A majority of consumers still shop in supermarkets but smaller stores are making rapid inroads.
Convenience stores and minimarts have become more popular in Vietnam and are now the fastest growing segment of the retail industry here, according to a new report from Nielsen.
It said 65 percent of Vietnamese shoppers now choose hyper or supermarkets, and 22 percent are frequent customers at convenience stores and minimarts.
As of June 2016, there were 1,500 convenience stores across the country, according to the market research firm.
"Vietnam’s retail sector has so much potential to grow,” said Vaughan Ryan, CEO of Nielsen Vietnam.
The Ministry of Industry and Trade has estimated that by 2020 Vietnam will have 1,300 hypermarkets and supermarkets and 337 trade centers.
“As in other ASEAN markets, Vietnam’s rapid urbanization and rising incomes led to a growing adoption of Western styles, which led to a boom in FMCGs (fast-moving consumer goods),” Oxford Business Group quoted Vinamilk CEO Mai Kieu Lien as saying.
In China, for every 21,000 people, there is one convenience store, while this figure is 1,800 in South Korea and a whopping 69,000 in Vietnam.
Investors are also favoring convenience stores since the return on investment is much more appealing than the traditional supermarket model.
Vietnam has been in the top 30 most attractive retail markets for eight consecutive years since 2008, according to the Global Retail Development Index (GRDI) from consulting firm A.T. Kearney.
This year, it has been ranked 11th globally and third in Southeast Asia, after Malaysia and Indonesia.