Vietnam Supermarket Chain Market Outlook to 2030

Vietnam Supermarket Chain Market Overview

The Vietnam supermarket chain market is valued at USD 246 billion. This market is driven by the rapid expansion of urban centers and increasing disposable incomes among the middle class, especially in key metropolitan areas. Supermarkets are becoming the preferred shopping destination for convenience and accessibility, further encouraged by government support for modern trade infrastructure and foreign investment in retail sectors. Vietnams growing retail sector has seen a significant shift from traditional wet markets to modern supermarkets and hypermarkets due to these factors.

Dominant cities such as Hanoi and Ho Chi Minh City play a crucial role in this market. These cities are characterized by higher urbanization rates, better infrastructure, and the presence of an affluent consumer base that favors modern retail formats. Moreover, these cities attract foreign retailers due to the higher spending power of their population and a robust demand for imported products, which is limited in other parts of the country.Vietnams trade and retail sector is heavily regulated, with stringent licensing requirements for both domestic and foreign retailers. According to the Ministry of Industry and Trade, retailers must obtain various permits, including those for food safety and product quality, before establishing new stores. In 2023, the government simplified these procedures as part of its efforts to attract foreign investments, reducing the processing time for retail licenses from 90 to 45 days. However, navigating these regulations remains a challenge for smaller retailers and foreign companies looking to enter the market.

Vietnam Supermarket Chain Market Segmentation

Vietnams supermarket chain market is segmented by store format and by product category.

• By Store Format: The market is segmented by store format into hypermarkets, supermarkets, convenience stores, and online supermarkets. Recently, hypermarkets have seen a dominant market share within this segmentation due to their extensive product variety and the ability to offer competitive pricing through economies of scale. Key brands like Big C and MM Mega Market have built a strong presence in this segment, leveraging large retail spaces and bulk purchasing options for consumers. Consumers are drawn to hypermarkets due to their ability to meet the needs of bulk buyers and provide a wide selection of products under one roof, often accompanied by promotional pricing.
• By Product Category: The market is also segmented by product category into fresh food, packaged food, personal care & household products, and beverages & alcohol. Fresh food, particularly in categories like fruits, vegetables, and meats, holds a dominant market share due to the rising consumer preference for fresh and locally sourced products. Consumers in Vietnam prioritize freshness in their grocery shopping, and supermarkets have developed supply chains and partnerships with local farmers to ensure the timely availability of fresh produce. This consumer preference for health and freshness aligns with the increasing trend towards healthier eating habits in urban areas.

Vietnam Supermarket Chain Market Competitive Landscape

The Vietnam supermarket chain market is dominated by several local and international players. The market has become highly competitive as global brands enter the Vietnamese retail sector and local chains expand their reach. Supermarket chains like Saigon Co.op and VinMart have maintained their dominance by expanding their footprint across urban and suburban areas, leveraging technology in operations, and investing in omnichannel retail strategies.

Vietnam Supermarket Chain Market Analysis

Growth Drivers

• Urbanization and Changing Consumer Behavior: Urbanization in Vietnam has increased significantly, with approximately 38 million people living in urban areas as of 2024, a number that has grown steadily since 2022. This shift in population has directly influenced consumer behavior, as urban consumers demand more convenience, diverse products, and modern retail formats. Supermarkets have become central to this transformation, offering tailored shopping experiences that cater to time-constrained city dwellers. The rapid urban expansion in cities like Ho Chi Minh and Hanoi has led to greater demand for organized retail outlets. These trends are supported by data from Vietnam's Ministry of Planning and Investment, highlighting increased urban infrastructure development.
• Rising Middle-Class Income: Vietnams middle-class population is projected to exceed 25 million by 2025, fueled by economic growth, job creation, and rising incomes in both urban and rural areas. This income growth has been a significant driver for the supermarket chain market, as middle-class consumers have more disposable income to spend on premium products, imported goods, and convenience. As of 2024, the average household income in urban Vietnam is estimated to be over 160 million VND per year, according to government statistics. This financial shift supports greater spending in supermarkets and retail chains.
• Expansion of E-commerce Integration: Vietnam's e-commerce market, which was valued at over $23 billion in 2023, is playing a pivotal role in supermarket chains' growth as they increasingly integrate online platforms with their brick-and-mortar stores. Supermarkets now offer hybrid models with home delivery, click-and-collect services, and mobile apps, significantly enhancing consumer convenience. Companies like VinMart and Co.opmart have invested in e-commerce capabilities to cater to the tech-savvy younger demographic. The General Statistics Office of Vietnam reports a surge in online shopping behavior, with 57% of the population purchasing groceries online in 2024.

Market Challenges

• Infrastructure Gaps in Rural Areas: Despite rapid urbanization, Vietnams rural areas still face significant infrastructure challenges that limit supermarket expansion. Many regions lack reliable transportation networks and power supply systems, making it difficult for retailers to build and maintain modern supermarkets. The Ministry of Transport in Vietnam has reported that only 65% of rural roads are paved, impacting the distribution logistics of supermarket chains. Additionally, limited access to cold storage facilities in these areas hampers the distribution of perishable goods, increasing operational challenges for supermarket chains targeting rural consumers.
• Intense Competition from Local Retailers: The rise of local grocery stores and traditional markets remains a significant challenge for supermarket chains in Vietnam. Local retailers, known as "wet markets," have deep roots in both urban and rural communities, accounting for about 65% of total grocery sales in the country, as of 2023, according to government data. These markets offer low-cost products and cater to traditional shopping habits, making it challenging for supermarket chains to capture market share. The Vietnam Chamber of Commerce and Industry has identified this competition as a key obstacle to modern retail growth, especially in rural areas where price sensitivity is high.

Vietnam Supermarket Chain Market Future Outlook

Over the next five years, the Vietnam supermarket chain market is expected to experience significant growth driven by continuous urbanization, increasing consumer purchasing power, and the expansion of digital retail channels. The rise of e-commerce and online grocery shopping, combined with the ongoing investments in improving logistics and supply chain infrastructure, will be key drivers for this growth. Supermarkets are likely to adopt a more omnichannel approach to meet the demands of tech-savvy, convenience-driven consumers, while expanding into rural areas to tap into the growing demand for modern retail formats.

Market Opportunities

• Growth in Health-Conscious and Organic Product Demand: The demand for organic and health-conscious products has grown in Vietnam, with the countrys organic food market expanding by 30% between 2022 and 2023. Supermarket chains are capitalizing on this trend by introducing organic sections and partnering with local organic farms. In 2024, more than 2,000 supermarkets in Vietnam offered organic product lines, compared to just 1,200 in 2022. This shift is partly driven by increasing consumer awareness of food safety and health, particularly in urban areas, where lifestyle diseases such as diabetes and hypertension are on the rise, according to the Ministry of Health.
• Expansion into Second and Third-Tier Cities: Vietnams second and third-tier cities, such as Da Nang, Can Tho, and Hai Phong, are emerging as significant opportunities for supermarket chains due to their growing populations and increasing consumer demand. The Ministry of Construction projects that these cities will experience population growth rates of over 4% annually from 2023 to 2025. This urban expansion, combined with rising household incomes in these areas, presents a lucrative opportunity for supermarket chains to expand beyond Ho Chi Minh City and Hanoi. As of 2024, several major supermarket chains have announced plans to open a combined 200 new stores in these regions.