Vietnam’s Retail and Commercial Real Estate Market in 2025

Vietnam’s retail and commercial real estate market is on a strong growth trajectory, driven by government initiatives, evolving consumer behavior, and e-commerce expansion. As major players adapt to trends, the sector is set for sustained expansion in 2025.

Vietnam’s retail market witnessed a robust recovery in 2024, with official data reflecting substantial growth as the Vietnamese government reinforced its market development initiatives and consumer stimulus.

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According to the General Statistics Office (GSO), Vietnam’s total retail sales of consumer goods and services in the fourth quarter of 2024 increased by 9.3 percent over the same period last year. Vietnam’s total retail sales of consumer goods and services reached VND 6.4 quadrillion (approx. US$250 billion) in 2024, a 9 percent year-on-year increase.

Meanwhile, retail sales generated US$193.4 billion, up 8.3 percent compared to 2023. Compared to 2019, the pre-Covid period, the total figure increased by 29.4 percent in 2024, including a 31.5 percent rise in retail sales.

Booming e-commerce sector

Vietnam’s e-commerce market surpassed US$25 billion in 2024, marking a 20 percent year-on-year increase, as reported by the Ministry of Industry and Trade (MoIT). Released on December 23, this report exceeds the US$22-billion-forecast that Google, Temasek, and Bain & Company provided in their ‘e-Conomy SEA 2024’ report. Within the region, Vietnam’s e-commerce sector ranks third, behind Indonesia (US$65 billion) and Thailand (US$26 billion).

Importantly, e-commerce has emerged as a vital distribution channel, strengthening the development of supply chains both domestically and internationally. It supports the sale of goods and agricultural products from farmers and businesses, particularly during harvest times. Many companies have achieved significant growth by leveraging e-commerce platforms, while cross-border retail sales have surged, attracting small and medium-sized enterprises. E-commerce constituted over 60 percent of Vietnam’s digital economy in 2024, being one of two primary growth engines alongside online tourism. Other notable allied industries include ride-hailing, food delivery, and online advertising.

In fact, Vietnam’s e-commerce growth rate ranks among the top 10 globally, serving as a catalyst for the country’s economic advancement and driving digital transformation for businesses.

A recent report by Metric reveals that the top five e-commerce platforms in Vietnam, namely, Shopee, Lazada, TikTok Shop, Tiki, and Sendo, generated VND 318.9 trillion (approx. US$12.67 billion) in 2024, a 37.36 percent increase from 2023. Total consumption volume also rose to over 3.4 million products, up 50.76 percent, indicating strong purchasing power.

Growth Drivers for Vietnam’s Retail Sector

Various factors contributed to Vietnam’s impressive performance in its retail sector last year, many of which are expected to spill over into 2025.

Domestic market recovery

Vietnam’s domestic consumption has shown significant recovery. Specifically, consumer goods imports in 2024 rose by 20.6 percent compared to 2023, indicating a resurgence in domestic demand.

Additionally, the number of tourists increased in 2024, with international visitors to Vietnam estimated at over 17.5 million, marking a 39.5 percent increase from 2023. This influx of tourists is positively impacting the production and business performance of several domestic service sectors.

Government policies

The Vietnamese government introduced a wide range of incentives and policies for production support and promotion, consumption stimulation, and domestic market development. These incentives played a crucial role in mitigating troubles for production and business activities, especially in manufacturing industries.

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The most prominent action taken by the state was to extend the reduction of the value-added tax (VAT) from 10 percent to 8 percent on various essential goods for the entire year. This VAT cut has significantly eased production costs, allowing businesses to boost their profits and encourage consumption.

On November 30, 2024, Vietnam’s National Assembly determined to continue to reduce VAT on specific goods and services to support the Socio-Economic Recovery and Development Program.

Accordingly, goods and services subject to the 10 percent VAT rate will continue to enjoy the 2 percent reduction until the end of June 2025. The government expects this measure to continue its positive influence on the domestic consumer market in the first half of 2025.

Recent consumption patterns

For 2025, analysts predict that Vietnam’s retail sector will maintain its growth trajectory from the previous year, driven by an upturn in consumer spending and online shopping. However, inflation concerns will continue to shape Vietnamese consumer behavior and spending priorities.

Consumers in Vietnam are spending more consciously

Market analysts have observed a growing value-conscious trend among consumers, highlighting their willingness to indulge in select essential items while adopting a more frugal approach toward others. PwC’s Voice of the Consumer Survey 2024 reveals that Vietnamese consumers intend to boost their spending on essential goods in 2025. In contrast, the outlook for luxury and recreational items appears bleak, as spending is expected to decline.

This shift in consumer behavior can be attributed to an increased sensitivity to inflation and the values associated with goods. Among the 515 Vietnamese surveyed for the PwC report, rising costs of food, energy, housing, and other necessities were identified as the primary concern for 63 percent of them. Meanwhile, Vietnamese consumers are increasingly prioritizing sustainability in purchasing decisions, favoring healthier, organic, and locally sourced options. According to research firm Kadence’s most recent study, 46 percent of respondents in Vietnam showed a clear preference for products or services based on their environmental credentials.

Preference for variability

According to Kadence, Vietnamese consumers demonstrate the least brand loyalty in the Asia-Pacific region, as most prefer having more options rather than committing to one brand. This trait compels brands to adopt more flexible and creative strategies to earn consumers’ trust and affection. These strategies typically focus on offering product variability, supported by excellent customer service and a strong emotional connection.

The rise of omni-channel shopping

It has become more evident that consumers nowadays prefer to reap merits from more than one method of shopping, as they want to enjoy both the in-store product experience and online shopping convenience, leading to the birth of “omni-channel shopping”.

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As per the PwC report, online shopping has taken the lead in Vietnam, with 67 percent of transactions conducted via mobile devices. Social media plays a crucial role in influencing purchasing decisions, as 71 percent of consumers use these platforms to discover and buy products, which is significantly higher than the regional average of 56 percent. Meanwhile, in-store shopping continues to be relevant, representing 63 percent of overall purchases.

The implementation of this strategy is growing rapidly in Vietnam. In a media interview last December, Tran Thi Phuong Lan, Vice President of the Association of Vietnam Retailers (AVR), disclosed that approximately 79.2 percent of retail businesses have embraced omni-channel sales models. The leader of AVR commended this model for its ability to yield higher profits, noting that omni-channel shoppers generally spend more compared to those engaging through a sole channel.

These consumers are purposeful in their choices, recognize the appropriate times to utilize specific channels, and prefer retailers that ensure a smooth and convenient shopping experience across different platforms.

Rental market for offline retailers

Along with the rise of e-commerce and online shopping, physical stores still play a crucial role in the success of retailers, providing an optimal consumer experience in the evolving omni-channel shopping model. Identifying the right locations to establish brick-and-mortar stores is fundamental to achieving success in offline retail. Against this backdrop, Vietnam’s rental market experienced remarkable growth in 2024 as retailers competed for the best store spaces.

State of Vietnam’s commercial real estate market

In 2024, the retail real estate markets in Vietnam’s two largest cities, the capital Hanoi and the commercial center Ho Chi Minh City, saw significant positive changes, creating strong potential for businesses in 2025. According to consultancy firm CBRE, the retail real estate market in these cities saw substantial rental growth in the central business district (CBD) spaces, driven by robust demand in shopping malls.

This trend was further fueled by a surge in expansion interest from both local and international retailers, particularly Chinese brands.

Hanoi

New projects: Aeon Mall Xuan Thuy and Hanoi Centre

In 2024, rental prices continued to rise. Hanoi experienced an increase in rental rates within the CBDs, where the average monthly rate hit US$172.7 per square meter (sqm), marking a year-on-year increase of 16.2 percent. Simultaneously, vacancy rates in the CBDs remained low at just 1.7 percent. In contrast, non-CBD areas showed an average vacancy rate of 10.5 percent, with rental prices rising by 10.1 percent compared to the previous year.

HCMC

New projects: Vincom Mega Mall Grand Park, Parc Mall, and Central Premium Mall.

The HCMC retail market saw the addition of 117,000 sqm of new net leasable space from four shopping malls that opened in 2024. The city exhibited the highest net absorption recorded since 2017 in HCMC, with 132,000 sqm and a drop in average vacancy from 9 percent to 7 percent.

Growing interest from foreign brands, especially Chinese

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Experts have noted a rising trend of foreign retailers, particularly from China, expanding into Vietnam across various sectors, including food and beverage, fashion, and luxury goods. The influx of international luxury brands, in particular, is shaping a significant market trend driven by multiple factors, resulting in positive outcomes for the retail landscape. In the first half of 2024, luxury brands made notable moves, such as Hermès Paris launching a pop-up store at Lotte Mall West Lake in Hanoi’s Tay Ho district. Ho Chi Minh City also witnessed major openings, including Piaget’s first store in Vietnam, Cartier’s flagship at Union Square, and Jacob & Co’s debut outlet on Dong Khoi Street in District 1.

Moreover, CBRE highlighted the growing presence of Chinese brands in Vietnam’s retail market, with chains like Pop Mart, Mixue, Chagee, and KKV expanding into the country. This surge is part of a larger trend of Chinese companies seeking new international markets, with Vietnam offering fresh opportunities amid the current retail slowdown in China and the broader Asia-Pacific region.

Conclusion

Vietnam’s retail and commercial real estate market is on an upward trajectory, bolstered by significant growth and modernization in 2024. In 2025, the combination of robust domestic consumption, favorable government policies, and the expansion of both local and international retailers positions the market for continued success. The dynamic interplay between physical stores and online shopping will create an evolving retail landscape, offering exciting opportunities for both businesses and consumers.

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