Vietnam’s rural areas emerge as key retail frontier as middle-class households expected to surge 2.3-fold by 2030: broker

Vietnam’s rural areas, home to over 60% of the population, are emerging as a key growth frontier for retailers as consumers increasingly prioritize product quality and food safety, according to a report by major broker Saigon-Hanoi Securities JSC (SHS).

Vietnam is likely to see a more widely distributed consumer class over the next decade, SHS said in its December retail sector report.

It cited McKinsey & Company data showing that between 2020 and 2030, the number of households with annual income above $22,000 outside the 15 largest cities is set to grow 2.3-fold, outpacing Hanoi (1.8-fold) and Ho Chi Minh City (1.6-fold).

Specifically, the number of middle-income households in HCMC is projected to rise from 1.4 million to 2.2 million during the period, while Hanoi is expected to fare slightly better, from 1.5 million to 2.6 million.

In the group of other localities, excluding the two mega-cities and 13 major cities, the figure is expected to climb from 3.6 million in 2020 to 8.4 million by 2030.

Vietnam’s retail goods market is set to expand 77% by 2030 compared with 2025, driven by a large, young, and increasingly wealthy population, ranking seventh globally in consumer numbers, SHS said.

The firm noted that domestic retailers have significant room for growth and market share gains, supported by their large store networks and deep understanding of local consumer preferences and spending habits. By 2030, Vietnam’s total food retail market would reach $85 billion, with FMCG (fast-moving consumer goods) accounting for 12–15%.

Compared with other countries in the region, Vietnam’s modern trade (MT) channel remains underdeveloped, leaving room for future retail expansion.

Its modern retail accounts for just 19% of total sales, well below Southeast Asian peers such as Thailand (60%), Indonesia (32%), and the Philippines (52%).

Acknowledging the potential in rural areas, major retailers have been expanding their market share.

Masan Group (MSN) has developed the "WinMart+ Rural" strategy, with the goal of opening 1,900 new “WinMart+ Rural” stores in 2025.

“In recent years, Vietnam's rural areas have witnessed a wave of urbanization and strong changes in consumer habits. In this context, WinCommerce (WCM) - a member of Masan Group's consumer ecosystem - is emerging as one of the leading forces leading the trend of modernizing the rural retail market,” Masan said.

Bach Hoa Xanh, a grocery chain operated by Vietnam’s leading retailer Mobile World Investment Corporation (MWG), officially launched its ambitious “Northward expansion” campaign at the end of 2025. The rollout of 20 stores in Ninh Binh province on November 28 marked the opening salvo in its push to conquer the north and north-central regions.

Aiming for $10 billion in revenue by 2030, Bach Hoa Xanh is betting heavily on the rising consumer class in nonurban areas.

McKinsey & Company said in its “The new faces of the Vietnamese consumer” report that over the next decade, 36 million more consumers may join Vietnam’s consuming class, defined as consumers who spend at least $11 a day in purchasing power parity (PPP) terms.

Consumption power has become more distributed over the past decade. While consumption had largely resided in the nation’s two major economic and financial hubs, Hanoi and HCMC, other cities are also developing into economic forces. In 2020, Hanoi and HCMC accounted for 37% of all Vietnamese households with income of more than $22,000 a year in 2011 PPP terms, but this share could drop to 31% in 2030. Growth in the number of middle-class households in smaller cities (and even rural areas) is outpacing those in Hanoi and HCMC - a compound annual rate of about 8%, compared with 5%.

Competitive local consumer-facing industries are already pursuing rural consumers over a broad geographic area. Companies that have confined themselves to serving consumers in Vietnam’s two leading cities will need to broaden their approach. To reach around 50% of the population with incomes of more than $22,000 per year, companies typically need to plan distribution to the top 15 cities.

Major retail players are seeking to capture new opportunities by investing not only in key cities but also in a broad swath of non-urban areas whose overall population is large.