Retail in Vietnam: fast modernisation from a traditional base

How the market is shaped

Traditional trade — wet markets and small independent shops — still accounts for a large share of everyday spending, but modern trade is taking share every year, led by domestic chains expanding mini-supermarket formats into dense residential areas.

Malls are concentrated in the two big cities and a handful of provincial capitals, and are used heavily for food service, entertainment and air-conditioned weekend traffic. For fashion and beauty, the shophouse street location still competes seriously with the mall unit.

• Mini-supermarket and convenience formats are the growth engine
• Shophouse streets remain a genuine alternative to malls in the two big cities
• North and south differ in taste, pricing tolerance and brand loyalty
• Manufacturing growth is creating provincial demand outside the big two

Channels, payment and last mile

E-commerce is among the fastest growing in the region and is dominated by regional marketplaces plus live and social selling. Cash on delivery is still a substantial share of orders, though bank transfer via QR and wallets have grown quickly.

Motorbike-based last mile makes urban delivery cheap and fast. Provincial delivery is workable but slower, and address quality varies enough that courier contact rates matter more than distance in service planning.

Entering the market

Foreign retailers can own local entities in most retail activities, but opening additional outlets beyond the first can trigger an economic needs test at provincial level, which adds time and unpredictability to a rollout plan. Build that into the schedule rather than discovering it at store three.

Product registration and Vietnamese labelling requirements apply to food, cosmetics and supplements, and customs practice can vary between ports, so a customs broker with local experience is not a luxury.

What surprises first-time entrants

• The second store can be harder to open than the first
• Northern and southern taste differences are commercial, not cosmetic
• Live commerce sets price expectations before your store does
• Provincial industrial cities are a real demand pool, not a rounding error

Vietnam in numbers

Before any of the qualitative detail matters, it helps to see the shape of the market. Vietnam has around 100 million people, trades in Vietnamese dong (VND), and concentrates its modern retail in Ho Chi Minh City, Hanoi, Da Nang and Hai Phong. Those three facts already rule several store formats in or out.

The channel split below is the number most often misread. Modern trade headlines get the coverage, but the share of retail value still sitting outside organised formats decides how much of the market a mall-and-marketplace strategy can actually reach in the first three years.

Where the demand actually sits

National figures hide the only distribution question that matters: which regions can you serve at a cost that leaves margin. In Vietnam, modern retail sales are far from evenly spread, and the gap between the leading region and the rest is usually wider than the gap between Vietnam and its neighbours.

Read the split below as a sequencing plan. The first region gets stores, stock and service levels; the second gets a lighter version of the same promise; the rest is served online or through partners until volume justifies fixed cost.

• Serve Ho Chi Minh City properly before adding a second region
• Set delivery promises per region rather than nationally
• Price freight into regional P&Ls; a national average hides loss-making routes
• Expect assortment, not just price, to differ between regions

How customers pay, and what that costs you

Bank QR transfer is widely used even by small merchants, sitting alongside wallets rather than replacing them. In practice the wallet set you need to support is MoMo, ZaloPay, VNPay and VietQR bank transfer, and adding one late is a development project rather than a switch.

Cash on delivery is around 27% of online orders. That single number drives failed-delivery rates, cash handling, working capital and the size of your returns team, so it belongs in the first version of the business case rather than in an operations annexe.

Getting goods in and out

Imports arrive through Cat Lai and Hai Phong ports, Tan Son Nhat and Noi Bai airports. Motorbike delivery with very low unit costs in the two main cities. North-south distance means two distribution centres rather than one national hub.

Cold chain is the part most first-time entrants budget wrongly: Developing quickly but still a bottleneck for chilled and frozen assortments. If any part of the assortment is chilled, frozen or temperature-sensitive, decide the cold chain question before signing the first lease.

Rules that shape the offer

Ownership: Foreign-invested retailers face an economic needs test for additional outlets in many cases Licensing: Investment registration plus a trading licence per outlet

Labelling and import rules decide the launch date more often than the store build does. Vietnamese-language labelling is mandatory, including importer details Customs valuation and product registration timelines should be planned generously E-invoicing and tax administration are digital and strictly enforced

The trading calendar

The peaks that matter are Tet, Mid-autumn festival, Double-date online sale days and Back to school. Tet dominates the year: demand spikes, then the country effectively closes for a week.

Trading peaks are supply chain deadlines dressed as marketing moments. Work backwards from the peak to the shipping date, and treat the buying decision as the real deadline.

• Tet — lock stock and staffing at least one quarter ahead
• Mid-autumn festival — lock stock and staffing at least one quarter ahead
• Double-date online sale days — lock stock and staffing at least one quarter ahead
• Back to school — lock stock and staffing at least one quarter ahead

People, property and the cost base

Wages are competitive and the workforce is young, but experienced retail managers are scarce Retail leadership talent is the scarce input, not floor staff

On property: Developer-led malls in the two main cities; street-front retail still matters commercially Prime street-front rents in central districts can rival mall rents Leases typically run Three to five years; street-front leases are less standardised, which sets how long a bad location stays on the books.

The consumer side rounds it out. Young, urbanising and highly brand-curious, with fast-rising incomes Very high social commerce engagement and heavy voucher use Value-conscious but responsive to newness and limited drops

Grocery and everyday trade

Mini-supermarkets and convenience are expanding fast against traditional wet markets The names to know: Domestic chains lead on store count, with international players in larger formats

Fresh is where the market shows its real habits: Daily fresh shopping habits persist, so location convenience beats basket size Any everyday-goods proposition is judged against that baseline, whether or not you sell food.

What can go wrong

None of these risks are exotic; they are the ones that repeatedly cost money in Vietnam and that a regional plan built elsewhere tends to miss.

• Planning around one national distribution centre
• Ignoring the economic needs test when modelling store rollout
• Underpricing returns in a cash-on-delivery-heavy channel