The Vietnamese retail market is witnessing notable growth, fueled by changing consumer behaviors and trends within the retail real estate sector. Industry experts gathered recently at the Vietnam Retail 2025 conference to discuss these changes and opportunities for stakeholders.
According to the General Statistics Office, the total retail sales and service revenue for 2024 is projected to reach 6.39 trillion VND, marking a 9% increase compared to the previous year. With predictions from the Ministry of Industry and Trade estimating the retail market size to reach $350 billion by 2025, the outlook appears positive, contributing 59% to the national budget. Matthew Powell, Director of Savills Hanoi, highlighted the strong support commercial rental real estate has received alongside retail sector growth but cautioned against the many challenges faced.
Ralf Matthaes, Executive Director of IFM Research, echoed similar sentiments, noting the cautious consumer sentiment reflected by a consumer confidence index of just 54%. He stated, "Changes to consumer behavior due to cautious spending impact retail business strategies." Observations are also made about the spending patterns, where inflation has generated sensitivity around prices, leading customers to prioritize essentials such as education and food over discretionary items.
Meanwhile, substantial shifts toward e-commerce are occurring, particularly among younger consumers, thereby changing shopping habits. Matthaes stated, "These changes pose significant challenges for retail businesses to maintain purchasing power and adjust their business strategies." The retail real estate segment is expected to maintain its stability; for cities like Ho Chi Minh City, there was a measured 1% quarter-on-quarter and 6% year-on-year increase in retail space availability, showcasing resilience.
Legal updates within the Vietnamese market continue to influence the retail sector, as highlighted by Trần Mạnh Hùng, Executive Attorney at BMVN International LLC. He pointed out the complex legal atmosphere surrounding retail locations, ownership rights, and safety regulations. Although the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) aimed to exempt certain Economic Need Tests effective January 15, 2024, delays persist, which could create hurdles for businesses seeking expansion.
On the retail front, even with acknowledged difficulties, successful trends have been observed, particularly shared by Stephanie Lau, Senior Manager at Savills China. Lau noted how retailers are adapting by pivoting toward lifestyle products and directly connecting with customers outside typical shopping centers. "These changes could provide valuable lessons for the Vietnamese market," she said, emphasizing the potential of companies to adopt storefronts positioned strategically outside malls for greater brand presence and customer engagement.
One of the remarkable shifts noted at the Vietnam Access Days conference on February 27 was the focus on male consumer products within the lifestyle segment. Lê Trí Thông, CEO of PNJ, remarked, "We have served women for 35 years, but now we recognize there is also interest from men for jewelry." This pivot reflects changing consumer dynamics as PNJ expands its product offerings to cater to the male market.
Thống’s insights on the adjustments being made at PNJ highlight the focus on younger clientele, especially those born at the tail end of the 1990s, adopting new marketing strategies aligned with modern consumer lifestyles. He stated, "The pursuit of emotional value and lifestyle elevation through our products reflects a shift, particularly on important cultural occasions such as the Day of the God of Wealth. The introduction of exclusive jewelry collections aligns both investment with daily utility."
Continuing this theme, PNJ's commitment to integrating technology effectively enhances market reach, allowing for bespoke consumer insights and experience adjustments, as Thống pointed out. "We’ve undergone significant transitions from traditional jewelry manufacturers to lifestyle retailers by utilizing technology strategically to boost customer interaction and satisfaction."
The company's financial growth reflects its success; since 2012, PNJ’s revenue has surged nearly sixfold, reaching approximately 38 trillion VND by the end of 2024, with the firm’s market capital increasing significantly, showcasing its resilience and successful adaptation to the changing marketplace. This evolution has been recognized with PNJ’s increasing brand value, which soared from $98 million in 2017 to $480 million today.
The rising demand for lifestyle-oriented retail, combined with increased investment from larger groups, is set to fortify the Vietnamese market. Hoàng Nguyệt Minh from Savills Hanoi projects continuous appeal from retail developments will prevail as new shopping centers emerge. "The structured investments from leading conglomerates will not only attract global brands but also significantly uplift consumer spending, aiding retail growth within Hanoi during the 2025-2026 phase," she concluded.
Overall, as various experts assessed the retail real estate scene, they conveyed mixed signals: high potential driven by innovation and consumer adaptability, alongside challenges posed by economic uncertainties and legal inertia. For the Vietnamese retail sector to thrive, stakeholders must embrace these shifting paradigms and craft agile strategies responsive to modern consumer behaviors.
Vietnam’s future retail real estate trends indicate promising growth prospects as businesses recalibrate their strategies to align with consumer demands and preferences for accessible, engaging, and lifestyle-oriented experiences.