Competition for Vietnam’s retail market set to intensify: Experts
Given its early stage of development, Vietnam’s retail market share presents huge opportunity for retailers capable of providing the best shopping experience to customers through unique and modern retail technologies.
Competition for Vietnam’s retail market is set to intensify in the 2018 – 2020 period between Vietnam and foreign-invested enterprises, traditional and modern retailing channels, according to Le Xuan Dinh, editor-in-chief of the Economy Forecast Review magazine.
Overview of the conference. Source: Nguyen Tung.
|
Since Vietnam’s participation in the World Trade Organization in 2007, the retail market has been developing at a rapid rate, in which the modern retailing channel makes up of 26% of the retail market share and grows by 11.8% annually, Dinh said.
According to the General Statistics Office, revenue of Vietnam’s retail market has increased sharply over the past few years, rising from US$88 billion in 2010 to US$130 billion in 2017, which is on track to reach US$179 billion by 2020.
Le Viet Nga, deputy director of the Domestic Market Department under the Ministry of Industry and Trade (MoIT), said the huge potential of Vietnams’ retail market comes from a population of over 93.7 million, 60% of them are in the age of 18 – 50.
“It is estimated that household spending with an average increase of 10.5% annually would reach US$714 per month by 2020,” Nga said.
“However, the modern retail channel only accounts for 25% of Vietnam’s retail market share, lower than regional peers, such as the Philippines with 33%, Thailand with 34%, Malaysia with 60% and Singapore with 90%,” Nga added.
According to Nga, the conclusion of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the upcoming EU – Vietnam Free Trade Agreement (EVFTA) and the establishment of the ASEAN Economic Community (AEC) are making Vietnam an ideal investment destination, including the retail market, for foreign companies.
“Not to mention Vietnam’s commitment to open its service, trade and distribution market,” she added.
In spite of the high penetration rate of foreign retailers, domestic products account for 80 – 90% in both modern and traditional retailing channels, indicating customers’ trusts on the quality of Vietnamese products, Nga informed.
Dang Thuy Ha, head of consumer behavior research at Nielsen Vietnam, said consumers are changing their shopping behavior to maximize experience in terms of convenience and satisfaction, requiring retailers to work on personalizing customers experience.
Moreover, social media and recommendations from friends and families are two important factors affecting customers’ decision in shopping, Ha added.
In this circumstance, Luu Bao Van, managing director of market research company Intage Vietnam, said the application of Industry 4.0 technologies, including Big Data or Artificial Intelligence, is the right direction for retailers to get a better understanding of the market and improving customer services quality.
Nguyen Tien Vuong, deputy director of Hanoi Trade Corporation (Hapro), said local retailers must take advantage of new technologies and be active in global integration, or face the risk of losing right on home playground.
08:41, 2025/01/11
Vietnam-Laos Industrial Park: New direction to strengthen bilateral ties
Numerous Vietnamese projects in various sectors have effectively contributed to Laos' development, creating jobs and improving the livelihoods of tens of thousands of local workers.
22:19, 2025/01/09
Hanoi's foreign trade turnover hits US$60.1bn in 2024
The city will continue to support businesses in exploring new markets, capitalizing on the Free Trade Agreement of which Vietnam is a member.
11:46, 2025/01/09
Vietnam confident of achieving 8% growth rate in 2025
Key drivers of Vietnam’s growth include institutional reforms and decentralized governance.
14:34, 2024/12/26
UK’s accession to CPTPP to benefit Vietnam’s exports in 2025
Vietnam, in particular, will gain further access to a high-quality market, complementing its connections with Japan, Canada, and Australia.
16:41, 2024/12/16
Hanoi seeks greater efficiency in e-commerce tax management
Hanoi's e-commerce tax administration is expected to be significantly tightened in the near future.
17:34, 2024/12/15
Hanoi's wet markets in decline amid changing consumer behaviors
Local consumers prefer shopping options that offer convenience and assurance of product origin.