Việt Nam’s retail sector is on track for strong growth, presenting compelling investment opportunities as domestic consumption continues to rise.

As investors look for sustainable growth sectors, Việt Nam’s modern retail and consumer goods industries appear poised to outperform other sectors in 2025.

Retail market expansion

Việt Nam’s retail sector has experienced substantial expansion, fuelled by rising disposable incomes, an expanding middle class and evolving shopping behaviours.

In the first two months of 2025, total retail sales and service revenue grew by 9.4 per cent year-on-year, surpassing the 8.4 per cent growth recorded in the same period last year, according to the General Statistics Office of Việt Nam. This indicates strong market momentum, making consumer stocks an attractive prospect for both domestic and foreign investors.

The ministry has set an ambitious goal of achieving a 10 per cent annual increase in total retail sales and service revenue, driven by a combination of economic growth and expanding modern trade channels.

Several factors are contributing to this sector’s positive trajectory. That includes the Government’s decision to increase the base salary in July 2024 which has provided consumers with greater purchasing power.

Additionally, modern retail chains and e-commerce platforms are rapidly expanding, making shopping more convenient.

The country’s increasing urbanisation and the rise of digital payment solutions are also accelerating the transition from traditional wet markets to modern supermarkets and convenience stores.

While the overall retail market is growing, consumer behaviour is becoming more selective.

A recent PwC survey indicated that 64 per cent of Vietnamese respondents prioritise food expenditures, while 48 per cent focus on healthcare and wellness.

In contrast, approximately 30 per cent of consumers plan to reduce spending on luxury items and non-essential products. This shift underscores a growing preference for essential goods and services, impacting different retail sub-sectors in varied ways.

The increasing demand for food, pharmaceuticals and essential household items bodes well for large retail chains, particularly those specialising in supermarkets and convenience stores.

Companies investing in omnichannel strategies, integrating physical stores with online shopping, are likely to capture a larger share of consumer spending.

Việt Nam’s food retail industry is undergoing a transformation. Projections suggest that the sector’s e-commerce revenue will reach $1.3 billion by 2026, with an annual growth rate of 12 per cent, according to analyst from VPS Securities.

The expanding middle class, expected to double from 13 per cent to 26 per cent of the population by 2026, is a key driver of this growth.

This demographic shift, combined with improvements in supply chain logistics and an increasing preference for branded, high-quality food products, is propelling the sector forward.

Supermarket chains such as WinMart and Bách Hoá Xanh have aggressively expanded their store networks, recognising the potential of modern grocery retail.

Moreover, Việt Nam’s rising appetite for imported goods presents opportunities for international brands entering the market. The growing penetration of quick-commerce platforms further supports the transition to modern grocery shopping.

A Long Châu pharmacy store, owned by FPT Digital Retail JSC. — Photo courtesy of the company

The country’s pharmaceutical and healthcare retail market is also poised for strong growth.

Healthcare spending is projected to increase by 7 per cent in 2025, with an ageing population expected to make up 17 per cent of the total population by the end of the year.

The demand for over-the-counter medications, supplements and health-related products is growing, leading to an expansion in modern pharmacy chains.

While the Information and Communication Technology (ICT) and Consumer Electronics (CE) segments have neared market saturation, growth opportunities still exist.

The smartphone market is expected to grow by 6 per cent in 2025, boosted by the adoption of 5G technology and AI-powered features.

In addition, Microsoft’s decision to end support for Windows 10 in October 2025 could drive demand for new personal computers, providing a boost to the laptop and desktop market.

Việt Nam’s potential upgrade to an emerging market status by September 2025 could attract substantial foreign investment, particularly into consumer-related stocks.

Analysts from MSB Securities predict that index-tracking funds may flow into Vietnamese equities, benefitting retail and consumer stocks the most. The resurgence of domestic tourism and increased consumer confidence further add to the sector’s appeal.

At the moment, VPS analysts said that certain retail sector stocks, including MWG of Mobile World Investment Corporation, FRT of FPT Digital Retail JSC and PNJ of Phú Nhuận Jewelry, are showing positive signals. — BIZHUB/VNS

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