Solid numbers: A salesperson handles fabric at Dong Xuan market in Hanoi. In the first two months of this year, Vietnam’s retail sales of consumer goods and services grew 13% over the same period in 2022 to US$42.2bil (RM187bil). — Bloomberg
HANOI: Vietnam is becoming an attractive retail market for companies from all over the world, with many recent regional and global foreign direct investments (FDIs) announcing plans to increase capital and expand distribution networks here.
According to the Industry and Trade Ministry, the Vietnamese retail market is worth US$142bil (RM628bil) and is expected to increase nearly 2.5 times to US$350bil (RM1.5 trillion) by 2025.
In January, total retail sales of consumer goods and services decreased by 6% on the month to 481.8 trillion Vietnamese dong (US$20.4bil or RM90bil) due to weaker demand as many commodities were purchased ahead of the Lunar New Year. People spent more on festive activities post-Tet (Lunar New Year), according to the General Statistics Office.
However, it still rose 13% year-on-year.
For the first two months of this year, the country’s total retail sales of consumer goods and services advanced 13% over the same period in 2022 to over 994.1 trillion Vietnamese dong (RM186.9bil).
With stable and positive growth, the Vietnamese retail market has always been appreciated by foreign enterprises.
Thailand’s Central Retail Corp (CRC) recently announced a capital increase of US$1.45bil (RM6.4bil) in Vietnam. This is the largest investment ever announced by CRC, with the goal of doubling the number of stores to 600 in 57 of 63 provinces.
In 2023, the company spent more than 4.1 trillion (RM770.6mil) in the market, focusing on developing essential food businesses, stabilising prices, and restructuring electronic stores.
“Vietnam is the market, besides Thailand, that brings the largest revenue for the group, about 21% to 22% of total revenue. Last year, the number was 25%,” said Olivier Langlet, chief executive officer of Central Retail Vietnam.
One of the biggest Japanese retail companies, Aeon Co
Ltd is also accelerating the opening of shopping malls in the country by nearly three times, to about 16 by 2025, focusing on the food segment.
Last month, Aeon Mall in Hue City was completed on an area of 8.62 hectares with a total investment capital of about US$169mil (RM747.8mil). This is the biggest complex of trade centres and services in the region.
FDI is one of the important elements helping Vietnam transform itself into one of the most open economies in the region and growing quickly, according to a representative of HSBC Vietnam.
Currently, regional and global FDI investors and multinational corporations contribute to more than 80% of total export turnover from Vietnam and about 25% of domestic investment value.
HSBC research shows that by 2030, the Vietnamese domestic consumer market will outstrip Thailand, the United Kingdom and Germany.
“In 2023, we will see more multinational corporations in Asia showing an interest in Vietnam, engaging in the retail, semiconductors, electronics, mobile components, plastics, renewable energy and logistics industries. They are looking for ways to expand or make new investments in Vietnam,” said the representative. — Viet Nam News/ANN
