The Evolution of Vietnam’s Retail Market: A Shift Towards Experience and Quality
By Savills analysts
Mon, February 2, 2026 | 2:03 PM GMT+7
Vietnam’s retail landscape is undergoing a significant transformation, moving towards higher-quality retail models that prioritize consumer experience. This shift reflects the changing preferences of urban consumers who are increasingly sophisticated in their shopping habits.
Record-Breaking Growth
In 2025, Vietnam’s retail market reached an impressive estimated value of $269 billion. This growth signifies a boost of 9-10% in total retail sales of goods and consumer service revenue year-on-year, marking the fastest growth period in five years, excluding the pandemic disruptions. The Vietnam Domestic Market Report 2025, released by the Ministry of Industry and Trade’s Agency for Domestic Market Surveillance and Development, acknowledges this surge as a clear indication of a recovery in domestic consumption and renewed consumer trust.
Key Drivers of Change
Matthew Powell, the director of Savills Hanoi, identifies crucial factors fueling this growth. Demographic shifts and rising household incomes are at the core, with Vietnam inching closer to an upper-middle-income status. This economic ascent is fostering increased consumer spending on retail, education, dining, and lifestyle services, establishing a sustainable demand pattern in the market.
A Dynamic Retail Cycle
According to Powell, Vietnam currently finds itself in an exceptionally vibrant retail cycle, characterized by heightened demand from both international and domestic brands. This period sees a diverse range of retail formats expanding—encompassing e-commerce, traditional shopping, and home delivery systems.
Urbanization is reshaping consumer habits, transforming retail from mere shopping venues into destinations for experiences, social interactions, and lifestyle activities. Gen Z and Millennials, who make up approximately 60-70% of foot traffic in urban shopping centers, are instrumental in this shift. Retail spaces that seamlessly incorporate food and beverage options, entertainment, and community engagement are thriving.
The Role of Technology
Technology and digital platforms play pivotal roles in facilitating this retail evolution. The boom in e-commerce, alongside improved smartphone access and internet connectivity, has enhanced shopping convenience. However, it’s essential to note that digital retail acts more as an extension of physical stores rather than a substitute. Many brands are embracing omnichannel strategies—leveraging digital platforms to streamline operations and strengthen ties with their physical locations.
Supportive Economic Environment
A favorable macroeconomic landscape continues to bolster Vietnam’s retail growth. Inflows of foreign direct investment (FDI), regulatory enhancements, and a business-friendly environment are fostering job creation and higher income levels, which are crucial components of a thriving retail market. Consumer confidence is soaring, fueled by the cumulative effects of these positive changes.
Forward-Looking Prospects
As we look to the future, the outlook for Vietnam’s retail sector remains bright. Long-term drivers suggest that growth will be stable as the market continues to gravitate toward higher-quality retail experiences that meet the evolving needs of urban consumers. This shift promises not only to redefine shopping but will also enhance the overall retail environment in Vietnam, setting the stage for exciting developments in years to come.
This transformation in Vietnam’s retail market highlights the dynamic interplay between consumer preference and market evolution, presenting an evolving landscape rich with opportunities for businesses and consumers alike.