The retail sector’s positive performance in Vietnam is expected to generate new opportunities for the domestic real estate market, according to industry experts.
The Ministry of Industry and Trade forecasts that the retail market will reach USD 350 billion in 2025, contributing 59% to the national state budget. This growth is driven by a series of governmental initiatives designed to stimulate domestic consumption, support business activities, and expand local markets.
Several factors are contributing to this growth, including a large and youthful population, a rapidly expanding middle class, an increase in affluent young consumers, a booming e-commerce market, a rise in tourism, and significant investment from global retail brands. This has made Vietnam increasingly attractive to international businesses looking to capitalize on the country’s growing purchasing power.
A recent survey by Savills Vietnam noted that while Vietnam’s retail market is still developing compared to countries like Thailand, Indonesia, and Singapore, it has made substantial progress post-COVID-19. Many Vietnamese consumers previously preferred shopping abroad, particularly in Bangkok, due to the dominance of international brands there. However, as domestic demand rises, Vietnam is becoming an appealing destination for global brands seeking to tap into its youthful, affluent market.
Looking ahead to the period between 2025 and 2030, Vietnam’s retail market is expected to see even stronger growth, positioning the country as a major competitor in the regional market.
Retail Supply in Major Cities Remains Stable with Growth in Hanoi
The total retail supply in major cities like Hanoi and Ho Chi Minh City remained relatively stable as of Q4 2024. In Ho Chi Minh City, retail supply grew by 1% from the previous quarter and 6% year-on-year, while Hanoi’s supply remained stable quarter-to-quarter, with a 2% increase year-on-year. Shopping malls continue to dominate the market, accounting for 63% of the total retail supply.
A noticeable trend is the rise of new-generation retail centres that integrate diverse amenities, enhancing the overall customer experience.
Hanoi’s Role as a Retail Hub
Matthew Powell, Director of Savills Hanoi, highlighted that consumers are entering 2025 with a cautious mindset, evidenced by the consumer confidence index holding steady at 54%. Inflation is continuing to influence spending habits, with a growing preference for essential categories like education, food, and healthcare. Non-essential categories have seen a decline in consumer spending, and price sensitivity is on the rise. Despite this, certain segments—especially in beauty, fashion, and personal electronics—remain willing to spend on premium products.
In response to these changes, retailers will need to adapt their strategies to maintain purchasing power. Experts recommend balancing price optimization, enhancing customer experience, and targeting premium consumer segments to succeed in the evolving market.
Hoang Nguyet Minh, Senior Director of Commercial Leasing at Savills Hanoi, emphasized Hanoi’s continued role as a retail hotspot, with several new shopping centres expected to launch. Following the success of Lotte Mall in 2023, 2025 will see the debut of Hanoi Centre by Keppel, which is anticipated to generate similar success. The retail market will remain active in 2026 with the opening of Thiso Mall and Toshin at Starlake. Major corporations such as Aeon, Lotte, and Keppel are expected to attract more international brands and boost consumer spending.
Southern Market Remains Strong Despite Supply Constraints
In Ho Chi Minh City, the retail market has experienced significant growth, spurred by innovations in sales channels, technology, and shifting consumer trends. The city faces a shortage of new retail supply, yet shopping malls continue to maintain high occupancy rates. To stay competitive in an increasingly crowded retail landscape, these malls are continuously innovating and undergoing renovations. This dynamic approach is key to maintaining relevance in the evolving retail sector.
With strong backing from global investors and the rise of innovative retail concepts, Vietnam’s retail sector will continue to drive growth in the real estate market, especially in key urban centres like Hanoi and Ho Chi Minh City. The strategic investments and new developments in these cities are set to further enhance their positions as regional retail hubs.
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