Trend Watch

Trend Watch is a weekly segment that highlights emerging trends within Vietnam. Whether its industry, market, or sector specific, here at GMV we always have our finger on the country’s pulse.

This week’s trend watch takes a look at Viet Nam’s retail sector.

In a 2008 report by the Kearney Global Retail Development Index Viet Nam was named the best emerging market for retailers (Geller, 2008). Previously, international companies could only enter to the market via joint partnerships with Vietnamese owned businesses. The relaxing of these restrictions has allowed the country to experience growth despite the relatively small retail sector (Geller, 2008).

Despite its size, this sector of the country has many factors working in its favour. Competition is relatively small due to the historical constraints placed on the country due to its previous communist-oriented economic structure. Additionally, young Vietnamese are migrating to urban centers within the country and with more disposable income than in generations past (Geller, 2008).

Viet Nam is expected to see total retail sales of nearly $76 billion by the end of the year (“Number of,” 2010). Its total number of retail stores and supermarkets will climb to 850 in the same time (“Number of,” 2010). At least 15 major international retailers are already in Vietnam or have plans to expand into Vietnam. Among these are companies such as Wal-Mart, Citimart, Metro Ag, and the Parkson Retail Group (“Number of,” 2010). These foreign-owned businesses have contributed to Vietnam’s tremendous growth in the retail sector where only two years ago the retail market was valued at $20 billion (Geller, 2008).