Vietnam retailers face increasingly tough competition

Vietnam's retail sales have increased gradually over recent years (Chart 1) with a forecasted strong growth compared to other Asian countries (Chart 2). However, in comparison to other regional countries, Vietnam still appears to be the underdog (Chart 3).

Chart1

Source: Economist Intelligence Unit

Chart 2

Source: Economist Intelligence Unit

Chart 3:

Source: Economist Intelligence Unit

Vietnam’s Consumer Confidence Index (CCI) is above the global average. Despite the positive outlook, Vietnamese consumers remain prudent when spending their money.  

Source: Nielson, Q4/2015

*Methodology: CCI is calculated based on respondents with online access in 60 countries which allows for tremendous scale and global reach and provides a perspective only on the habits of existing Internet users, not total populations.

Demand for goods in Vietnam has been rising continuously. 

Source: Economist Intelligence Unit

Demand for clothes has been rising consistently since 2011.

Source: Economist Intelligence Unit

As demand for retail goods increases over the years together with consumer confidence remaining positive, a boost in Vietnam's retail is worth noted. By the end of 2015, Hanoi was recorded to have about 900,000 square meters of retail space, while it was 600,000 square meter in HCMC.

However, with the recent strong growth of foreign retailers, Vietnam's retailers may face pressure from tough competitors.

Key retailers in Vietnam as of 2016