering personalized service and lower operational costs. Urbanization and increasing consumer preferences for an omnichannel experience are driving e-commerce expansion. Adaptation to changing consumer preferences and data analytics are essential for businesses to thrive. 

Vietnam's retail market is experiencing significant growth due to urbanization and shifting consumer preferences among young urban customers. This trend 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 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 a large online customer base. 

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Market Challenges

• The retail market in Vietnam presents both opportunities and challenges for businesses. Economic development has led to an increase in disposable income, driving demand for modern retailing. However, traditional formats like street vendors and Kirana shops continue to dominate, catering to price-sensitive consumers and maintaining a local connection. The digital wave, with tech-savvy consumers and ecommerce platforms, is transforming shopping. Businesses must adopt digital technologies like AI, machine learning, and IoT for omnichannel strategies, offering seamless shopping experiences and customer loyalty. Modern retail, including department stores and specialty stores, is growing, driven by brand awareness and shopping experience. However, sustainability and environmental impact are becoming essential, with consumers preferring eco-friendly products and green technologies. Chairperson Mahindra the need for sustainability in retail, adapting to changing consumer preferences, and implementing omnichannel experiences. Infrastructure development and payment options are crucial for organized sector growth, while the unorganized sector, including shopping malls, boutiques, and fitness product stores, must innovate to stay competitive. Price sensitivity remains a challenge, especially in health, wellness, and fitness products. The retail sector must balance convenience with environmental concerns, using data analytics to optimize supply chain and adapt to consumer behavior. Urbanization and increasing consumer expectations for a seamless shopping experience further complicate matters. Ultimately, businesses must balance between modern retail and traditional formats, leveraging the best of both worlds to meet the evolving needs of Vietnamese consumers.
• In the retail market of Vietnam, managing back-end supply chain operations is intricate due to the developing infrastructure. Functions like product acquisition, warehouse management, packaging, inventory, distribution, and merchandising require substantial resources. Costs include IT support, infrastructure maintenance, and customer service. Transportation and supply management for retailers with multiple stores add complexity, along with potential product damage risks. Effective supply chain management is crucial for retail success in Vietnam.

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Segment Overview 

This retail market in Vietnam report extensively covers market segmentation by

• 1.1 Offline
• 1.2 Online

• 2.1 Grocery
• 2.2 Electronics and appliances
• 2.3 Home and garden
• 2.4 Health and beauty
• 2.5 Others

• 3.1 APAC

1.1 Offline-  The retail market in Vietnam offers significant growth opportunities, yet faces intense competition among domestic and international players. Supermarkets, providing daily necessities, food, and household appliances, remain popular due to their convenience and one-stop shopping experience. Traditional outlets continue to dominate due to their widespread availability, comparatively lower prices, and better fresh produce supply. Convenience stores, located near highways or busy roads, offer everyday essentials and can even sell alcohol with a license. Department stores, or commercial centers, provide a wide range of consumer goods and have shaped urban shopping habits. Despite the digital channel's growth, physical retail channels continue to dominate the Vietnamese retail landscape.

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Research Analysis

Vietnam's retail market is experiencing significant growth due to the country's economic development and increasing consumer spending. Traditional formats like street markets and mom-and-pop stores continue to coexist with modern retailing, offering a diverse range of products from local produce to international brands. The economy's digital wave is transforming retail, with tech-savvy consumers embracing ecommerce platforms and digital technologies. AI, machine learning, and IoT are being adopted for personalized shopping experiences and seamless transactions. Omnichannel strategies are becoming the norm, allowing businesses to reach customers through various channels, including brick-and-mortar stores, shopping malls, boutiques, and specialty stores. Price sensitivity remains a key factor, with health, wellness products, fitness equipment, and wellness supplements gaining popularity. The organized sector, including department stores and modern retail formats, is expanding, leading to increased brand awareness and competition.

Market Research Overview

Vietnam's retail market is experiencing significant growth due to the country's economic development and the increasing number of tech-savvy consumers. Traditional formats are being replaced by modern retailing, with businesses adopting digital technologies such as AI, machine learning, and IoT to enhance the shopping experience. Ecommerce platforms are expanding, offering seamless shopping and convenience, while brick-and-mortar stores are adopting omnichannel strategies to remain competitive. Price sensitivity remains a key factor, with health, wellness products, fitness, and wellness supplements gaining popularity. The organized sector, including department stores and modern retail, is growing, but the unorganized sector, including traditional stores, Kirana shops, and street vendors, continues to hold cultural significance and offers personalized service and lower operational costs. Sustainability and environmental impact are becoming increasingly important, with businesses focusing on eco-friendly products, green technologies, and reducing plastic use. Urbanization and changing consumer preferences are driving the adoption of digital technologies and infrastructure development. Mahindra, the Chairperson of a leading conglomerate, the need for sustainability and adaptation to changing consumer preferences in the retail industry. Data analytics plays a crucial role in understanding consumer behavior and adapting to their evolving needs.

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

About Technavio

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