According to Euromonitor, retail sales in the packaged food market in Vietnam had been estimated to reach US$14.2 billion in 2020. That represents a period growth rate of 40.2% or US$4 billion since 2016. That is the highest growth rate of
all the assessed markets. The forecast for growth in this market is also promising. By the year 2025, the retail sales in the packaged food market in Vietnam is expected to reach over US$23.8 billion, a period growth rate of 51.7% or US$8.1
billion. That rate of growth is also the highest in the market assessments. High growth products in the forecast include:
- Pet Food
- Ready Meals
- Breakfast cereals
- Sweet Biscuits, Snack Bars and Fruit Snacks
- Dairy (Ex. Cheese)
- Processed Meat and Seafood
Post reports that Vietnam’s food retail sales reached about US$55 billion in 2020; an increase of 10% compared to previous year, and accounted for 31.7% of total retail sales of goods in 2020. However, despite this expansion, three grocery
store chains exited the Vietnam market, including Vingroup, Vietnam’s largest grocery retailer, due to intense competition. In 2020, the COVID-19 outbreak hit the retail food sector in the short term, but has offered expanded opportunities
for e-commerce to grow.
Post reports that COVID-19 has provided market opportunities for e-commerce in Vietnam. According to Vietnam’s General Statistics Office (GSO), 68.5 million, or 70%, of Vietnam’s population has internet access and about 43.7 million
Vietnamese use smartphones. According to the Vietnam e-Commerce Association, e-commerce was already experiencing significant annual growth of 30% over the past two years and estimates that the market could reach US$13 billion by the end of 2020.
According to Euromonitor, in 2021, the supermarkets channel is expected to perform better than in 2020, in regard to current value sales. The Vietnamese government has been able to control the spread of COVID-19 effectively and provide various
programs to support residents and companies to overcome financial difficulties. As such, the Vietnamese economy is expected to recover quickly, which will see consumers spend more money in 2021, which will benefit supermarkets, although
the average unit price in the channel is projected to decline again, albeit it by a much smaller amount than in 2020.
Mini supermarkets are projected to grow in number over the forecast period. These formats – defined as having retail sales area of less than 500 sq m – are becoming increasingly popular in the country. VinMart+ by Masan Group
and Bach Hoa Xanh by Mobile World JSC are two of the most popular brands with mini supermarkets. Having this more compact size, which can be just slightly bigger than that of a common convenience store, allows supermarket players to penetrate
easily crowded residential areas. These mini supermarkets suit the lifestyle of busy urban consumers, who have little free time and prefer to go to a shop near to their houses.
Euromonitor reports that domestic players dominate the supermarkets channel, thanks to their long-standing presence in the market and intimate knowledge of local market conditions. In addition, local players, such as Saigon Union of Trading
Cooperatives, benefit from strong government support for the expansion of modern grocery retailing channels in both urban and rural areas. Saigon Union remained the largest player in supermarkets at the end of the review period (2020). Its
supermarket brand Saigon Co.op was one of the first modern grocery retailers in Vietnam. Over its long-established presence in the market, the brand has built considerable consumer-awareness and trust. Moreover, it has continually evolved
to remain relevant to market conditions and demand trends. In the final two years of the review period, the company made significant efforts to develop its private label offer to build consumer loyalty and enhance its competitive standing.
According to Euromonitor, international players dominate the convenience stores channel in Vietnam, with four of the top five brands being owned by foreign multinationals in 2020. The convenience stores format is still relatively novel for
local players, while international brands benefit from long-established activity in the channel. With greater financial capability, international players also find it easier to adapt to market trends.
For example, realizing the strong growth of convenience store fast food, the owners of Family Mart, Circle K and Ministop have collaborated with local manufacturers to have local snacks delivered daily to their stores and have set up separate
areas in their stores for dining in. This has supported Family Co Ltd.’s popularity amongst younger consumers. The company’s Family Mart brand has become famous for its wide range of hot and ready to eat food, and its
relaxing sitting areas for youths to socialize in, though mandatory social distancing in 2020 made dine-in less viable.
Best Product Prospects
Post reports that U.S. products that are already present in the Vietnamese market with good sales potential include fresh produce, meat and meat products, poultry, seafood, milk and dairy products and condiments and sauces.