Retail industry’s liberalisation reforms coupled with increasing income levels of consumers are all set to drive Vietnam retail industry to post CAGR of 22.7% during 2009-2012.
A compact but dynamic retail market in Vietnam is developing by leaps and bounds even amid global economic slowdown. Almost all industry segments emerged as highly investment prone, contributing strongly to the overall growth of the retail industry.
In their latest market research, “Vietnam Retail Analysis (2008-2012)”, research firm RNCOS emphasised that the retail sector in Vietnam is much smaller as compared to other developing economies in Asia, but it has shown strong fundamentals and buoyant expansion in comparison of its neighbors like India and China. The market has been registering double-digit growth in recent years. Vietnam's accession to the World Trade Organization (WTO) has further opened the market for foreign investments, which will ultimately transform into even rapid market developments, driving the industry to experience a boom from 2009 onwards.
Vietnam retail industry is set for high growth.
The report further revealed that food retail is currently dominating the overall retail industry. Food retail sales in Vietnam grew at a compound annual growth rate (CAGR) of over 16% during 2005-2008 and accounted for about two-third of the total retail sales. In addition, the non-food segment is also getting excellent response in view of growing interest for western-style shopping among people. Non-food retailing is basically driven by clothing, footwear, and cosmetics & toiletries segments. With rising income, consumers are becoming more fashion and look conscious, and spending more on their clothing and cosmetic products.
The report further reveals that some of the entirely new segments of the industry have been getting encouraging response from consumers. For example, food service sector is expanding at a much faster pace in urban centers, and the fast food sector, which is still in its infancy, is strengthening its roots, especially in service class population.