Vietnam, strategically located in Southeast Asia, is emerging as a dynamic and rapidly developing market. With its proximity to China, Laos, Cambodia, and access to the South China Sea, the country offers significant geographic and economic advantages. Covering approximately 331,000 square kilometres and housing an estimated 101.5 million people as of May 2025, Vietnam has undergone remarkable transformation since introducing economic reforms through Đổi Mới in 1986.
Economic Growth
Vietnam’s economic trajectory has been extraordinary. From being among the world’s poorest nations in 1986, Vietnam has transitioned into a middle-income economy within a generation. According to the World Bank, real GDP per capita increased from less than $700 in 1986 to nearly $4,500 in 2023, demonstrating sustainable economic development. Poverty levels have also substantially decreased, with those living on less than $3.65/day dropping from 14% in 2010 to under 4% in 2023.
The country’s GDP continued robust growth, reaching 7.1% in 2024. Although forecasted to moderate to 5.8% in 2025 due to global trade uncertainties, a rebound to 6.1% is expected in 2026. Overall, Vietnam’s sustained growth underscores its increasing integration into global markets and a favorable environment for business expansion.
Infrastructure Development and Route-To-Market
Significant investments underpin Vietnam’s modernization efforts:
- Electrical and Digital Infrastructure: Nearly 100% of the population uses electricity for lighting (up from 14% in 1993). A digital infrastructure strategy aims to ensure widespread fiber optic access by 2025, supporting high-tech industries and urban development.
- Transport Networks: The development of expressways like the North-South Expressway enhances connectivity between major cities, reducing travel times and improving logistics. Airport upgrades, including the new Long Thanh International Airport, bolster tourism and business travel. Deep-water ports such as Lach Huyen improve import-export efficiency, fostering trade growth.
- Urban Transit: Expansions of metro systems in Hanoi and Ho Chi Minh City aim to ease urban congestion while modernizing urban transportation.
These infrastructure improvements create a favourable environment for companies seeking to establish or expand operations, offering reliable logistics, transportation, and connectivity to access domestic and regional markets.
Retail Sector Dynamics
Vietnam’s retail sector is experiencing rapid growth driven by economic reforms, urbanization, and a rising middle class. Key highlights include:
- Market Growth: The retail industry is projected to grow at approximately 12.05% annually from 2024 to 2029, fuelled by domestic consumption.
- Digital Transformation: About 40% of consumers use banking apps for shopping transactions, reflecting a shift towards cashless and digitally integrated retail experiences. This trend aligns with government initiatives promoting digital payments, enhancing transparency and consumer convenience.
- Middle-Class Expansion: The middle class, constituting around 26% of the population by 2026, and an additional 23.2 million people joining this segment by 2033, present vast consumption opportunities across retail segments, including FMCG, apparel, electronics, and luxury goods.
- Rural Source of Growth: in addition to urban evolution, rural Vietnam still accounts for 60%+ of the population. It too, is seeing a rise in living standards and spending power.
The retail market’s evolution indicates increasing sophistication and openness to modern retail formats, e-commerce, and digital services.
How Frontline Research Group Can Support Market Entry and Expansion
With over 30 years of experience in market research within developing economies Frontline Research Group is well-positioned to assist companies seeking to capitalize on these opportunities.
Vietnam’s impressive economic growth, infrastructural advancements, and expanding retail sector present a compelling environment for investment and expansion. Companies aiming to enter or grow within this vibrant market can leverage Frontline Research Group’s expertise to develop data-driven strategies, mitigate risks, and seize emerging opportunities efficiently.
Key Offerings:
- Retail Census and Audits: Ongoing programs delivering reliable, up-to-date data on retail infrastructure, distribution channels, and competitive landscapes, enabling strategic decision-making.
- Market Insights: Providing detailed intelligence on market coverage, distribution systems, point-of-purchase execution, shopper behaviours, trends to help tailor product and marketing strategies.
- Advanced Tools and Methodologies: To help understand the complexities of traditional trade, urban and rural retail environments.
As Steve Johnson, Managing Director, notes, “Our ability to generate accurate data—especially in traditional trade sectors—gives companies a competitive edge in understanding and penetrating the Vietnamese retail market.”
Contact Information
For more information on what Frontline Research Group can do for you, please reach out to Steve Johnson: Tel. +230 5493 6376, email: steve@frontlineafrica.com in Mauritius or Gareth Ellis, Regional Manager: Southeast Asia on email: gareth.ellis@frontlineafrica.com
