Growth prospects and challenges

At the seminar "Retail 2025: Identifying Opportunities and Market Prospects," Nancy Wong, Senior Manager, Research and Consulting Department at Savills Asia-Pacific, said: "Retail sales in the Asia-Pacific region are expected to continue growing in 2025, with Vietnam maintaining an annual growth rate, second only to India. Notably, international tourist arrivals in the region are projected to fully recover by 2025, contributing positively to Vietnam's retail industry."

Despite positive growth prospects, the market still faces certain risks. "Geopolitical tensions could disrupt supply chains, and uncertainties from the new U.S. administration may introduce unpredictable factors. However, overall, the retail leasing market remains relatively promising, with expectations of gradual recovery in 2025," warned Wong.

Beyond regional dynamics, Vietnam's retail market has also witnessed strong post-pandemic growth. According to Matthew Powell, Director of Savills Hanoi: "Compared to Thailand, Indonesia or Singapore, Vietnam's retail market is still in a developing phase but has made remarkable progress. In the past, Vietnamese consumers preferred shopping abroad, particularly in Bangkok due to the presence of many international brands. However, with rising domestic demand, global brands are increasingly recognizing Vietnam’s potential for expansion."

Data from the General Statistics Office further supports this growth. Reports indicate that the total retail sales of goods and consumer service revenue in 2024 are estimated to reach VND6.391 trillion, up 9% from the previous year. Meanwhile, the Ministry of Industry and Trade forecast that the retail market in 2025 could reach US$350 billion, contributing 59% to the state budget.

Recognizing new trends in retail

Along with market expansion, consumer behavior is also undergoing significant changes. Ralf Matthaes, Managing Director of IFM Research, commented: "The consumer confidence index for 2025 remains at 54%, while 41% of consumers indicate a decline in their saving ability. This means that spending will focus on essential goods such as food, education and healthcare, while expenditures on non-essential items will decrease." Notably, e-commerce continues to play a crucial role in shaping shopping behavior. "Retail businesses need to invest in digital platforms, optimize the customer journey, and target the premium consumer segment to sustain purchasing power," added Matthaes.

Beyond domestic factors, valuable insights can be drawn from international markets. Stephanie Lau, Senior Manager, Retail Leasing at Savills China, highlighted: "The Shanghai retail market is witnessing a shift from shopping malls to standalone street stores. Global brands such as Gentle Monster, Aesop and Supreme are expanding their presence in high-traffic shopping districts like Nanjing Road to enhance brand recognition and establish closer connections with customers." She highlighted the growing athleisure trend in China, blending sportswear with everyday fashion. "This presents a major opportunity for Vietnamese retail brands as consumers seek convenience, style and functionality," she said. Beyond business model shifts, legal frameworks also shape industry growth. Tran Manh Hung, Managing Lawyer at BMVN International LLC, said that under the CPTPP roadmap, the Economic Needs Test (ENT) requirement was supposed to be lifted by January 15, 2024. However, the removal process had been delayed, creating challenges for business expansion. He also highlighted that licensing procedures, property ownership regulations and fire safety standards remained major obstacles.

From a labor market perspective, the retail sector continues to face significant workforce challenges. "76% of employers in the Asia-Pacific region struggle to find skilled workers. Particularly in the retail sector, the turnover rate is as high as 25%, placing immense pressure on businesses. Companies should focus on internal training, flexible work policies, and enhancing digital skills to attract and retain talent," said Nguyen Thu Trang, Brand Director at ManpowerGroup Vietnam.

In Vietnam, Hanoi and Ho Chi Minh City remain vibrant retail hubs with the emergence of new shopping malls. Hoang Nguyet Minh, Senior Director of Commercial Leasing at Savills Hanoi, said that Hanoi continued to attract investment with the launch of numerous shopping centers. She added that the Hanoi Centre project, managed by Keppel, was expected to be a major highlight in 2025, along with the openings of Thiso Mall and Toshin at Starlake in 2026.

Similarly, the retail landscape in southern Vietnam is undergoing notable transformations. Tu Thi Hong An, Senior Director of Commercial Leasing at Savills Ho Chi Minh City, said that the southern retail market was diversifying across multiple sales channels, with modern commercial models emerging. Shopping malls must constantly innovate to remain competitive and meet changing consumer demands.