75% of Vietnam retailers expect recovery, growth in 2023: survey

Up to 74.5% of retailers expect recovery and growth in 2023, according to a survey conducted by Sapo, a leading provider of sales management platforms in Vietnam with over 150,000 customers.

The survey with over 15,000 respondents showed that 12.18% expect strong growth, 36.18% plan expansion, 29.03% aim to diversify their portfolios, and only 2.85% target cost optimization.

A total 25.43% of retailers with pessimistic views of business in 2023 quoted reasons of instability in the global geopolitical situation, risks of economic recession, high inflation, and others.

Sapo said the trend in 2023 will see retailers expand their sales channels, put products on more platforms, and utilize online sales, as customers become more open to new choices, and new brands, at new locations. E-commerce will remain the main driver of the country’s digital economy, Sapo added.

Another notable trend is “shoppertainment,” a content-driven commerce that seeks to entertain and educate first while integrating content and community to create highly immersive shopping experiences.

Growth in 2022

The survey pointed out that 42% of retailers recorded decreases in their revenues in 2022, while 37.72% posted growth in their revenues. Besides, 6.36% of sellers had their revenues jump above 30% last year.

Most retailers with growth last year operated in sectors involving fashion accessories, cosmetics, consumer goods, mini stores, and toys.

Retailers with revenues shrinking by over 30% were in sectors of household goods, mother-baby goods, and medicine and supplement goods.

Sapo noted most retailers were not willing to invest much in marketing. As many as 58.3% of retailers spent less than 10% of their revenues on marketing while 32.4% allocated between 10% and 20%. The three most popular marketing channels were advertisements on social media, on-site promotions, and advertisements on e-commerce sites.

Popularity of multi-channel retailers

The survey noted 57.65% of retailers sold their products via both offline and online channels, while 23.71% and 17.35% utilized only offline and online channels, respectively.

Among online channels, e-commerce platforms were the most popular with 49.69% of retailers using this channel, followed by Facebook with 39.13%, and websites with 9.94%. Sapo emphasized the rise of TikTok Shop, with 1.24% despite its debut last year.

Overall, offline stores were rated the best sales channel with a score of 7.2 over 10, followed by social media with 6.9, e-commerce with 6.67, and websites with 5.76, Sapo said.

Sapo also reported that most retailers were of small scale, with 62.07% of stores employing fewer than five staff, 21.12% with five-10 staff, and only 7.33% with over 10 employees.

Vietnam's retail sales of goods and services this year rose 19.8% to almost VND5,680 trillion ($240.2 billion), according to the General Statistics Office. The value is 15% higher than that in 2019, a pre-pandemic year. Sales in December rose 17.1% from a year earlier.