Vietnamese consumers increasingly price-sensitive, favor promotions: expert

Vietnamese consumers are becoming more sensitive to prices, prioritizing promotions, and seeking more cost-effective shopping options, according to Ralf Matthaes, CEO of market research company IFM Research.

However, there remains a segment of customers willing to spend on high-end products such as cosmetics, fashion, and personal electronics, he noted at a recent seminar on the prospects of Vietnam’s retail market in 2025.

According to Matthaes, consumers entered 2025 with a cautious mindset. Up to 41% of consumers show a decline in savings ability. Inflation continues to impact shopping behavior, with spending primarily focusing on essential items like education, food, and health care. Meanwhile, spending on non-essential categories has decreased.

These changes present a significant challenge for retail businesses in maintaining purchasing power and adjusting business strategies, he said, adding brands need to strike a balance between price optimization, enhancing customer experience, and tapping into the premium consumer segment.

At the same time, the strong shift towards e-commerce continues to shape shopping habits, particularly among younger customers with essential products. To adapt, retailers need to invest in digital platforms, optimize the customer journey, and build trust through seamless shopping experiences.

In the Asia-Pacific, Nancy Wong, senior manager of research and consultancy at Savills Asia-Pacific, assessed that retail sales in the region are expected to maintain growth momentum in 2025. Compared to other countries in the region, Vietnam’s retail market remains on a year-on-year growth trajectory, second only to India.

Moreover, international tourist arrivals to the region continued to improve in 2024, with many destinations forecast to fully recover by 2025. This will contribute positively to the growth of Vietnam’s retail sector, she said.

Before the pandemic, China was the most important source market for the region's tourism industry. However, the decline in arrivals from this market has led to a contraction in the retail sector.

Regarding the industry's prospects, Wong analyzed that food and beverage, sportswear, fitness, and healthcare brands will drive the demand for retail spaces in 2025. An important reason for this is the growing emphasis on healthy living and the rise of outdoor activities.

She noted that geopolitical tensions could disrupt supply chains and increase global economic instability. At the same time, fluctuations due to the new U.S. administration may create unpredictable factors.

Nguyen Thu Trang, brand director at Manpower, commented that in the Asia-Pacific region, more than 76% of employers face difficulties in finding skilled workers.

In the retail sector, the resignation rate is currently at 25%, placing significant pressure on businesses. Key soft skills that employers are seeking include adaptability, problem-solving thinking, teamwork, and creativity. Furthermore, there is a growing demand for skills in customer experience management, digital technologies, and data analytics.

Vietnam a destination for major retail groups

This year, Vietnam's retail market is expected to reach $350 billion, contributing 59% of the total state budget.

Matthew Powell, director of Savills Hanoi, commented that the retail market in Vietnam is growing positively under the government's strong guidance on stimulating consumption, supporting production, and developing the domestic market.

Compared to Thailand, Indonesia, or Singapore, it is still in the development stage but has made significant breakthroughs post-pandemic, he remarked.

Previously, Vietnamese consumers tended to shop abroad, especially in Bangkok, due to the presence of many international brands. However, today, with increasing domestic consumption, many international brands have recognized the potential for expansion in Vietnam. At the same time, with a young population and high purchasing power, Vietnam is gradually becoming an attractive destination for major retail groups.

In the period from 2025 to 2030, the market is expected to see even stronger growth, enabling it to compete with leading countries in the region.

Retail space supply outlook

In Q4/2024, the total supply of retail space in major cities like Hanoi and Ho Chi Minh City remained stable. Shopping malls continue to dominate the supply, accounting for 63%. The market will witness the appearance and expansion of new-generation shopping malls that integrate diverse amenities to enhance the customer experience.

Hanoi continues to maintain its appeal on the retail map with the launch of several new shopping malls. After the success of Lotte Mall Westlake in 2023, 2025 will welcome Hanoi Centre – a project managed, operated, and exploited by global asset manager Keppel. Looking ahead, in 2026, the market will become more dynamic with the appearance of Thiso Mall and Toshin at the Starlake urban area in Tay Ho district.

Hoang Nguyet Minh, senior director of commercial leasing at Savills Hanoi, noted that investments from major groups like Aeon, Lotte, and Keppel will not only attract more international brands but also boost consumption, contributing to strong growth in Hanoi’s retail market during the 2025-2026 period.

Meanwhile, in Ho Chi Minh City, the lack of new supply is leading to diversification in sales channels and factors like technology and consumer trends. Shopping malls always maintain high occupancy rates, but Tu Thi Hong An, senior director of commercial leasing at Savills HCMC, emphasized the need to maintain dynamism through continuous renovations and innovations to keep competition high in the retail sector.