Vietnam retail reaches a five-year high: Key drivers behind the growth

Vietnam’s retail market is gradually shifting towards higher-quality retail models that place greater emphasis on experience and cater to the increasingly sophisticated needs of urban consumers, write Savills analysts.

Vietnam’s retail market reached an estimated $269 billion in 2025, with the total retail sales of goods and consumer service revenue increasing by 9-10% year-on-year, the fastest growth in the past five years, excluding the period of disruption caused by the pandemic.

According to the Vietnam Domestic Market Report 2025 published by the Agency for Domestic Market Surveillance and Development under the Ministry of Industry and Trade, this increase clearly reflects the recovery of domestic consumption and improved consumer trust.

Matthew Powell, director of Savills Hanoi, noted that the core drivers of this growth stem from structural factors, particularly demographic changes and rising household incomes. As Vietnam approaches upper-middle-income status, consumers are spending more on retail, education, dining and lifestyle-related services, thereby creating a sustainable source of demand for the market.

A dynamic retail cycle driven by strong demand from international brands

According to Powell, the current period represents a particularly active cycle for Vietnam’s retail market. Expansion demand is coming from a wide range of brands, including international and domestic players. The market is also becoming more sophisticated, with the parallel development of e-commerce, traditional retail, shopping centers and home delivery models.

Urbanization and changing consumer habits are also shaping demand. Retail is no longer just for shopping; it has become a place for experiences, socializing and daily activities. This shift is most visible among Gen Z and Millennials, who account for 60-70% of footfall in urban shopping centers. As a result, malls, retail streets and mixed-use developments are performing well, especially those with strong food and beverage, entertainment and community offerings.

Technology and digital platforms continue to act as key enablers. E-commerce has grown rapidly, supported by smartphones and internet accessibility, improving convenience for shoppers. However, digital retail acts as an extension of physical stores, not a complete alternative. Many brands are adopting omnichannel strategies, using digital platforms to improve efficiency and strengthen connections with their brick-and-mortar networks.

Finally, a favorable macroeconomic environment continues to drive growth. Strong inflows of FDI, improvements in the regulatory framework, and a more business-friendly environment are contributing to job creation, higher incomes and stronger consumer confidence, all fundamental in a successful retail market.

Looking ahead, Vietnam’s retail growth will remain stable, supported by long-term drivers. The market is gradually shifting towards higher-quality retail models that place greater emphasis on experience and cater to the increasingly sophisticated needs of urban consumers.