Retail market shows strong growth in Vietnam
Retail market shows strong growth in Vietnam
The prevention policy in Vietnam for the Covid-19 pandemic has been highly effective, and as a result of it, there has been very positive economic growth. Despite the global economic slump caused by the pandemic, Vietnam's retail market jumped in size. Vietnam can boast of being one of the sixteen most successful emerging economies in the world in 2020. The reason behind this was that many well known international retail brands decided to invest in Vietnam.
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In 2016, the Vietnamese retail market welcomed the entry of ‘Zara’, the famous Spanish fashion brand. The experience of buying well known fashion brands in home country, which earlier were available only for those who traveled abroad, is truly a luxury. This explains the excitement of Vietnamese people in general and fashion followers in particular, when hundreds of people waited in line for the Zara store to open. Just five years later, shopping options in Vietnam have become even more exciting.
Popular brands around the world such as Zara, H&M, Uniqlo, and Decathlon are drawing crowds in malls across the country. Uniqlo stores on Dong Khoi street in Ho Chi Minh City and on Pham Ngoc Thach street in Hanoi are among top four largest Uniqlo stores in Southeast Asia. Seeing great opportunities in Vietnam, leading Japanese international brands Matsumoto Kiyoshi, MUJI, Haidilao, Uniqlo, and Fila have expanded their network, choosing to open large stores in prominent locations in busy downtown districts of Vietnam’s two biggest cities.
In 2020, when the entire world was reeling under the disastrous effects of the Covid-19 pandemic, Vietnam was able to reach a GDP increase of 2.91%, one of the highest in the world. Vietnam is also the only country in ASEAN to have shown positive growth in 2020. The Asian Development Bank (ADB) forecast that Vietnam's economy will quickly recover to 6.3% by 2021. In the effort towards a strong economic recovery, retail is being seen as a bright spot. According to the General Statistics Office, the size of this market increased by about USD 11 bn in 2020. Experts forecast that if the growth rate continues to be as high as previous years, then in just two years, Vietnam's retail market can reach USD 200 bn.
Therefore, the resurgence of the Covid-19 pandemic in February 2021 did not significantly affect the growth forecast for 2021. According to trade economists, Vietnam's retail market is forecast to have a strong rebound with 11% revenue growth in 2021, outperforming any other Southeast Asian country. Vietnam is also the 6th ranking market in the group of 30 countries with attractive investments in the global retail sector in recent years. The more optimistic signals will become clearer when the disease situation has been brought under control, and Vietnam has imported the vaccine for general population use. While many other countries are still looking for a thaw in their economies, Vietnam has shown and proven its resilience.
The consumer trend among the Vietnamese people has also changed in a positive direction. According to an Ipsos report on consumer behavior, 55% of Vietnamese still believe that the domestic economy will get better in the next six month period. This figure in other countries in the region, including Indonesia, Malaysia, Philippines, Singapore, and Thailand, is only 45%. Many experts forecast that Vietnam will attract investment flow of big international brands in 2021, especially in the retail segment.
