The retail sector in Vietnam is expected to record double-digit growth between 2019 and 2024, according to a new report that coincides with further upbeat projections delivered at a retail conference in Hanoi.

The study, released by global analysts ResearchAndMarkets, noted that although traditional retailers accounted for 94% of grocery sales in Vietnam last year, industry experts forecast modern retail outlets to take 18% of total food sales by 2024.

Several factors underpin the trend, the report said, including Vietnam’s growing middle-class, its large and youthful population and their growing demand for convenience and willingness to spend rather than save.

Nearly 40% of the country’s population is aged under 25 and their average income per capita has been growing at about 30% every two years.

They are also spending more on clothing, consumer electronics, holidays and other goods and services as the proportion of this young demographic who set aside spare money for savings declined from 76% in 2016 to 63% in 2017.

With younger consumers and the middle-class placing more emphasis on convenience, this is being reflected in growth of the convenience store market.

Circle K, for example, already has a strong presence in Ho Chi Minh City and is expanding across Hanoi, while Vinmart+ has nearly 900 shops in Vietnam.

Meanwhile, delegates at a conference organised by the Economic and Forecast Magazine, heard details about the opportunities – and challenges – facing the retail sector in Vietnam.

Le Xuan Dinh, the magazine’s editor-in-chief, forecast that competition would step up between local and foreign retailers as well as between modern and traditional retail channels, Vietnam Plus reported.

And Vu Vinh Phu, chairman of the Hanoi Supermarkets Association, predicted that development of information and technology would improve the productivity of retailers at the same time as changing the shopping habits of consumers.

However, delegates were also warned that the country’s retail market needs a comprehensive development strategy to boost domestic trade.

While expressing confidence that the sector has significant potential, Le Viet Nga from the Ministry of Industry and Trade cautioned: “It is necessary to promote the sustainable development of the retail market, based on diversifying retail sale channels and developing retail infrastructure.”

Sourced from ResearchAndMarkets; additional content by WARC staff