expanding middle class with rising purchasing power. The country’s median age is 32, and its population of nearly 100 million is increasingly adopting modern shopping habits, fueling demand for retail expansion. “Compared to Thailand, Indonesia, or Singapore, Vietnam’s retail market is still developing,” said Matthew Powell, director of Savills Hanoi.  “Previously, many Vietnamese consumers preferred shopping abroad, especially in Bangkok, due to the strong presence of international brands. As domestic demand rises, more global brands recognise the potential for expansion in Vietnam. With a young population and strong purchasing power, the country is becoming an attractive destination for major retail corporations. Over the period 2025–2030, we expect even stronger growth, positioning Vietnam as a key competitor among leading markets in the region.”  Vietnam remains a magnet for foreign direct investment (FDI), particularly in the retail and commercial real estate sectors. Major global brands entering or expanding in the market last year include Flying Tiger Copenhagen, Genki Sushi, Franck Muller and Victoria’s Secret.  Meanwhile, cities such as Ho Chi Minh City and Hanoi are seeing continued investment in shopping malls and mixed-use developments, providing more opportunities for international retailers. According to Savills, shopping malls continue to dominate Vietnam’s retail landscape, accounting for 63 per cent of total retail space supply. Notable upcoming projects include Hanoi, Aeon Xuan Thuy, and Thiso Mall Hanoi. In HCMC, major developments such as Marina Central Tower and Union Square are expected to further bolster the city’s retail infrastructure. Luxury retail is also gaining momentum, particularly in key shopping districts in Hanoi and HCMC. Despite limited new supply, the luxury retail segment is expected to remain resilient, with brands opting for stand-alone flagship stores over mall-based locations to create immersive shopping experiences. E-commerce is another significant driver of growth. Vietnam has one of the fastest-growing digital economies in Southeast Asia, with online retail sales expected to continue rising due to increasing internet penetration, improved logistics infrastructure, and changing consumer behaviour. Major e-commerce players such as Shopee, Lazada and Tiki are expanding their operations, further integrating online and offline shopping experiences. Challenges facing Vietnam’s retail sector According to Savills, Vietnam’s retail sector is experiencing legal and bureaucratic complexities. The restructuring of government agencies, including the planned merger of the Ministry of Finance and the Ministry of Planning and Investment, is expected to slow licensing procedures. Compliance with fire safety regulations and construction permits remains another obstacle for retailers looking to establish new locations. The workforce remains another challenge. According to ManpowerGroup, 76 per cent of employers in the retail industry struggle to find skilled labor. The high turnover rate, currently at 25 per cent, places pressure on businesses to implement better recruitment and retention strategies. Retailers are increasingly focusing on flexible work policies, salary adjustments and in-house training programs to attract and retain talent. Trends shaping the future of retail As Vietnam’s retail market evolves, several key trends are shaping the industry’s future: Technology and omnichannel integration: Retailers are investing in digital transformation to offer seamless online and offline experiences. Omnichannel retailing, incorporating mobile payments, virtual try-ons and AI-driven customer insights, is becoming the norm. Experiential retail and mixed-use developments: Shopping malls are diversifying their tenant mix, integrating entertainment, fitness and dining options to enhance foot traffic. Pop-up stores, co-working spaces, and flexible leasing models are also on the rise. Rise of athleisure and health-conscious consumers: Vietnam is following global retail trends, with sportswear and wellness brands experiencing increased demand. Consumers are prioritising active lifestyles, driving the expansion of brands such as Lululemon and Adidas. Growth of high-street retailing: Inspired by markets like Shanghai, many premium brands are moving away from malls in favour of high-street locations to enhance brand visibility and direct customer engagement. Retail expansion in secondary cities: While Hanoi and HCMC remain dominant, Tier-2 cities such as Da Nang and Hai Phong are seeing increased investment. Retailers are exploring new locations to capture growing consumer bases in emerging urban centers. According to Savills, Vietnam’s retail industry is poised for substantial growth this year. However, challenges such as regulatory hurdles, workforce shortages and geopolitical uncertainties must be navigated carefully. Further reading: Navigating change: Insights into China’s luxury market trends for 2025.