In Southeast Asia’s fastest growing economy, retailing beckons – but patience is a virtue

Vietnam saw overall retail spend on goods and services hit 7.093 qa Vietnamese dong (VND, EUR 237.68 bn) in 2025, jumping 10 per cent from 2024. According to the Overview Report on Vietnam’s Domestic Market 2025, released by the country’s Agency for Domestic Market Surveillance and Development – a body under the Ministry of Industry and Trade – this marked the highest growth spurt for Vietnamese retail in the last five years, excluding the Covid-19 pandemic years of 2021 to 2022.

Of the total retail revenues from goods for that year, spending on household appliances and equipment accounted for 11.3 per cent, or VND 611 tn. This is a seven per cent growth from 2024. Meanwhile, sales of wood and construction materials totalled VND 498 tn, contributing 9.2 per cent of the total take. This reflected a whopping 17.2 per cent increase year on year – one of the highest growth rates among the main retail categories.

Authorities expect overall retail spend to continue expanding 10 to 12 per cent annually between this year and 2030, to reach VND 11.5 qa to VND 12.5 qa by the end of the period. The double-digit growth of the sector is not happening by chance – the exports-driven country has been laying the groundwork for bolstering domestic consumption to hedge against the impacts of global oil price volatility, shifting trade policies in the United States, and geopolitical risks.

Measures that incentivise spending – including a temporary two-per cent reduction in value added tax; the acceleration of public investment that supports construction, provides employment, and subsequently increases consumers’ spending power; and a low interest rates regime – were put in place last year to spur local purchases.

Even so, the country’s fundamentals have already been creating a retail-friendly environment; Vietnam’s gross domestic product (GDP) grew eight per cent in 2025, the strongest expansion in 20 years excluding 2022 and overshooting the Southeast Asian average of five per cent. Its middle class has expanded from 10 per cent of the population in 2020 to 40 per cent currently. Four years from now, it is expected to account for more than half of the country’s total population.  

Of Vietnam’s 101 million people, 67 per cent are in the working age group. Meanwhile, the country’s urban population rose from 38.1 per cent in 2020 to 44.3 per cent in 2024. By the end of the decade, urbanites are going to make up 50 per cent of the people in Vietnam.

"This expansion…