In 2014, Hanoi and Ho Chi Minh City (HCMC), the country’s two biggest cities, ranked amongst the top 10 Asian cities for retail expansion. In this edition of TaipanOracle we take a deeper look at the Modern Grocery Retail sector in Vietnam which is bubbling with activity as M&A action picks after the sector opened up completely to foreign investment in 2015.Įuromonitor estimates the size of the Modern Grocery Retail (MGR) market in Vietnam at USD 2.4bn in 2014, far outperforming its ASEAN peers having grown at an unprecedented 5-year CAGR of 21.8%. Retail giants have been pouring investment in the country to target its relatively young population of consumers – of which 70% are aged between 15 and 64 years – who promise to be a key driver of robust market growth. Vietnam, with increasing disposable incomes, rapid urbanisation and rising living standards, is one of the most dynamic emerging economies in the ASEAN region. With an estimated middle class population of 500 million people by 2020 and present modern retail penetration below 50%, ASEAN presents an attractive growth engine for modern retailers who can capitalize on scale, higher operational efficiencies and brand firepower. Retail channels are transitioning from traditional to modern formats as increasing wealth and lifestyle changes fuel the demand for branded products and services as well as for a more convenient retail environment.

Modern retail penetration is growing rapidly in ASEAN, led by urbanisation, rising incomes, a growing middle class population, increased consumer spending, improved lifestyle and evolving consumer habits.

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