The domestic retail market of Vietnam is facing significant challenges as it navigates through weakened purchasing power and intense competition. Despite these obstacles, this sector remains one of the key pillars driving the socio-economic development of Hanoi and the country as a whole.
According to the Hanoi Department of Industry and Trade, the total retail sales of goods and service revenue for January 2025 are projected to hit approximately 84.9 trillion VND, marking an 8.6% increase compared to December 2024 and up 26.4% year-on-year. Notably, retailing accounted for 64.8% of this total revenue. During the pre-pandemic period from 2015 to 2019, consumer spending typically increased by 11.5% yearly. The current figure, though positively growing, highlights the subdued consumer demand due to the economic downturn.
Experts from Nielsen Vietnam, including Đặng Thúy Hà, reveal consumers are tightening their budgets, favoring home cooking, and postponing non-essential purchases. The shift is evident; many are seeking online discounts to lower their grocery spending, thereby increasing the demand for health-focused products and services.
Entrepreneurs and leaders recognize this adjustment as part of broader consumer behavior trends. Nguyễn Anh Đức, President of the Vietnam Retailers Association, emphasizes the necessity for businesses to develop flexible strategies, adapt swiftly, and renew their operations to align with shifting demands. His thoughts stress the importance of minimizing competition within sectors and fostering collaborations across industries.
To stimulate consumer spending and create opportunities for recovery, structural reformation within retail businesses is deemed obligatory. Market assessments indicate the continued growth of retail sales and service revenues remains below pre-pandemic levels, shedding light on the urgent need for strategic innovation within firms.
Nguyễn Kiều Oanh, Deputy Director of the Hanoi Department of Industry and Trade, outlined the city’s objective to advance the service sector's growth sustainably. She mentioned initiatives aimed at supporting local businesses, including expediting retail project timelines and enhancing service quality. The integration of traditional commerce with online markets also plays a pivotal role.
Significant efforts focus on improving the local consumer market through campaigns such as “Vietnamese prioritize Vietnamese goods,” integrating agricultural products from local regions, and promoting tourism-linked goods and services.
Near-term projections call for increased promotional activities and campaigns, with discounts reaching up to 100%. During the recent holiday seasons, retail businesses continuously engaged with promotional strategies to attract consumers, strengthening their market presence.
Addressing the future of retail, government officials stress the need to revamp support systems for manufacturers and distributors with consistent, long-term policies. Their collaboration will bolster the framework needed for economic stability and growth.
Beyond standard operational adjustments, companies are examining their digital transformation strategies. This shift is pronounced, emphasizing the rapid transition from offline businesses to versatile online formats, including integrating multiple sales channels.
Industry experts suggest old brands must undertake major transformations to maintain relevance. They are urged to focus on research and development (R&D) as part of their strategic innovations for staying competitive.
The food and beverage (F&B) sector, like retail, is experiencing rapid evolution pressures, especially with larger brands like Golden Gate potentially acquiring lagging ones such as The Coffee House. The market for digital grocery deliveries and non-cash payments is expected to grow, urging retailers to modify customer experiences from product offering to shopping applications.
Local brands like Vinamit and ABC Bakery, represented by their leaders, advocate for innovation, particularly by investing in new technologies and consumer-oriented products to attract modern customers. Meanwhile, Masan Consumer Holdings emphasizes its R&D capabilities to develop new products for market demands.
With tourism accelerating, international visitors contribute considerably to domestic spending trends, especially within the F&B sector. Analysts project sustained growth potential as favorable demographics and improved tourism drives continue to propel market expansions.
Yet, the path forward necessitates re-evaluated strategies to adapt to both rising competition and shifting consumer preferences. Brand loyalty appears volatile, compelling brands to tune their approaches to maintain consumer engagement and preference within this highly competitive retail environment.
For 2025 and beyond, as Vietnam’s retail sector evolves amid challenges, the imperative for innovation remains apparent, pushing firms toward fresh strategies and partnerships to capture market share and thrive.