Flock of foreign brands to Vietnam propels local retail market
The increasing presence of international brands in Vietnam highlights the potential for its retail market to expand, but there are concerns that foreign players may outcompete local businesses.
Flock of foreign giants to Vietnam’s retail market
A recent real estate market report by Avison Young Vietnam reveals that in the second quarter of 2024, Ho Chi Minh City’s retail real estate market saw 48,000 square meters of new supply from the Vinhomes-developed Vincom Mega Mall Grand Park, located in Thu Duc city.
HCMC’s total retail space is currently over 1 million m2, with more than 70% located outside the central areas. Shopping malls hold the largest market share in this segment, accounting for about 88%.

The Vincom Mega Mall Grand Park in Thu Duc city, HCMC, southern Vietnam. Photo courtesy of Vinhomes.
Trang Le, head of Consulting and Research at real estate service firm JLL Vietnam, noted that in Q2, the shopping mall market in HCMC recorded a net absorption of approximately 33,500 m2, mainly driven by non-central business district (CBD) areas.
For example, the Vincom Mega Mall Grand Park reported an absorption of nearly 29,000 m2, equivalent to an occupancy rate of 90% shortly after its opening in July. Notable tenants include South Korea’s CGV, occupying about 2,200 m2, and Japan’s Uniqlo with 2,000 m2.
Besides, Thisomall Phan Huy Ich in Go Vap district also attracted major brands such as Japan’s Muji with 2,000 m2, South Korea’s Kidscamp with 400 m2, and Hong Kong restaurant chain Chang Kang Kung with 400 m2. In contrast, the CBD market experienced a slight negative net absorption of around 1,200 m2, mainly due to the departure or downsizing of some underperforming tenants.
Speaking to The Investor, Trang Bui, CEO of Cushman & Wakefield (C&W) Vietnam, noted a probable continued expansion of foreign retailers in Vietnam across various sectors, including food and beverage, fashion, and luxury goods.
The increasing presence of international luxury brands in Vietnam is a notable trend with several drivers and positive impacts on the market.
In the first half of 2024, some outstanding activities by luxury brands included Hermès Paris opening a pop-up store at the Lotte Mall West Lake in Hanoi’s Tay Ho district. HCMC also witnessed several openings, such as Piaget’s first Vietnam store at Union Square, Cartier’s first Vietnam flagship store at Union Square, and Jacob & Co.’s first Vietnam flagship outlet on Dong Khoi street, District 1.
According to the C&W executive, the new supply of retail real estate in HCMC reached 52,421 m2 in H1, bringing its total supply to 1.13 million m2. The average monthly rent price was $53 per m2, up 3.6% year-on-year.
The occupancy rate reached 90%, relatively steady year-on-year and supported by the partial and full operations of new and renovated shopping malls with large occupancy rates. Additionally, some projects completed tenant restructuring and welcomed more large-scale tenants in the supermarket, interior design, fashion, and F&B segments, contributing to the overall occupancy growth.
Intense competition
According to experts from Avison Young, the retail real estate market in HCMC’s non-CBD area experienced more fluctuations in Q2 than the inner city. The average monthly rent price in the non-CBD area decreased by 4% compared to Q1, ranging from $20-$117/m2. This decline was primarily due to new project entrants to the market.
In contrast, the average monthly rent price in the central area fluctuated between $46 and $300/m2. Despite these fluctuations, the occupancy rate remained stable at 96% in the CBD area and 76% in the non-CBD area.
“The development of large-scale shopping malls that offer a variety of amenities and new experiences for customers is a highlight in the retail real estate market. Moving to locations outside the inner city has also become more convenient thanks to the improved transportation infrastructure,” Avison Young experts noted.
Trang Bui of C&W noted that the Vietnamese retail market has attracted increasing attention from luxury brands, driven by impressive economic growth in recent years, with an average GDP growth rate of over 4% per year.
The economic expansion has fostered a growing middle and upper class with substantial spending power for luxury products. With more than 17 million middle-class and near-rich young people, Vietnamese consumers are increasingly focused on quality and brand, especially in fashion, cosmetics, and jewelry. This trend boosts demand for luxury products, creating favorable conditions for international brands.
However, the increasing presence of foreign brands raises concerns about potential market imbalances, she noted.
Trang Bui explained that major retail groups such as Thailand’s Central Group, Japan’s Aeon, and South Korea’s Lotte and FamilyMart have rapidly expanded in Vietnam, highlighting the local retail market’s attractiveness to foreign investors.

The Lotte Mall West Lake, Tay Ho district, Hanoi. Photo courtesy of Lotte.
The entry of foreign brands not only intensifies competition but also promotes the development of the Vietnamese retail industry. These brands bring higher service standards, advanced technology, and new business models, thereby enhancing the shopping experience for consumers, she added.
Although foreign brands dominate a significant share of the market, this also creates opportunities for domestic brands to grow. With local advantages, domestic retailers can more easily secure prime property locations near residential areas nationwide.
Moreover, Vietnamese consumers still have a strong preference for traditional shopping, and cash payments remain prevalent. Vietnamese businesses, therefore, have ample room to expand. They can learn from international rivals and enhance their product quality and services to compete more effectively.
Foreign corporations like Aeon also contribute to Vietnam’s sustainable development through environmental and social initiatives. These efforts not only help improve their image but also bring long-term benefits to local communities.
In conclusion, while foreign brands rapidly expand in Vietnam, this does not necessarily mean they completely dominate the Vietnamese retail market. Instead, their presence can encourage healthy development and competition, benefiting both consumers and domestic businesses.
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