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    Vietnam’s retail industry rebounds with fresh energy.

    The Resurgence of Physical Retail: A Vibrant Shift in Consumer Behavior

    A Surprising Comeback

    In a landscape once dominated by the rapid rise of e-commerce, many forecasted the demise of brick-and-mortar stores. However, recent trends reveal a surprising resurgence in interest for physical retail locations, transforming them into vibrant destinations for shopping, social interaction, and unique experiences.

    Mall Foot Traffic on the Rise

    According to Savills’ Impacts 2025 report, global retailers are rebounding at a pace that exceeds earlier predictions. In the United States, mall foot traffic saw a promising increase of 1.5% year-on-year in 2024 and a substantial 7.3% compared to pre-pandemic numbers from 2019. Most remarkably, almost 80% of consumer spending in the U.S. still occurs in physical stores, highlighting that despite the digital age, the allure of in-person shopping remains strong.

    Ho Chi Minh City: A Retail Hotspot

    Vietnam’s Ho Chi Minh City exemplifies this retail renaissance. In the first quarter of 2025, the city’s total retail space surged to 1.6 million square meters—a 6% year-on-year increase. With an impressive occupancy rate of 94%, the demand from both retailers and consumers is evident. Even with newer, lower-priced developments entering the market, the average rental rates for ground-floor spaces stood at 1.4 million VND per square meter per month (around $55), reflecting a notable 9% increase from the previous year.

    The Dominance of Modern Retail Formats

    The trend toward modern retail formats continues to shape the landscape. Malls like Thiso Mall Sala, Vincom Mega Mall Grand Park, and Parc Mall quickly achieved over 70% occupancy shortly after opening. Yet, traditional street-level retail is lagging, often due to inadequate investment in customer experiences and amenities—elements increasingly prioritized by Vietnamese shoppers.

    Shifting Dynamics in Hanoi

    Hanoi is witnessing similar dynamics, with a 6% year-on-year surge in ground-floor rental rates. In central areas, this rise reaches as high as 37%. The overall occupancy rate stands at 86%, reflecting a shift in tenant emphasis from food and beverage dominance to a growing focus on fashion, cosmetics, and convenience stores.

    Retailers as Investment Leaders

    Interestingly, the retail landscape has shifted from being primarily investment-driven to retailer-led. No longer do investors solely dictate market trends; brands in fashion, cosmetics, home furnishings, and food and beverage sectors are now setting the pace and drawing in capital. Despite past hesitations stemming from underperforming retail assets, global institutions are expected to allocate merely 12.4% of their 2025 portfolios to retail real estate, down from 27.7% in 2018. Nonetheless, signs of recovery are emerging, particularly in the latter half of 2024 when capital flow into this sector picked up.

    The Attraction of Vietnam for Global Brands

    Tran Pham Phuong Quyen, Senior Manager of Retail Leasing at Savills, highlights Vietnam’s appeal to international brands. With a young, dynamic population eager for experiential shopping, coupled with lower labor and construction costs compared to regional peers, Vietnam offers a fertile ground for brands seeking to optimize costs and enhance profitability.

    Retail as an Operational Asset

    A paradigm shift is occurring where retail is no longer treated merely as real estate but as an operational asset. As consumers demand more immersive experiences, retail spaces require seamless management integration, the application of advanced technology, and a deep understanding of shopper behavior. Modern malls need to function as complete ecosystems, where every aspect—from tenant mix to marketing strategies—plays a critical role in operational efficiency.

    Data-Driven Decisions in Retail

    As landlords and brands seek to enhance their operations, the reliance on data-driven consultancy becomes pivotal. This shift highlights the necessity for both parties to not only connect tenants with suitable spaces but also to engage in negotiations informed by deep market insights. Professional advisory services will grow in importance, supporting landlords and tenants alike in navigating this evolving landscape.

    Long-Term Strategy for Success

    The development of successful retail locations requires long-term, synchronized strategies. Developers must ensure that leasable spaces meet high standards and that they cultivate capable leasing and operations teams. Clear communication is essential in transforming new projects into regional attractions, marking retail real estate as a long-haul venture with sustained potential.

    Opportunities in the Retail Sector

    By 2025, the outlook for the retail sector is brightening, especially in dynamic markets like Vietnam. Its youthful population, evolving consumer behaviors, and efficient operating costs position it as a strategic destination for global brands aiming for success. Yet, experts caution that the retail industry in Vietnam is at a crossroads—it must evolve to keep pace with global economic fluctuations or risk being left behind.

    The Role of Supportive Policies

    For businesses to thrive in this vibrant landscape, supportive policies are crucial. Nguyen Anh Duc, Chairman of the Vietnam Retail Association, advocates for local governments to revamp commercial zoning and prioritize the development of modern logistics hubs and transportation systems. Such initiatives will be vital in reducing operational costs and enhancing competitiveness for Vietnamese products.

    The Rise of Green Retail

    Additionally, the emergence of eco-conscious shopping trends cannot be ignored. Younger generations are increasingly prioritizing sustainability, opting for products that reflect their environmental values—from organic food to recyclable packaging. This shift not only reshapes consumer choices but also influences retail strategies, urging brands to align with evolving consumer expectations.


    The evolving narrative of retail underscores the need for adaptation, innovation, and a keen understanding of consumer behavior. As physical stores reclaim their status, they transform into experiences much more than mere shopping venues, creating a vibrant new chapter in the retail landscape.

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