Vietnam's opportunity for retailers

According to the consumer survey done by AC Nielsen Vietnam in November 2008, Vietnamese consumers prefer to shop in modern retail centres than traditional markets. Another survey conducted by Saigon Marketing Newspaper in 2008 also reveals that around 50% of the consumers in Ho Chi Minh City are purchasing goods in supermarkets while only 15% buy products in traditional markets. The reason is that modern retail centres are becoming more convenient since they are opened for longer hours, have more diversified products, hygienic space and fixed pricing.

In addition, Vietnam has strong fundamentals. In particular, the dominance of youth in Vietnam, an important driver of economic growth, as well as the retail market. According to the General Statistics Office of Vietnam Census 2009 Report, about 66% of Vietnam’s population is between 15 and 59 years of age. This is its largest spending group and it is expected to fuel the retail market growth.
The rate of urbanisation provides an engine for the retail market. In 2009, 29.6% of the population in Vietnam lived in cities. This works out to close to one million of rural-urban migrants per year. The high rate of urbanisation implies strong long-term demand for all property types including retail.
The number of mid and high income people has also been growing rapidly. As at end December 2009, about 17% of Vietnam’s population makes US$250 to US$435 per month and higher (Savills Retail Market Report 4Q09). The number of mid and high income people has been increasing quickly and it is expected to reach 25% in the next couple of years.