Vietnam Market Insights Vietnam Market Insights

Retail vs Traditional Trade Vietnam

Retail vs Traditional Trade Vietnam

Market Overview

Vietnam’s retail market reached approximately $180-200 billion in 2024, representing one of Southeast Asia’s most dynamic retail environments. The sector is characterized by the coexistence of modern retail formats and deeply entrenched traditional trade channels.

Market Structure

By Channel Type

  • Traditional trade: 75-80% of retail value
  • Modern trade: 20-25% of retail value
  • E-commerce: 8-12% of retail value (included in modern)

Total Retail Value

  • 2024 estimate: $180-200 billion
  • Annual growth: 8-10% (CAGR)
  • Per capita retail: $1,800-2,000

Traditional Trade

Characteristics

  • Format: Mom-and-pop stores, wet markets, street vendors
  • Quantity: 1+ million traditional retail points
  • Average size: 20-40 sqm for shops
  • Operating hours: Often 12+ hours daily

Types of Traditional Retail

General Stores (Tap Hoa)

  • Number: 800,000+ nationwide
  • Characteristics: Family-owned, neighborhood focus
  • Product range: FMCG, basic household items
  • Credit: Often extend credit to regular customers
  • Margin: 10-15% typical

Wet Markets (Cho)

  • Number: 8,000+ markets nationwide
  • Structure: Stall-based, product category zones
  • Fresh focus: Produce, meat, seafood dominant
  • Social function: Community gathering points
  • Hours: Early morning (5-11 AM peak)

Street Vendors

  • Prevalence: High in urban centers
  • Products: Food, beverages, small items
  • Regulation: Ongoing management challenges
  • Informal: Often unlicensed, cash-based

Geographic Distribution

  • Rural areas: 85-90% traditional trade
  • Urban areas: 60-65% traditional trade
  • Small towns: 80-85% traditional trade

Consumer Profile

  • Primary shoppers: Older demographics, lower income
  • Shopping frequency: Daily or multiple times per week
  • Purchase size: Small, frequent purchases
  • Payment: 90%+ cash transactions
  • Decision factors: Proximity, relationships, credit

Modern Trade

Format Breakdown

Supermarkets

  • Count: 1,200+ locations nationwide
  • Major chains: Co.opmart, Big C, Lotte Mart
  • Size: 2,000-10,000 sqm
  • Format: Full assortment, self-service
  • Locations: Urban centers, provincial cities

Hypermarkets

  • Count: 200+ locations
  • Players: MM Mega Market, Aeon, Big C
  • Size: 8,000-20,000 sqm
  • Characteristics: Bulk offerings, parking, food courts
  • Target: Weekly shopping, families

Convenience Stores

  • Count: 5,000+ outlets
  • Chains: Circle K, Family Mart, GS25, Bach Hoa Xanh
  • Format: 24/7, small format (80-200 sqm)
  • Locations: High-traffic urban areas
  • Focus: Immediate consumption, top-up shopping

Specialty Retail

  • Electronics: The Gioi Di Dong, FPT Shop, Dien May Xanh
  • Fashion: Local chains, international brands
  • Pharmacy: Pharmacity, Long Chau
  • Home improvement: Limited penetration

Department Stores

  • High-end: Takashimaya, Parkson (limited)
  • Mid-market: Aeon, Lotte
  • Challenges: Limited success vs other formats

Cash & Carry

  • MM Mega Market: B2B and B2C
  • Metro (defunct): Formerly present
  • Target: Small retailers, restaurants, institutions

Market Share Analysis

By Product Category

Fresh Food

  • Traditional: 85-90%
  • Modern: 10-15%

Packaged Groceries

  • Traditional: 70-75%
  • Modern: 25-30%

Personal Care

  • Traditional: 60-65%
  • Modern: 35-40%

Electronics

  • Traditional: 20-25%
  • Modern: 75-80%

Fashion/Apparel

  • Traditional: 40-45%
  • Modern: 55-60%

Geographic Variations

  • HCMC: Modern 35-40%, Traditional 60-65%
  • Hanoi: Modern 30-35%, Traditional 65-70%
  • Tier 2 cities: Modern 15-20%, Traditional 80-85%
  • Rural areas: Modern 3-5%, Traditional 95-97%

Consumer Behavior Patterns

Traditional Trade Shoppers

  • Primary motivation: Convenience, proximity
  • Relationships: Personal connections with sellers
  • Freshness perception: Wet markets = fresher
  • Bargaining: Expected in traditional markets
  • Social interaction: Shopping as social activity

Modern Trade Shoppers

  • Primary motivation: Price, variety, trust
  • Experience: Air conditioning, cleanliness
  • One-stop: Multiple categories in one visit
  • Payment: Cards and digital accepted
  • Planning: Weekly shopping trips
  • Younger consumers: Moving to modern/e-commerce
  • High-income: Modern trade preference
  • Rural areas: Traditional trade persistent
  • Top-up shopping: Convenience store growth

Key Players

Domestic Retailers

Saigon Co.op (Co.opmart)

  • Stores: 800+ (largest domestic chain)
  • Formats: Hypermarkets, supermarkets, convenience
  • Presence: Nationwide, including rural
  • Strategy: Community focus, local products

Bach Hoa Xanh (The Gioi Di Dong)

  • Stores: 1,700+ convenience format
  • Focus: Fresh food, groceries
  • Location: Residential neighborhoods
  • Technology: App integration, delivery

WinMart (Masan)

  • Stores: 300+ (acquired from Vingroup)
  • Integration: Meat supply chain
  • Format: Supermarkets, mini-marts

International Retailers

Aeon (Japan)

  • Stores: 8 malls/supermarkets
  • Strategy: Malls with retail anchors
  • Target: Middle-class families
  • Expansion: Slow, selective

Lotte Mart (Korea)

  • Stores: 15 supermarkets
  • Format: Department store + supermarket
  • Challenges: Competition, local adaptation

Big C (Thailand)

  • Stores: 35+ hypermarkets
  • Ownership: Central Group
  • Strategy: Everyday low prices

7-Eleven (Regional)

  • Stores: 100+ (limited vs other C-stores)
  • Challenge: Local competition, pricing

Regulatory Environment

Licensing

  • Business registration: Required for all
  • Food safety: Certifications for food handlers
  • Trading hours: Some restrictions apply
  • Urban planning: Zoning for retail

Foreign Investment

  • Economic needs test: For new large-format stores
  • Distribution rights: WTO commitments implemented
  • Joint ventures: Common for foreign entrants

Modern Trade Regulations

  • Promotions: Limited frequency and duration
  • Supplier payments: Regulated terms
  • Store openings: Provincial approval required

E-commerce Impact

Channel Shift

  • Traditional → Online: Some grocery, electronics
  • Modern → Online: Showrooming effect
  • O2O integration: Click-and-collect, delivery

Hybrid Models

  • Bach Hoa Xanh: App + physical stores
  • ShopeeMart: Online supermarket
  • GrabMart: On-demand grocery delivery

Informal E-commerce

  • Facebook/Zalo stores: 200,000+ sellers
  • Live commerce: Emerging channel
  • Social sellers: Unregulated segment

Traditional Trade Challenges

  • Competition: From modern formats and e-commerce
  • Generational transfer: Children not continuing business
  • Regulation: Street vendor management
  • Supply chain: Inefficient, limited scale

Modern Trade Challenges

  • Profitability: High costs, competitive pressure
  • Real estate: Expensive urban locations
  • Supply chain: Cold chain gaps, distribution
  • Local competition: Intense price competition
  • Omnichannel: Integration of online-offline
  • Convenience focus: Small format, proximity
  • Private label: Retailer brands growing
  • Discounters: Value-focused formats emerging

Future Outlook

2027-2030 Projections

  • Modern trade share: 30-35% (from current 25%)
  • E-commerce: 20-25% of retail
  • Traditional: 50-55% remaining
  • Consolidation: Smaller chains acquired/exit

Format Evolution

  • Mini-supermarkets: Growth in residential areas
  • Specialty stores: Pet, organic, health focus
  • Digital integration: QR payments, membership apps
  • Sustainability: Packaging, sourcing considerations

Sources

  • Ministry of Industry and Trade
  • Vietnam Retail Association
  • NielsenIQ Retail Measurement
  • Kantar Worldpanel Vietnam
  • Company annual reports (Co.op, TGDĐ, etc.)
  • World Bank Retail Sector Analysis
  • General Statistics Office
  • Euromonitor International