The nation is becoming an attractive retail market for companies globally with many regional and global FDI investors recently revealing their plans to increase capital and expand distribution networks here.
According to details given by the Ministry of Industry and Trade, the Vietnamese retail market is valued at US$142 billion and is expected to increase by nearly 2.5 times to US$350 billion by 2025.
In January, total retail sales of consumer goods and services decreased by 6% on-month to more than VND481.8 trillion, equal to US$20.4 billion, due to weaker demand as many commodities were purchased ahead of the Lunar New Year. In addition, people spent more on festival activities in the post-Tet period, said the General Statistics Office.
However, it still marked an annual rise of 13%.
For the first two months of the year, the country’s total retail sales of consumer goods and services advanced by 13% over the same period from 2022 to over VND994.1 trillion.
Due to stable and positive growth, the Vietnamese retail market has always been appreciated by foreign enterprises.
Thailand’s Central Retail Corporation (CRC) recently announced a capital increase of US$1.45 billion in Vietnam. This represents the largest investment ever announced by CRC with the goal of doubling the number of stores to 600 in 57 of 63 provinces. This year has seen the company spend over VND4.1 trillion in the market, with a specific focus on developing essential foods businesses, stabilising prices, and restructuring electronic stores.
Vietnam is the market, along with Thailand, that brings in the largest revenue for the group at about 21% to 22% of total revenue. Last year, the overall figure stood at 25%, said Olivier Langlet, CEO of Central Retail Vietnam.
Furthermore, Aeon Co., Ltd, one of the largest Japanese retail companies, is also in the process of accelerating the opening of shopping malls in the country to nearly three times to about 16 by 2025, focusing largely on the food segment.
Last month, saw Aeon Mall in Hue begin constructing on a site spanning an area of 8.62 hectares, with a total investment capital of roughly US$169 million. This is the biggest complex of trade centres and services throughout the region.
FDI is one of the most important elements which can help the nation to transform itself into one of the most open economies in the region and grow quickly, according to a representative of HSBC Vietnam.
Currently, both regional and global FDI investors, as well as multinational corporations, contribute to more than 80% of total export turnover from the country and about 25% of domestic investment value.
Research from HSBC indicates that by 2030 the Vietnamese domestic consumer market will outstrip that of Thailand, the UK, and Germany.
“In 2023, we will see some multinational corporations in Asia showing their interest in Vietnam, engaging in retail, semiconductors, electronics, mobile components, plastic, renewable energy, and logistics industries. They are looking for ways to expand or make new investments in Vietnam,” the representative added.
VOV
