Retailers race to fix store experience in Vietnam

As Vietnam’s middle class grows, retailers are investing in offline store formats.

Vietnam’s retail market is experiencing rapid growth, powered by a young, increasingly affluent population and strong demand for both online and offline shopping. While e-commerce in Vietnam is projected to reach US$30 billion in 2025, much of the action is still taking place in physical stores—and retailers are racing to adapt.

According to Luan Nguyen, Principal at Boston Consulting Group (BCG), total retail sales hit approximately US$260 billion last year, supported by a combination of rising incomes and a fast-expanding middle and affluent class. “According to the BCG proprietary CCI model, the middle and affluent class will reach 50% of Vietnam's total population by 2030 which is 1.5 times the numbers now,” he said.

This demand-side momentum is being met with aggressive expansion by both domestic and international retailers. “We see new supermarkets, convenience shops and malls opening from big cities to rural towns as well,” Nguyen said. “If you add in urbanisation and better retail infrastructure, you have a huge recipe for robust offline retail growth.”

Retailers are also refining their pricing and promotional strategies to stay competitive in a highly price-sensitive market. “Vietnamese shoppers are price conscious and promotion hungry,” Nguyen said. A recent BCG survey found that 44% of customers look for promotions before making a major purchase.

“It’s not just about having a low price across the board,” he noted. “With the help of AI, we can actually simulate the demand... which will give us a better ROI overall.”

Beyond pricing, in-store experience is emerging as a key differentiator in Vietnam’s retail landscape. “The in-store experience itself has... leveled up to keep people coming back,” Nguyen said. He cited examples such as mini coffee shops with free Wi-Fi and ready-to-eat meals integrated into store layouts.

Large retailers are also investing in play zones for children and frequent events that foster a sense of community. “The extra creates a sense of community and experience that actually online stores cannot offer,” he said.