Vietnam’s consumer goods market has experienced rapid growth in recent years, driven by a burgeoning middle class, increasing disposable income, and shifting consumer preferences. The country’s young and dynamic population, with a significant portion aged between 25 and 54, presents a lucrative market for a wide range of products.
The rapid urbanisation and modernization of Vietnam have led to a surge in demand for consumer goods. This has resulted in the expansion of modern retail channels, such as supermarkets, hypermarkets, and convenience stores, making products more accessible to consumers across the country. While urban areas have traditionally led consumer spending, the gap between urban and rural consumption is narrowing, indicating a growing market opportunity in rural regions.
Vietnam’s integration into the global economy has also contributed to the growth of its consumer goods market. Foreign direct investment has brought in new brands, technologies, and distribution channels, enhancing consumer choices and driving competition. As the country continues to develop, the consumer goods market is expected to remain a key growth driver for the Vietnamese economy.
Vietnam’s consumer goods market in numbers
The consumer goods market is anticipated to generate a value added of US$54.5 billion in 2024. This sector is poised for steady growth, with a projected compound annual growth rate of 3.32 percent from 2024 to 2029. On a per capita basis, the value added is estimated at US$548.1 in 2024.
The market is expected to experience a significant increase in the number of enterprises, reaching 52,850 by 2024, with a projected growth rate of 3.13 percent annually. Correspondingly, employment in the sector is anticipated to rise to 5.09 million by 2024, growing at a rate of 3.32 percent per year, according to data from Statista.
Vietnam retail sales 2024
Vietnam’s retail sector has been experiencing robust growth in recent years, driven by factors such as increasing disposable income, urbanisation, and a growing middle class.
Retails sales Vietnam, July 2024, VND/US$ billions
| July | YTD | ||||
| VND | US$ | Change | VND | US$ | |
| General goods | 405,538 | 16.18 | 0.44% | 2,808,731 | 112 |
| Food | 144,016 | 5.75 | 0.87% | 1,013,889 | 40 |
| Garments | 20,858 | 0.83 | 0.42% | 144,430 | 6 |
| Utensils, tools, and household equipment | 43,606 | 1.74 | 2.71% | 305,905 | 12 |
| Cultural and educational items | 5,420 | 0.22 | 5.41% | 35,103 | 1 |
| Vehicles (except cars, including spare parts) | 20,081 | 0.80 | 1.93% | 129,379 | 5 |
| Other | 171,557 | 7 | -0.79% | 1,180,025 | 47 |
| Accommodation and food services | 62,234 | 2.48 | 2.65% | 418,318 | 17 |
| Travel, tourism | 5,561 | 0.22 | 8.13% | 34,998 | 1 |
| Services | 54,953 | 2.19 | 3.75% | 368,628 | 15 |
| Grand total | 528,285 | 21.08 | 1.11% | 3,630,673 | 145 |
Source: Ministry of Industry and Trade
Vietnam’s Consumer Goods Businesses: Key Players
Vietnam’s consumer goods sector is a dynamic landscape shaped by both domestic and international players. Local conglomerates and emerging brands have successfully established strong market positions, while multinational corporations continue to invest in the country’s growth potential.
- Masan Group: This conglomerate dominates the consumer goods market with a diverse portfolio encompassing food, beverage, retail, and distribution. Its flagship brands, such as Vinamilk and WinMart, have solidified their positions as household names in Vietnam, capturing a significant market share.
- Vinamilk: As Vietnam’s leading dairy producer, Vinamilk has built a strong brand reputation and extensive distribution network, catering to the growing demand for dairy products among Vietnamese consumers.
- MHB: A prominent player in the food processing industry, MHB offers a wide range of products, including instant noodles, biscuits, and confectionery, catering to various consumer segments.
- Acecook Vietnam: A subsidiary of the Japanese Acecook Group, this company has established a strong presence in the instant noodle market, leveraging its parent company’s expertise.
- Unilever: A global consumer goods giant, Unilever offers a diverse product portfolio, including personal care, home care, and food, catering to various consumer segments and income levels.
- Nestle: As a leader in the infant nutrition and dairy market, Nestle has successfully captured a significant share of the Vietnamese market through its range of products.
- P&G: Focusing on personal care and household products, P&G has established a strong brand presence through its innovative products and effective marketing strategies.
- Coca-Cola and PepsiCo: These global beverage giants have dominated the carbonated drinks market in Vietnam, offering a wide range of products to cater to different consumer preferences.
These companies, among others, have contributed significantly to the growth and development of Vietnam’s consumer goods sector. Their competition has driven innovation, improved product quality, and expanded consumer choices, benefiting the Vietnamese market as a whole.
Consumer Goods Distribution in Vietnam
Vietnam’s distribution landscape is undergoing rapid transformation, influenced by factors such as urbanisation, rising incomes, and changing consumer behaviour. Traditional channels, while still prevalent, are gradually giving way to modern retail formats.
- Wet markets: These remain essential for fresh produce and daily essentials, particularly in rural areas, but are facing increasing competition from modern retailers.
- Small grocery stores: Widespread across the country, these stores offer convenience for local communities but often lack product variety and modern amenities.
- General trade: This channel, encompassing wholesalers and distributors, plays a crucial role in connecting manufacturers with retailers, though its importance is evolving with the rise of organised retail.
- Supermarkets and hypermarkets: Growing rapidly in urban areas, these modern retail formats offer a wide range of products, standardised shopping experiences, and private label brands.
- Convenience stores: Catering to on-the-go consumers, convenience stores are expanding their presence, especially in urban areas, offering a limited but carefully curated assortment of products.
- E-commerce: Rapidly gaining traction, e-commerce platforms are disrupting traditional retail by offering convenience, product variety, and competitive pricing.
Understanding the distribution landscape is crucial for businesses to effectively reach their target consumers and optimise their supply chain operations.
What’s next?
Vietnam’s consumer goods market is experiencing robust growth, fueled by a burgeoning middle class, rising disposable incomes, and rapid urbanisation. The market is characterised by a dynamic interplay of local and international players, with both domestic and foreign companies vying for market share.
While the market offers significant opportunities, businesses must navigate challenges such as intense competition, evolving consumer preferences, and infrastructure limitations. To succeed, companies must prioritise innovation, invest in technology, and develop a deep understanding of the Vietnamese consumer. By adapting to the changing landscape and capitalising on emerging trends, businesses can position themselves for long-term success in this promising market.
With this in mind, to keep abreast of what’s happening in Vietnam’s consumer goods industry, foreign consumer goods producing professionals should make sure to subscribe to the-shiv.