Buoyant middle class drives domestic retail market development: insiders
Recently, in addition to improving service quality and restructuring models, retail systems have continuously increased the number of their stores and supermarkets in Vietnam, showing that the domestic retail market still has an ample room for development.
With various advantages and favourable conditions, this market is forecast to continue to be a bright spot of growth in the coming time.
On June 1, BRG Group JSC and its Japanese partner, Sumitomo Corporation, opened their 11th Fujimart supermarket in Hanoi in Ba Dinh district’s Giang Vo street.
Earlier on May 25, the 10th Fujimart supermarket was inaugurated on Thanh Xuan district’s Chinh Kinh street.
These moves are part of the two sides’ joint-venture contract on expanding the grocery supermarket chain in Vietnam, towards opening 50 new stores throughout the country by 2028.
Meanwhile, on May 18, Aeon, a leading distributor in Japan, started work on the Aeon Mall Tan An in Long An province, marking the eighth of its kind in Vietnam and the first in the Mekong Delta region. This mall is expected to be put into operation in late 2025.
"In 2024, AEON Vietnam plans to open a variety of stores with different models and scales. Not only AEON shopping malls, we will develop more AEON outlets at shopping centres of other partners. Although the areas vary, all AEON Vietnam touch points fully meet customer needs from food, household goods, mother and baby products, to fashion," said Director General of Aeon Vietnam Furusawa Yasuyuki.
By the end of 2024, the total number of business locations of the member companies within the AEON Group in Vietnam is expected to exceed 160 sites, including shopping malls, supermarkets, specialty stores, general merchandise stores and supermarkets, convenience stores, children's play areas.
Meanwhile, General Director of WinCommerce Nguyen Thi Phuong said that last year, the company opened and renovated more than 1,700 supermarkets, bringing the total number of its supermarkets and stores across the country to more than 3,600. This year, it aims to open 400-700 new stores and supermarkets to reach over 4,000 touch points nationwide.
According to the General Statistics Office (GSO), Vietnam’s total retail sales of consumer goods and services during January-May increased 8.7% year-on-year to top 2.58 quadrillion VND (101.3 billion USD).
Revenue from retail sales of goods was estimated at more than 1.99 quadrillion VND, accounting for 77.5% of the total and up 7.4% against the same time last year.
GSO Director General Nguyen Thi Huong said that the domestic retail market still has a lot of room for retailers to develop both in width and depth, as the average income of people is increasing. The middle class is growing rapidly, and Vietnam's consumption to GDP ratio is also high compared to other countries in the region.
Associate Professor, Dr. Nguyen Thuong Lang from the National Economics University commented that increasing touch points, and improving service quality show that retail businesses, including big foreign retailers, see the trend of the Vietnamese retail market with great potential that has not been fully tapped. This will be the driving force for domestic retail to aim for higher standards, and protect and develop brands.
Economist Ngo Tri Long recommended retailers to innovate business methods, bring quality products with reasonable prices to consumers as quickly as possible, and have promotional and after-sales policies to retain buyers and create brand reputation.
