Vietnam’s 2020 retail sales see lowest growth in nine years
Vietnam’s total revenue from retail trade and services reached over VND5 quadrillion (US$219.5 billion) in 2020, representing a modest yearly rise of 2.6%, according to the General Statistics Office (GSO).
This year’s retail sales growth was much lower than 9.5% seen in 2019 and was also the lowest rate in the 2011-2020 period due to the significant impact of the COVID-19 pandemic.
Revenue from retail sales of consumer goods exceeded VND3.9 quadrillion, up 7% year-on-year or accounting for 79% of the total. Especially, revenue increased by 10.7% for food and foodstuff; 7.5% for the group of household appliances, tools and equipment; 3% for garments and 1% for cultural and educational services.
Meanwhile, revenue from accommodation and catering services dropped by 13% year-on-year to VND510.4 trillion, making up 10% of the total. Last year, the revenue from these services saw a yearly increase of 9.8%.
Other services also experienced a slight revenue decline of 4% to VND535 trillion in 2020.
However, VNDirect Securities forecast that the nation's retail sales growth would bounce back to pre-COVID-19 levels next year, reaching 8.5-9% year-on-year.
The projection was made on the back of the country’s successful containment of COVID-19, which was a major contributor to the economic rebound in the third quarter that saw unemployment fall 0.23% against the previous quarter to 2.5%.
VNDirect also predicted that consumer confidence would likely recover soon, against a backdrop of COVID-19 vaccines expected to be available in 2021.
With the rapid growth of the middle class and rising per capita income, domestic consumption remained the main growth driver of the retail industry, even during COVID-19.
The Ministry of Industry and Trade expected the domestic trade sector’s added value to contribute 13.5% to GDP by 2025 and total retail sales of goods and services to grow around 9-9.5% annually over the next five years.
The ministry forecast that total retail sales would reach nearly US$350 billion by 2025.
The market’s recovery offers huge opportunities for retailers to expand their distribution networks.
Saigon Co.op is targeting to add at least 2,000 stores to its chain over the next five years, with revenue rising 8-10 percent annually.
Major Japanese retailer Muji, which sells a wide variety of household and consumer goods, has opened its first store in Vietnam, in HCM City, and is planning to open another in Hanoi, it added.