Rise of e-commerce

E-commerce is rapidly reshaping consumer habits in Viet Nam. According to the ‘Vietnam e-commerce Intelligence Report 2025’ by YouNet ECI and YouNet Media, the total transaction value of e-commerce in Viet Nam has the potential to reach US$ 49.9 billion by 2028.  

E-commerce has a number of advantages, including faster buying, product variety, and easy price comparisons. Digital platforms, particularly, enable businesses to reach a broader customer base without geographical limitations. However, lack of in-store experience, delivery time constraints, and concerns regarding product quality. 

Role of physical retail in Vietnam   

Meanwhile, brick-and-mortar retail stores retain a vital role by offering tangible shopping experience, in-person consultation services, and fostering customer trust.  

Matthew Powell, Director of Savills Ha Noi said: “Viet Nam has a distinctive traditional market culture, where grocery stores and physical retail spaces are essential in daily life. Retail spaces are not just transaction points but also places connection and community building. As such, retail stores will continue to maintain a significant presence in the market.” 

In Viet Nam, shopping centres and retail spaces maintain high occupancy rates and show potential for development in new directions to meet new consumer demands. Key retail markets such as Ha Noi and Ho Chi Minh City (HCMC) have reported active activity. In Q4/2024, retail space occupancy in Ha Noi remained stable at 85%, while HCMC reached 93.5%. 

Shift to a new hybrid model 

The Director of Savills Ha Noi also noted that the integration of online retail and traditional brick-and-mortar stores allows businesses to maximise their advantages, with leveraging digital technology to expand while ensuring a seamless customer experience. Major brands are heavily investing in this hybrid model to offer convenience for customers while preserving the value of physical retail spaces. 

Resilience of physical retail in Vietnam 

Hoang Nguyet Minh, Senior Director of Commercial leasing, Savills Ha Noi said that e-commerce is still too young in Viet Nam to significantly affect the demand for retail space.   

The expert shared: “Currently, e-commerce platforms report better sales from local Vietnamese brands and individual retailers. In contrast, foreign retail brands entering the market will priorities expanding their physical presence by opening flagship stores to build brand awareness before boosting e-commerce sales.

As such, international brands have not abandoned physical stores to entirely focus on online strategy. In the next five years, e-commerce is unlikely to reduce the demand for retail spaces in Viet Nam, and demand for retail space remains high.”

Limited supply of retail space

However, Minh acknowledged that Viet Nam still faces a limited supply of high-quality retail space, particularly well-designed shopping centres that meet brand requirements.

Compared to regional markets like Thailand, Singapore, and Malaysia, Viet Nam’s retail space lags in terms of scale, quality, and experience. Over the past five years, the supply of retail spaces in Ha Noi has only grown at an average rate of 3% annually.

The market still favours landlords due to a limited number of high-quality and well-planned shopping centres. The growth in modern retail space supply is still lagging behind leasing demand from international brands.