The World Bank says Vietnam's per capita income growth from 2017 to 2022 was 8.5%, the highest in Southeast Asia and almost double the world's average growth rate. The middle-class and urban population have increased rapidly in recent years in Vietnam, leading to a rapid increase in consumption.

Last year Vietnam's retail sales exceeded 180 billion USD, and that’s expected to grow steadily in the coming years. In 2023, retail sales of goods and services totaled 254 million USD, up 9.6%.  

These factors are making Vietnam a high-potential market for retailers and creating an opportunity for domestic businesses to develop brands and expand domestic distribution channels for quality Vietnamese goods, local goods with national brand recognition, and key products of localities.

Mai Thi Thuy, Chairwoman of the Hanoi Women's Association of Small and Medium Enterprises, said efforts have been made to innovate, explore, recognize new consumer trends, and develop effective plans and strategies.

“Businesses must innovate. They can’t continue to follow the old ways. They need to apply the latest knowledge and technology to business management. Enterprises also need to track market information and State incentives. These are the things businesses must do to survive and grow,” said Thuy.

Domestic consumer spending accounts for 60-65% of GDP, of which household spending is 50-55%. A population of 100 million people, including 20 million middle-class people, creates a huge demand, and it’s forecast that by 2026 about 4 million more people will join the middle class.

Economist Dinh Trong Thinh said the new consumer trend requires businesses to adapt to product demand, instead of producing whatever items are easiest for them.

Thinh called on businesses to track the domestic consumer market because Vietnam’s 100 million people with rapidly increasing incomes will create a rising demand for goods.

“If we can meet consumer demand, our production and trading will recover very fast. This is an utterly important driving force for future sustainable development,” said Thinh.

Although Vietnamese goods have enjoyed an increasingly secure position recently, they still face challenges. New-generation free trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement have brought many new imported products to the domestic market.

Nguyen Anh Duc, Chairman of the Vietnam Retailers Association, said the government’s incentives need to create a stable long-term stimulus effect and provide direct support to businesses.

He said, “Contactless and cashless payment platforms must be promoted. There needs to be investment in logistics and distribution connections and digital transformation of the retail service industry. From the perspective of retail businesses, computers will make shopping more convenient.”

Experts said online shopping channels need to be improved so as to cut business costs, boost market shares, and increase revenues.

With exports facing challenges, the domestic market will play a key role in the national economy, and stimulating purchasing power in the domestic market is one of the best ways to boost production and trade and guarantee economic recovery.