Vietnam is at 11th spot in the A.T. Kearney Company’s Global Retail Development Index (grdi). The index is based on all relevant macroeconomic and retail-specific variables. The special feature of this index not only identifies the markets that are most attractive today, but also those that offer future potential.
The report of A.T. Kearney Company showed that Vietnam has low market saturation. From 2011 - 2015, Vietnam saw a continuous growth in retail turnover, worth 2.47 trillion VND (111 trillion USD), accounting for 76.2 percent of the total retail and consumption value.
Market research companies and experts forecast the retail market of Vietnam see great prospects for high growth in the future, driven by a population of 91.7 million with high consumption demands with Vietnam’s stable economic growth rate. These positive factors provide an attractive backdrop for development of the retail industry. A relatively young population, coupled with rising income levels, increased urbanisation, and an attractive business environment supported by lower trade barriers and reduced corporate tax rates, have enhanced Vietnam’s position as a high potential growth market.
Vietnam’s GDP has grown 5.2 per cent annually since 2013, the highest among its Southeast Asian peers also ranked in the GRDI. Export growth and a 17 per cent increase in foreign direct investment has spurred economic growth, underpinned by Vietnam’s geographic advantage and low labour costs. This foundation led to impressive growth in 2015 in the retail sales area (22 per cent) and in retail sales (9.5 per cent).
Many companies has joined the retail market including both domestic and foreign companies such as: Vietnam’s Vingroup, which opened 93 stores in 2015 and plans to open twice as many in 2016; Japan’s FamilyMart, which will open more than 100 stores in 2016; and 7-Eleven, which is entering the market through a franchise agreement with Seven System Vietnam. Convenience stores have become a phenomenon in Viet Nam with estimated growth of more than 260 per cent in the number of stores since 2012.
Apple opened a subsidiary in Viet Nam, which allows it to import and distribute cellphones directly to a market that now has more than 150 million mobile phone subscribers who increasingly desire smartphones.
South Korean hypermarket operator E-mart launched its first Vietnamese store in the Go Vap District of Ho Chi Minh City, before announcing further plans to expand its network to 52 stores by 2020. AEON also introduced Topvalu to Viet Nam in late 2015, tapping into the popularity of Japanese culture to offer authentic Japanese ingredients and home cooking kits.
In addition, E-commerce in Viet Nam is expected to grow as the use of mobile phones spreads and online shopping becomes more common. E-commerce campaigns are ramping up, including Online Friday, held by onlinefriday.vn, which attracted 1.1 million visitors and close to 2,000 participating retailers.
For the first five months this year, Vietnam's total retail sales and services revenue reached 1,430 trillion VND (63.4 billion USD), a year-on-year increase of 9.1 percent. Meanwhile, the purchasing power of goods retailers witnessed high growth of 9.5 percent in the period, amounting to 1,920 trillion VND (48.5 billion USD), accounting for two-thirds of the total retail sales and services revenue.
