What: Robust economic performance and urbanisation are driving significant retail development and foreign brand entry in Vietnam.

Why it is important: The country’s growth trajectory is reshaping regional retail competition and setting new benchmarks for market entry strategies.

Vietnam’s retail sector is undergoing a remarkable transformation, propelled by the country’s strong economic growth and rapid urbanisation. As incomes rise and the middle class expands, demand for modern retail formats and international brands has surged, creating a vibrant and competitive marketplace. Foreign retailers are increasingly drawn to Vietnam, seeking to capitalise on its dynamic consumer base and favorable growth prospects, yet the market’s complexity demands careful adaptation. While opportunities abound, recent high-profile exits and strategic pivots by major players highlight the operational risks and regulatory challenges inherent in this fast-evolving environment. The ongoing expansion of e-commerce and digital platforms further accelerates change, requiring both local and international retailers to innovate and tailor their approaches to Vietnamese consumers. As Vietnam outpaces its regional peers, its retail sector is setting new standards for growth, competition, and market entry, underscoring the importance of agility and local insight for sustained success.

IADS Notes: In March 2025, Inside Retail highlighted Vietnam’s retail market growth to $350 billion, driven by a young, urbanising population and expanding middle class, while McKinsey’s review confirmed the country’s regional leadership in economic and retail growth. Central Retail’s $190 million loss and exit from Nguyen Kim Electronics in January 2026, along with Lotte’s strategic pivot in September 2025, illustrate both the opportunities and challenges faced by retailers navigating Vietnam’s dynamic and complex retail landscape.

Vietnam’s economy grew by more than 8% in 2025, government says