Q3 2022
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Vietnam
Consumer & R
Retail
etail R
Report
eport
Includes 5-year forecasts to 2026
Vietnam Consumer & Retail Report | Q3 2022
Contents
Key View............................................................................................................................................................................................ 4
Consumer Outlook ...................................................................................................................................................................................................................... 4
SWOT ................................................................................................................................................................................................10
Consumer & Retail SWOT ........................................................................................................................................................................................................10
Industry Forecast.........................................................................................................................................................................11
Consumer Spending .................................................................................................................................................................................................................11
Household Characteristics .....................................................................................................................................................................................................22
Demographic Forecast.............................................................................................................................................................................................................26
Market Overview..........................................................................................................................................................................33
Retail Trends .................................................................................................................................................................................................................................33
Consumer & Retail Glossary.....................................................................................................................................................40
Consumer & Retail Methodology............................................................................................................................................44
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THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Key View
Consumer Outlook
Key View
• Consumer spending in Vietnam will post solid growth over 2022, after two years of Covid-related economic slowdowns.
• Nominal retail sales figures have recovered beyond pre-Covid levels. While growth is on a strong upwards trajectory, we do note
that higher inflation poses a risk to consumer spending over 2022.
Outlook For 2022
Consumer spending in Vietnam will post solid growth over 2022, with real household spending projected to grow by 5.7% y-o-y.
This is a notable improvement from the 1.8% y-o-y growth estimated for 2021, when the direct impacts from Covid-19 continued to
weigh on domestic demand. The uptick in consumer spending growth over 2022 will come as the wider Vietnamese economy
recovers, facilitated by the country’s ongoing vaccination drive and improved disease-resistance among the population, making
disruptive lockdowns less likely in 2022. At VND2,805trn (USD121.3bn) over 2022, real household spending will be 8.3% higher than
the VND2,591trn (USD112.1bn) posted in 2019, the pre-Covid environment.
Vietnamese Household Spending Will Return To Conventional Patterns In 2022
Vietnam - Total Household Spending, Real % y-o-y (2018-2026)
e/f = Fitch Solutions estimate/forecast. Source: National sources, Fitch Solutions
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
High-Frequency Data: Retail Sales Report Strong Growth, Leaves Low Base Effects Behind
Latest data in nominal retail sales figures indicate a continuation of the retail sales recovery trajectory reported earlier. Over the first
four months of 2022, Vietnamese retail sales posted an average of 6.5% y-o-y growth between January 2022 and April 2022, with
April's growth recorded at 12.1% y-o-y. Over January 2022 to April 2022, growth continues to be clear of low base effects since the
beginning of the Covid-19 pandemic suggesting that retail sales are posting real growth. We believe as Vietnam continues its
roadmap towards fully reopening international tourism and the momentum of economic activity picks ups, this trend will continue,
supporting the wider recovery in household spending.
Retail Sales Growth Show First Positive Signs
Vietnam - Retail Sales, % chg y-o-y (2020-2022)
Source: General Statistics Office Of Vietnam, Fitch Solutions
Insights Into Consumer Spending
Our forecast for an acceleration in real consumer spending growth in Vietnam in 2022 is in line with our Country Risk team's
forecast that the domestic economy will grow by a real rate of 6.8% y-o-y, an increase from the modest growth of 2.6% y-o-y in
2021. The main driver of economic growth will be the rebound in consumer spending, as well as growth in net exports. The
country's unemployment rate will be stable over the year, at 2.3% of the labour force, while inflation is expected to edge higher,
reaching an average of 3.7% over the year.
VIETNAM'S ECONOMIC OVERVIEW
2022f
2023f
Real GDP (% chg y-o-y)
6.8
6.7
Unemployment (% of total labour force)
2.3
2.2
Consumer price inflation (% y-o-y, ave)
3.7
3.5
921.0
593.7
Total tourist arrivals, '000 % y-o-y
f = Fitch Solutions forecast. Source: National sources, Fitch Solutions
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Inflation Outlook
Since the start of 2021, inflationary pressures have been rising in many countries globally, as base effects, higher commodity prices
and supply-chain challenges create localised shortages. The Ukraine-Russia conflict has also significantly impacted the global
supply prices of key commodities, such as oil and gas, fertiliser, wheat, corn and barley. The commodity price increases are already
feeding through into higher consumer prices and will continue to over the year. We believe that rising consumer price inflation is a
key risk to consumer spending over 2022, as it has the potential to erode purchasing power and shift spending away from
discretionary spending.
In Vietnam, inflation has been ticking upwards, reaching an eight-month high of 2.6% y-o-y in April 2022 (latest available data). We
believe this rate will remain elevated over 2022, and we forecast it to end the year at 3.7% y-o-y. Our Country Risk team does foresee
the State Bank of Vietnam hiking rates over 2022, to 4.25% by the end of the year. Indonesia is Vietnam's second largest import
market for palm oil. Since 2021, Vietnam has also increased its imports of wheat from India. As such, we note that the recent palm
oil and wheat export bans by Indonesia and India respectively will have an impact on food inflation and will pose a risk to our outlook
on the consumer spending in Vietnam.
Inflation To Remain Elevated Over 2022
Vietnam - Consumer Inflation, % y-o-y (2018-2022)
Source: General Statistics Office Of Vietnam, Fitch Solutions
Household Debt Outlook
Vietnam has experienced a household credit boom over the past few years. We highlight that rapid unwinding of this could pose a
significant risk to domestic demand. Consumer loans accounted for roughly 50% of the workforce’s income in 2020, a relatively
high figure for an emerging market like Vietnam. Of the 50%, over half was in the form of borrowing by small household businesses
with a further 25% in housing-related loans (mostly mortgages). Although growth in household debt moderated significantly in
2020 with a 1% increase (compared to an average 3% since 2013), the level remained elevated. As repo rates and interest rates
begin to rise, so too will debt servicing costs. This would mean households will increasingly have to allocate disposable income
towards debt financing, placing downward pressure on consumer spending going forward.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Government Support
On April 2020, the Vietnamese government announced that it would be rolling out financial relief measures to aid citizens who have
been affected by the pandemic. A monthly payment of VND1.8mn (USD70) would be paid to employees whom employers are
unable to pay salaries due to pandemic-related reasons. Employees whom had their employment completely terminated would
receive VND1mn (USD43) per month for up to a period of three months. Companies who have paid employees at least 50% of their
salaries in advance of work suspension will also be entitled to collateral-free, zero-interest loans by the government, aimed to
encourage businesses to continue providing employees with their salaries and reducing the government's burden. On January 12
2022, the Vietnamese authorities again approved a stimulus package of over VND347trn (USD15.3bn) as part of a wider initiative to
aid the recovery of the battered economy. The focus was on businesses most directly affected by the pandemic, such as by delaying
payment of loans as well as increasing infrastructure spending with the ultimate aim of creating jobs which would spur consumer
spending and the wider recovery of the economy.
Wider Economic Challenges
As economies began to reopen in 2021, consumers started demanding products that they had little access to over the previous
year. However, manufacturers started facing several problems. Supply chain issues and bottlenecks resulted in consumer goods
shortages, feeding through into supply-side inflation. Fitch Solutions believes the global semiconductor shortage will continue into
2022, putting pressure on the supply of several consumer goods. New, more transmissible variants can cause the closure of factory
production or manufacturing across the world. This becomes a problem when one aspect of the supply chain opens up and
another one is impacted by restrictions, especially in the East Asia region. Similarly, manufacturers are facing shortages of key
components and higher raw materials costs. Finally, the Ukraine-Russia conflict is placing significant supply pressures on key
commodities, pushing up final market prices across a spectrum of consumer categories. The graphic below highlights some of
these risks to outlook.
Global Risk To Consumer Outlook
Risks To Outlook
Source: Fitch Solutions
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Covid-19 Risk To Outlook
Our forecasts account for risks that are highly likely to play out in 2022, including the easing of government support. Over H122, the
risks surrounding Covid-19 have moderated, as population immunity (from vaccines and prior infection) combined with less severe
variants have meant that death rates have remain low through recent infection waves. This has seen many markets globally adopt a
more 'live with Covid-19' approach to movement and operating restrictions. However, this is not to say that the rapid spread of the
virus cannot still upend global supply chains, as was seen in China over February and March 2022. The chart below highlights the
risks that Covid-19 will continue to have for the consumer outlook in Vietnam over the short term.
Vietnam Still Faces Several Covid-19 Risks
Covid-19 Risks To Outlook
Source: Fitch Solutions
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
In order to track our analysis of consumer spending in Vietnam during the Covid-19 outbreak and our 2021 recovery projections
please see:
2022 Outlook
• Vietnam 2022 Consumer Outlook: High Frequency Data Points To Positive Outlook
Covid-19 2021 Impact Assessment
•
•
•
•
Vietnam Consumer Outlook: Robust Consumer Spending In 2021, But Delta Variant May Hinder Recovery
Consumer Outlook 2021: Vietnam's Consumer Spending Back On Track, But Risks Remain
Vietnam's Consumer Recovery Getting Under Way In 2021
2021 Recovery Assessment: Vietnamese Consumer Emerging From Covid-19
Covid-19 Outlook
• Vietnam Consumer Outlook: 2020 Covid-19 Impact Assessment And 2021 Recovery Scenario
• Vietnam In Covid-19 Lockdown: Impact on Consumer Sector
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
SWOT
Consumer & Retail SWOT
SWOT Analysis
Strengths
• A large, youthful and still-growing population offers high growth opportunities for retailers.
• A very open retail market, with a good business and investment environment will continue to attract foreign
retailers.
• One of the fastest-growing consumer markets in emerging Asia. Western-style retail is already well-established in
large cities, reflecting that the necessary infrastructure and logistics are already in place in large cities.
Weaknesses
• Price-conscious consumer base with strong saving inclinations will mean that essential spending will dominate
spending. A large percentage of the population falls into the low-income segment, reducing the spending on
luxury and non-essential items.
• Most Vietnamese people still live in rural areas, making it hard to reach for modern retail because of the lack of
infrastructure and transportation.
• High rental prices for retailers operating in key urban hubs.
Opportunities
• Demand for luxury brands have increased post pandemic and rising income levels make it a strong market for
luxury retailers.
• The Covid-19 pandemic has resulted in increased demand for e-commerce services which presents consumer
facing companies with new channels of reach consumers over the medium term.
• Signing of the Comprehensive and Progressive Agreement for Trans-Pacific trade agreement will also help to boost
imports of a large range of consumer goods.
• Rising household incomes and a growing middle class will boost disposable income levels, increasing opportunities
for retailers.
• Rising consumer interest in 'Western-format' shopping and entertainment complexes. Improvements to
infrastructure should make distribution easier for retailers.
• High mobile and internet penetration rates offer attractive opportunities in the rapidly growing e-commerce
market in Vietnam, as competition among e-commerce giants builds momentum.
• Cheap labour costs are pushing manufacturers to move to Vietnam from China, seeking lower production costs.
Threats
• Corruption and bureaucratic red tape remains a hurdle for companies entering the market.
• Over the long term, the retail sector in major cities will become saturated and there are few alternative
communities that can currently support modern retail development.
• Increasing price-consciousness could result in a decline in the demand for luxury foreign retail goods.
• While there has been wage growth, it is still low when compared with its regional peers, which will restrict nonessential spending.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Industry Forecast
Consumer Spending
Key View: Household spending in Vietnam will only begin its recovery in 2022, after two years of economic uncertainty for
households, as well as limitations to both essential and non-essential retail. Inflation will continue to rise steadily but will be
outpaced by the growth in disposable incomes, leading to real growth in incomes. The recovery in spending will be lead by the
return of purchasing triggers associated with the return to normality (going back to work or socialising more), or driven by new
trends, such as consumers seeking more experience-associated products, after two years of restrictions.
Total Household Spending
We project higher household spending growth over 2022 as Vietnamese households emerge from Covid-related restrictions. We
forecast real household spending to grow by 5.7% y-o-y over 2022, significantly improving from the 1.8% y-o-y growth in 2021.
Over the medium term (2022-2026), real household spending will grow by an average of 7.2%, in-line with the five years leading up
to 2020 (2015-2019), when growth averaged 7.2% per year.
In the long term, Vietnam boasts a robust consumer spending outlook which continues to be supported by the younger population.
Vietnam has one of the largest shares of young adults (20-39 years old) as a percentage of its total population in Asia at 32.5% as at
2022. This consumer group is more open to modern retailing concepts and drives trends, as well as having greater purchasing
power. In addition, Vietnam offers a less saturated market, than some of Asia's developed states for investors, presenting more
attractive long-term growth opportunities.
Growth Boosted By Covid Restrictions Emergence In 2022
Total Household Spending, Real Growth, % y-o-y (2016-2026)
e/f = Fitch Solutions estimate/forecast. Source: National Statistics, Fitch Solutions
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Since the start of 2021, inflationary pressures have been rising in many countries globally, as base effects, higher commodity prices
and supply-chain challenges create localised shortages. On the demand side, there has been pent-up demand for products and
services that were limited during the pandemic years. The Ukraine-Russia conflict has also significantly impacted the global supply
prices of key commodities, such as oil and gas, fertiliser, wheat, corn and barley. The commodity price increases are already feeding
through into higher consumer prices and will continue to over 2022. We believe that rising consumer price inflation is a key risk to
consumer spending over 2022, as it has the potential to erode purchasing power and shift spending away from discretionary
spending. As a result, nominal growth rates across a number of our key consumer spending indicators will be factoring in
heightened costs, with inflation driving the growth outlook. We project this will be the case for most countries in 2022, as well as a
majority of countries over 2023.
Inflation in Vietnam has consistently tracked above the 2.0% y-o-y market level since the country began easing restrictions in 2021.
Fuel and food prices remained the main drivers for inflation in the country, followed by household equipment, restaurant and hotels.
Our Country Risk team forecasts inflation to average 2.6% over 2022, but will end the year at 3.7% y-o-y, suggesting that prices will
continue to rise over the latter half of the year. Inflation will maintain at an average of 3.5% a year over the remainder of our forecast
period.
Inflation In Vietnam Will Remain Elevated Over 2022 And 2023
Vietnam - Consumer Price Inflation, % y-o-y avg (2018-2026)
f = Fitch Solutions forecast. Source: General Statistics Office Of Vietnam, Fitch Solutions
We can attribute global inflation to several channels. Firstly, supply-chain challenges and bottlenecks around economies reopening
have create localised shortages, resulting in temporary price pressures for a number of goods. Secondly, natural factors such as
droughts, floods and other natural disasters have impacted crops from Brazil to Malaysia and Indonesia. This has put upwards price
pressure on key commodities in the global food production chain. This was recently exacerbated by the Russian invasion of Ukraine
in February 2022, with its resultant sanctions threatening the global supply of key food commodities, such as wheat, corn, barley
and fertilisers. Finally, labour shortages created by employees reconsidering their pre-Covid jobs, as well as border restrictions
limiting migrant labour has created localised labour shortages, putting upward pressure on wage inflation.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Inflation Will Persist Over The Short Term
Inflation Channels
Source: Fitch Solutions
Essential And Non-Essential Spending
The first place we believe inflation will be most noticeable is essential and non-essential spending allocations. High inflation will
inflate nominal growth rates in both categories, but as high prices put pressure on household budget constraints, we believe
household spending allocations will shift away from the less vital non-essential spending categories (such as recreation and culture
or restaurant and hotels) into more essential spending categories, such as food and non-alcoholic drinks or utilities, especially as
these categories experience their own inflation, causing households to prioritise them more.
Spending on essential goods (food and non-alcoholic drinks, clothing and footwear, housing and utilities, communication and
transport) will grow by 9.4% y-o-y in 2022, as households adjust their spending levels to the new normal and spend on categories
outside of the necessities (food and non-alcoholic drinks). As a proportion of spending, Vietnamese households will allocate 59.6%
of their budgets towards essential items. This will result in a total of VND2,884trn (USD125.4bn) spent on essentials over 2022. We
forecast essential spending growth to average 10.6% y-o-y over the medium term, while non-essential spending growth will average
10.7% y-o-y.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Essential And Non-Essential Spending
Vietnam - Essential & Non-Essential Spending (2016-2026)
e/f = Fitch Solutions estimate/forecast. Source: National statistics, Fitch Solutions
As is characteristic of many emerging markets, food and non-alcoholic drinks, and housing and utilities are the two largest spending
categories. Despite having a high growth rate, clothing and footwear spending will remain the smallest essential category. The
spending on this category is driven by Vietnam's large young-adult population aged between 20 and 39 (32.5% of the total
population), driving demand for fast-fashion clothing in the country. We highlight that the fastest-growing essential spending
category will be communications spending. This comes on the back of a strong uptick in consumer spending on consumer
electronics, particularly for mobile handsets, which comes as a result of rising disposable incomes and favourable young-adult
demographics.
ESSENTIAL AND NON-ESSENTIAL SPENDING (VIETNAM 2020-2026)
Indicator
2020
2021e
2022f
2023f
2024f
2025f
2026f
Essentials spending, VNDbn
2,544,402.5 2,636,726.2 2,883,556.5 3,221,800.1 3,576,370.0 3,966,694.7 4,371,113.0
Non-Essentials spending, VNDbn
1,725,819.1 1,789,041.7 1,958,388.4 2,190,525.9 2,433,882.8 2,701,800.9 2,979,403.0
Essentials spending, % total
59.58
59.58
59.55
59.53
59.50
59.48
59.47
Non-Essentials spending, % total
40.42
40.42
40.45
40.47
40.50
40.52
40.53
109.63
113.85
125.37
139.47
153.95
169.07
184.46
Non-Essentials spending, USDbn
74.36
77.25
85.15
94.83
104.77
115.15
125.73
Essentials spending, VND % y-o-y
3.68
3.63
9.36
11.73
11.01
10.91
10.20
Non-Essentials spending, VND % y-o-y
3.90
3.66
9.47
11.85
11.11
11.01
10.27
Essentials spending, USDbn
e/f = Fitch Solutions estimate/forecast. Source: National statistics, Fitch Solutions
We still expect to see steady growth in non-essentials (alcoholic drinks and tobacco, furnishing and home, health, recreation and
culture, education, restaurants and hotels and personal, insurance and other), due to continued income growth among the affluent
middle class. Spending on this category will grow by 9.5% y-o-y over 2022, with households allocating 40.5% of their budgets
towards non-essentials. Overall, Vietnamese households will spend a total of VND1,958trn (USD85.2bn) on non-essential items in
2022. Personal, insurance and other spending is set to remain the largest category within the non-essential segment. Recreation
and culture is another category which will expand rapidly, as we expect Vietnamese households to place greater priority on leisure
and entertainment over our forecast period.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Steady Growth In Non-Essentials
Vietnam - Total Household Spending Breakdown % total (2022)
f = Fitch Solutions forecast. Source: National statistics, Fitch Solutions
Food, Drink And Tobacco
Outlook For 2022
As is the case with many developing countries, food and drink represents the largest portion of expenditure in Vietnamese
household spending. According to our forecasts, food and non-alcoholic drinks spending will reach VND1,025trn (USD44.6bn) in
2022 and increase to VND1,557trn (USD65.7bn) in 2026, while alcohol and tobacco will account for VND89trn (USD3.9bn) of
spending in 2022 and reach VND135.1trn (USD5.7bn) in 2026. Both food and non-alcoholic drinks as well as alcohol and tobacco
spending will see a growth rate of 10.7% over the forecast period. Growth in alcohol and tobacco spending will come from an
expanding population and increasing affluence-instigated purchasing of more expensive and premium alcohol and tobacco
products, of which consumption is deeply rooted in Vietnamese culture.
Covid-19 Assessment And Recovery
The pandemic-induced lockdowns have caused many workplace, such as factories and offices to close. While the Vietnamese
economy and real wages of workers have been growing, many still rely on their monthly salaries to fund their spending. Sluggish
economic conditions and the suspension of salaries of some employees thus weaken consumers' propensity to spend. The
lockdowns of entire regions have also meant that transportation costs skyrocketed due to a lack of drivers and the increased delays
on the road with multiple government checkpoints to enforce movement restrictions. The costs incurred are then passed down to
consumers in the forms of raised prices, further pricing out consumers who were already struggling because of the pandemic. As
such, we have revised downwards our food spending forecast for 2020 to 3.2% y-o-y, from the pre-Covid forecast of 10.3% y-o-y. In
2021, we estimate food and non-alcoholic drinks spending grew by by 3.7%, a slight uptick from the previous year as adapting pains
to pandemic living eased slightly. However, the overall negative outlook of the economy has continued to repressed spending
growth.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Structural Trends
Vietnamese consumers have a favourable view towards foreign-branded food and drink products, as they are considered safe and
of high quality. Food safety issues are important in Vietnam, which has experienced several high-profile scandals concerning toxic
products made by local manufacturers. This means that consumers are, on the whole, willing to pay more to ensure, what they
consider to be, proper quality and hygiene. We believe this will be one of the key drivers behind the future spending growth in the
sector, as even poorer households put significant emphasis on food safety.
The ongoing expansion of the mass grocery retail industry will also drive per capita food consumption levels up, provided goods sold
through such outlets remain competitively priced. Ultimately, food consumption growth will be driven by the government's ability to
harness rural spending power and by modern retailers' ability to find a model that stirs consumer interest, without forgetting that
price will remain the major purchasing determinant. Within alcoholic drinks and tobacco spending, alcoholic drinks spending will
grow at a slightly faster rate of 10.9% y-o-y compared with tobacco spending, which will grow by 10.3% y-o-y over the medium
term.
FOOD AND DRINKS (NON-ALCOHOLIC, ALCOHOLIC AND TOBACCO) SPENDING (VIETNAM 2020-2026)
Indicator
2020
2021e
2022f
2023f
2024f
2025f
2026f
903,930.63
936,906.15
1,025,160.91
1,146,122.25
1,272,926.40
1,412,523.70
1,557,164.46
866,596.74
899,316.06
984,508.41
1,101,272.43
1,223,676.52
1,358,429.85
1,498,051.63
37,333.89
37,590.09
40,652.50
44,849.81
49,249.87
54,093.85
59,112.84
78,656.67
81,306.85
88,965.62
99,462.67
110,466.76
122,581.04
135,132.99
56,973.41
59,059.11
64,723.06
72,486.02
80,623.96
89,582.93
98,865.57
21,683.26
22,247.73
24,242.56
26,976.65
29,842.80
32,998.12
36,267.43
3.35
3.65
9.42
11.80
11.06
10.97
10.24
3.23
3.78
9.47
11.86
11.11
11.01
10.28
6.07
0.69
8.15
10.32
9.81
9.84
9.28
3.75
3.37
9.42
11.80
11.06
10.97
10.24
3.54
3.66
9.59
11.99
11.23
11.11
10.36
Food and nonalcoholic drinks
spending, VNDbn
Food spending,
VNDbn
Non-alcoholic drinks
spending, VNDbn
Alcoholic drinks and
tobacco spending,
VNDbn
Alcoholic drinks
spending, VNDbn
Tobacco spending,
VNDbn
Food and nonalcoholic drinks
spending, VND % y-oy
Food spending, VND
% y-o-y
Non-alcoholic drinks
spending, VND % y-oy
Alcoholic drinks and
tobacco spending,
VND % y-o-y
Alcoholic drinks
spending, VND % y-oy
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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16
Vietnam Consumer & Retail Report | Q3 2022
Indicator
2020
2021e
2022f
2023f
2024f
2025f
2026f
4.31
2.60
8.97
11.28
10.62
10.57
9.91
38.95
40.45
44.57
49.62
54.80
60.20
65.71
3.39
3.51
3.87
4.31
4.76
5.22
5.70
Tobacco spending,
VND % y-o-y
Food and nonalcoholic drinks
spending, USDbn
Alcoholic drinks and
tobacco spending,
USDbn
Food and nonalcoholic drinks
spending, VND per
29,534,363.63 30,018,851.10 32,275,293.18 35,354,034.72 38,605,446.15 41,986,824.90 45,368,724.15
household
Alcoholic drinks and
tobacco spending,
2,569,969.96
2,605,104.15
2,800,917.78
3,068,090.42
3,350,247.58
3,643,683.10
3,937,163.80
9,286,458.06
9,543,824.84 10,360,022.48 11,495,867.44 12,676,771.11 13,970,605.43 15,299,520.46
VND per household
Food and nonalcoholic drinks
spending, VND per
capita
Alcoholic drinks and
tobacco spending,
808,072.88
828,234.82
899,064.53
997,633.26
1,100,112.19
1,212,391.25
1,327,714.61
VND per capita
e/f = Fitch Solutions estimate/forecast. Source: National Statistics, Fitch Solutions
Clothing And Footwear
Outlook For 2022
Clothing and footwear will account for a relatively small proportion of overall household spending at VND143.5trn (USD6.2bn),
making up 3.0% of the total spending in 2022. Over the medium term, we forecast spending to grow by an average of 10.8% a year,
taking spending to VND218.7trn (USD9.2bn) by 2026. Within clothing and footwear, spending on clothing will make up the largest
share, at VND114.9trn in 2022, compared with the VND28.8trn spent on footwear.
Covid-19 Assessment And Recovery
Spending on clothing and footwear underperformed over 2020, with growth estimated at 3.3% y-o-y over 2020 as compared to
10.3% in 2019. Covid-related lockdowns and restrictions limited the number of purchasing triggers traditionally associated with
clothing and footwear, such as limited office work and the banning of social gatherings. While there has been limited growth in
online retail, consumers generally reprioritised away from unnecessary items during the worst of the pandemic. In 2021, we
estimate spending on clothing and footwear expanded by 3.7%, with growth remaining subdued due to new outbreaks throughout
the year that restricted social gathering.
Structural Trends
The rapidly expanding population, and especially the emerging middle class, will drive the demand for branded and higher-quality
clothing items. Meanwhile, the large youthful demographic will also drive the demand for fast-fashion brands such
as H&M and Inditex brands. Given the demand for foreign brands, we see strong advantages for the retailers already
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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17
Vietnam Consumer & Retail Report | Q3 2022
manufacturing products in Vietnam, as this would enable them to avoid import taxes.
CLOTHING AND FOOTWEAR SPENDING (VIETNAM 2020-2026)
Indicator
Clothing and footwear
spending, VNDbn
Clothing spending, VNDbn
Footwear including repair
spending, VNDbn
Clothing and footwear
spending, VND % y-o-y
Clothing spending, VND % y-oy
Footwear including repair
spending, VND % y-o-y
Clothing and footwear
spending, USDbn
Clothing spending, VND per
household
Footwear including repair
spending, VND per household
Clothing spending, VND per
capita
Footwear including repair
spending, VND per capita
2020
2021e
2022f
2023f
2024f
2025f
2026f
126,408.54
131,057.86
143,521.19
160,607.95
178,520.96
198,242.52
218,677.24
102,106.77
105,191.09
114,930.97
128,283.98
142,282.70
157,694.77
173,664.16
24,301.77
26,033.03
28,774.53
32,533.01
36,473.25
40,811.30
45,306.22
3.29
3.68
9.51
11.91
11.15
11.05
10.31
3.47
3.02
9.26
11.62
10.91
10.83
10.13
2.54
7.12
10.53
13.06
12.11
11.89
11.01
5.45
5.66
6.24
6.95
7.68
8.45
9.23
3,336,161.49 3,370,364.94 3,618,388.87 3,957,131.49 4,315,164.85 4,687,427.80 5,059,787.61
794,018.10
834,108.82
905,912.70 1,003,534.57 1,106,164.54 1,213,103.16 1,320,018.26
1,048,985.66 1,071,532.44 1,161,463.96 1,286,717.61 1,416,959.59 1,559,684.60 1,706,292.73
249,662.25
265,186.31
290,788.25
326,313.55
363,228.41
403,645.33
445,144.68
e/f = Fitch Solutions estimate/forecast. Source: National statistics, Fitch Solutions
Household Goods
Outlook For 2022
We forecast household goods spending to reach VND220.1trn (USD9.6bn) in 2022. Within the household goods segment, the
largest proportion will be spent on furniture and furnishings, making up VND69.6trn in 2022, up from VND63.2trn in 2021.
Following this category, is audio-visual, camera and computer spending, which will reach VND46.9trn in 2022, up from VND43.5trn
in 2021. Spending on this category will be supported by a technology-literate, urban middle class with increasing amounts of
disposable income.
Covid-19 Assessment And Recovery
During the initial lockdown phases, non-essential retail was shuttered, resulting in a significant drop in spending. However, as
Vietnam authorities were quick to react to the Covid-19 outbreak, most restrictions on non-essential business were lifted relatively
quickly, allowing more consumers to return to their workplace. We highlight that the service industry within Vietnam employs 35.3%
of all employed workers in 2019 (latest data available), while agriculture and industry employs the remaining 64.7%. As a result, most
consumers are unlikely to invest in their home for the purpose of working from home as the work performed in the agriculture and
industry requires employees to be physically present at the work location, resulting in sluggish household goods spending growth
of 4.6% y-o-y in 2020 despite the work from home arrangements. In 2021, household goods spending is estimated to have grown
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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18
Vietnam Consumer & Retail Report | Q3 2022
by 4.2%, as the country continued to struggle with the disruptions caused by the pandemic.
Structural Trends
Relatively low household incomes and comparatively limited access to consumer credit constrained spending on big-ticket items
such as furniture and household appliances, and consumer electronics. We forecast the furnishing and home category to
account for 5.1% of total consumer spending in 2022. In our household-goods spending breakdown (made up of furniture and
furnishing spending, household textiles, household appliances, glass, tableware and utensils, home and garden tools, audio-visual,
camera and computer, and toys, pets, sports and garden spending), we estimate the fastest-growing segment across our mediumterm forecast (2022-2026) to be glass, tableware and utensils spending, expanding by 11.3% y-o-y. This growing spending comes
on the back of rising disposable incomes, driving the spending in this group.
HOUSEHOLD GOODS SPENDING (VIETNAM 2020-2026)
Indicator
Household goods spending,
VNDbn
Furniture and furnishings
spending, VNDbn
Household textiles spending,
VNDbn
Household appliances
spending, VNDbn
Glass, tableware and utensils
spending, VNDbn
Home & garden tools/
equipment spending, VNDbn
AV, camera and computer
spending, VNDbn
Toys, sports, gardens and pets
spending, VNDbn
Household goods spending,
VND % y-o-y
Furniture and furnishings
spending, VND % y-o-y
Household textiles spending,
VND % y-o-y
Household appliances
spending, VND % y-o-y
Glass, tableware and utensils
spending, VND % y-o-y
2020
2021e
2022f
2023f
2024f
2025f
2026f
193,048.05
201,097.89
220,133.98
246,227.32
273,581.57
303,696.32
334,899.43
59,853.38
63,203.80
69,573.90
78,300.48
87,447.74
97,516.65
107,948.75
11,953.08
12,677.31
13,889.56
15,550.25
17,290.99
19,207.13
21,192.38
35,903.23
37,714.28
41,445.26
46,556.44
51,914.02
57,811.41
63,921.52
4,846.53
5,086.57
5,600.93
6,305.55
7,044.15
7,857.16
8,699.49
1,905.96
2,035.31
2,229.40
2,495.31
2,774.03
3,080.83
3,398.70
43,451.83
43,525.77
46,854.34
51,421.48
56,210.22
61,483.54
66,948.07
35,134.05
36,854.84
40,540.59
45,597.82
50,900.43
56,739.61
62,790.52
4.62
4.17
9.47
11.85
11.11
11.01
10.27
1.83
5.60
10.08
12.54
11.68
11.51
10.70
6.67
6.06
9.56
11.96
11.19
11.08
10.34
2.60
5.04
9.89
12.33
11.51
11.36
10.57
1.02
4.95
10.11
12.58
11.71
11.54
10.72
8.21
6.79
9.54
11.93
11.17
11.06
10.32
10.13
0.17
7.65
9.75
9.31
9.38
8.89
Home & garden tools/
equipment spending, VND % yo-y
AV, camera and computer
spending, VND % y-o-y
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Indicator
Toys, sports, gardens and pets
spending, VND % y-o-y
Household goods spending,
USDbn
Household goods spending,
VND per household
Household goods spending,
VND per capita
2020
2021e
2022f
2023f
2024f
2025f
2026f
4.79
4.90
10.00
12.47
11.63
11.47
10.66
8.32
8.68
9.57
10.66
11.78
12.94
14.13
6,307,509.92 6,443,257.63 6,930,510.73 7,595,288.53 8,297,210.71 9,027,277.98 9,757,453.63
1,983,263.53 2,048,490.20 2,224,619.51 2,469,716.14 2,724,533.75 3,003,716.98 3,290,468.58
e/f = Fitch Solutions estimate/forecast. Source: National statistics, Fitch Solutions
Personal Care And Effects
Outlook For 2022
Personal care and effects is a significant retail sub-sector, accounting for VND12mn per household and VND3.9mn per capita in
2022. The total segment is expected to reach VND598.4trn (USD25.3bn) in 2026, up from VND382.5trn (USD16.6bn) in 2022. We
highlight the strong upside potential of this retail sub-sector, as rising disposable incomes and the youthful population of Vietnam
desires for high-quality and distinctive personal care and effects. This will bolster personal care and effects spending growth, which
is forecast at 12% annually over the next five years.
Covid-19 Assessment And Recovery
Personal care and effects spending was one of the hardest-hit categories over 2020. Many of the traditional purchasing triggers
(work and social events) were drastically diminished over the year. The economic realities of the recession has forced many
consumers to shift spending away from personal effects. Spending on personal care and effects grew by 2.6% y-o-y over 2020, a
significant decline when compared to the annual average of 11.6% over 2015-2019. In 2021, spending in this sector is estimated to
have risen, growing by 4.9% y-o-y despite the restrictions imposed on social gathering for the greater part of the year.
Structural Trends
Personal care products spending will account for the bulk of the total personal care and effects spending, at VND463trn in 2026,
while personal effects will account for the remaining VND135.6rn in 2026. This comes as no surprise given that many consumers
begin first by spending on smaller purchases by using face care and make-up products before spending a larger share of their
disposable incomes on more expensive facials and spa treatments.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
PERSONAL CARE AND EFFECTS SPENDING (VIETNAM 2020-2026)
Indicator
2020
2021e
2022f
2023f
2024f
2025f
2026f
324,137.68
340,091.55
382,472.45
434,061.31
487,020.76
542,194.96
598,389.54
250,701.33
263,785.93
296,433.17
336,173.57
376,969.77
419,472.06
462,760.38
73,436.35
76,305.62
86,039.28
97,887.74
110,050.99
122,722.89
135,629.16
2.62
4.92
12.46
13.49
12.20
11.33
10.36
3.46
5.22
12.38
13.41
12.14
11.27
10.32
-0.16
3.91
12.76
13.77
12.43
11.51
10.52
13.97
14.68
16.63
18.79
20.97
23.11
25.25
Personal care and
effects spending,
VNDbn
Personal care
products spending,
VNDbn
Personal effects
products spending,
VNDbn
Personal care and
effects spending, VND
% y-o-y
Personal care
products spending,
VND % y-o-y
Personal effects
products spending,
VND % y-o-y
Personal care and
effects spending,
USDbn
Personal care and
effects spending, VND 10,590,635.75 10,896,670.48 12,041,436.95 13,389,338.44 14,770,416.90 16,116,575.38 17,434,362.65
per household
Personal care and
effects spending, VND 3,330,002.16
3,464,353.59
3,865,171.94
4,353,733.91
4,850,123.83
5,362,594.48
5,879,323.10
per capita
e/f = Fitch Solutions estimate/forecast. Source: National statistics, Fitch Solutions
Tourism Spending
We expect the tourism sector to remain as one of the hardest hit by the Covid-19 outbreak in 2022 due to the restrictions on global
travel as government's seek to reduce the risk of importing the virus and consumer's fear of contracting the virus due to travelling.
We expect to see a gradual recovery in the tourism sector over the 2022-2026 period. We forecast annual average growth of 321%
y-o-y in tourist arrivals over 2022-2026. We note that Vietnam is not a retail tourism hub and we do not expect its leisure and
cultural tourists to provide a considerable boost to the country's retail sector. We expect the sector to bolster spending in tourismfacing industries such as restaurants and hotels. Vietnam's tourism market is a key pillar for the country's economy and it is a
popular destination among tourists from a wide array of countries. However, we expect to see a short-term drop in arrivals from
China in light of the Covid-19 health crisis.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Household Characteristics
Key View: We project household disposable income to grow by 9.3% in 2022, following massive growth of 31.7% in 2021. Vietnam
announced plans to raise its minimum wage by 6% from July 2022. The effects of the minimum wage hike feed into our expectation
that the number of households falling into the USD5,000-USD10,000 income bracket will increase over the medium term. As a
result, consumers may increase spending on expensive non-essentials over 2022 due to the increase in purchasing power.
Latest Updates
• We forecast disposable income per household to rise from VND158.9mn (USD6,908) in 2022 to VND226.1mn (USD9,542) in
2026. The proportion of households with a disposable income of USD5,000-plus is projected to reach 69.8% in 2026, increasing
from 51.4% in 2022.
• Vietnam announced in April 2022 plans to raise its minimum wage by 6% from July the same year to help workers weather the
impact of the Covid-19 pandemic. If the plan follows through, the minimum monthly wage would be raised to between
VND3.3mn (USD142) and VND4.7mn (USD204)
• The overall number of households will continue rising at a rapid pace. By 2026, Vietnam is projected to have 34.3mn households,
up from 31.8mn in 2022.
Purchasing Power And Demographic Trends
Household Income Breakdown (2022-2026)
f = Fitch Solutions forecast. Source: National sources, Fitch Solutions
Income Growth Outlook
In 2022, we forecast Vietnamese household disposable income to accelerate, increasing by 9.8% y-o-y to reach VND158.9mn
(USD6,908) from VND144,8mn (USD6,250) in 2021. The current monthly minimum wage ranges between VND3,070,000 (USD132)
to VND4,420,000 (USD190) for different regions, which is a 5.1% to 5.7% increase when compared to the previous minimum wage.
We highlight that while there has not been any minimum wage rise since January 2020, the Vietnamese authorities announced that
they are looking to raise the minimum wage by 6% from July 2022. If so, the minimum monthly wage would be raised to between
VND3.3mn (USD142) and VND4.7mn (USD204) We also note that household disposable income growth in 2022 will outpace
inflation, at 9.8% versus 3.7% respectively. This indicates that the average Vietnamese consumer purchasing power has increased in
2022 when compared with 2021, and spending on goods will likely be at higher price points than that of 2021.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Consumer Purchasing Power Will Increase In 2022
Vietnam - Disposable Incomes & Consumer Price Inflation (2017-2026)
e/f = Fitch Solutions estimate/forecast. Source: National statistics, Fitch Solutions
Structural Trends
Vietnam's rapid economic development is expected to help the emergence of a new consumer class, particularly in major urban
centres, that has an interest and can afford to participate in modern consumption. This rise in purchasing power will trigger an
uptick in consumer spending, which we expect to become more pronounced over the medium term.
While rising incomes indicate a rapid expansion of the Vietnamese middle class, this is from a very low base and will continue to
represent just a fraction of the overall population. By 2026, we project 69.8% of total households to be earning USD5,000-plus, while
30.2% will earn USD10,000-plus (middle-income segment) and 0.9% in the upper-income segment (household disposable income
of USD50,000-plus). This is still extremely small in comparison to many countries in the region, and shows that though Vietnam has
one of the strongest-growing retail sectors in Asia, it still has a long way to go before it becomes a viable proposition for large-scale,
high-end brand presences as the upper-income segment (household disposable income of USD50,000-plus) accounts for just
302,300 households.
Nevertheless, the rapid rise in average incomes and in the lower wage brackets represents the greatest potential for retailers over
the remainder of our 2022-2026 forecast period. Vietnam announced in April 2022 plans to raise its minimum wage by 6% from
July the same year to help workers weather the impact of the Covid-19 pandemic. If the plan follows through, the minimum monthly
wage would be raised to between VND3.3mn (USD142) and VND4.7mn (USD204) As a result, consumers may increase spending on
expensive non-essentials over 2022 due to the increase in purchasing power, and general and luxury retailers will do well. Retailers
offering budget and discount products will still fare well, as will those balancing affordability with quality, owing to longstanding
Vietnamese price consciousness.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
HOUSEHOLD INCOME DATA (VIETNAM 2019-2026)
Indicator
Households,
'000
2019e
2020e
2021e
2022f
2023f
2024f
2025f
2026f
29,953.7
30,606.1
31,210.6
31,763.0
32,418.4
32,972.7
33,642.1
34,322.4
2.4
2.2
2.0
1.8
2.1
1.7
2.0
2.0
2.2
2.2
2.2
2.1
2.1
2.1
2.0
2.0
133,053,280
137,359,862
180,961,983
198,624,230
217,495,963
236,998,800
259,323,861
282,645,080
5,772
5,918
7,813
8,635
9,415
10,202
11,052
11,927
51,949,588
53,663,055
71,011,103
78,038,410
85,546,938
93,306,564
102,189,072
111,467,924
2,253
2,312
3,066
3,392
3,703
4,016
4,355
4,703
106,442,624
109,887,890
144,769,586
158,899,384
173,996,771
189,599,040
207,459,088
226,116,064
4,617
4,734
6,250
6,908
7,532
8,161
8,842
9,542
41,559,670
42,930,444
56,808,882
62,430,728
68,437,550
74,645,251
81,751,258
89,174,339
1,803
1,849
2,452
2,714
2,962
3,213
3,484
3,763
20.0
20.0
20.0
20.0
20.0
20.0
20.0
20.0
Households,
% y-o-y
Average
working
adults per
household
Gross
Income, per
household,
VND
Gross
Income, per
household,
USD
Gross
Income, per
capita, VND
Gross
Income, per
capita, USD
Disposable
Income, per
household,
VND
Disposable
Income, per
household,
USD
Disposable
Income, per
capita, VND
Disposable
Income, per
capita, USD
Tax and social
contributions,
% of gross
income
Tax and social
contributions,
per capita,
10,389,917.74 10,732,611.14 14,202,220.67 15,607,682.13 17,109,387.65 18,661,312.82 20,437,814.54 22,293,584.91
VND
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Indicator
2019e
2020e
2021e
2022f
2023f
2024f
2025f
2026f
450.8
462.4
613.2
678.6
740.7
803.3
871.1
940.8
8,555.7
9,125.3
14,163.6
16,326.4
18,339.4
20,199.7
22,116.4
23,941.2
2,091.1
2,259.2
4,208.0
5,259.0
6,368.1
7,545.0
8,905.4
10,365.6
46.2
50.0
99.5
128.9
162.1
199.8
246.9
302.3
28.6
29.8
45.4
51.4
56.6
61.3
65.7
69.8
7.0
7.4
13.5
16.6
19.6
22.9
26.5
30.2
0.2
0.2
0.3
0.4
0.5
0.6
0.7
0.9
Tax and social
contributions,
per capita,
USD
Households
'000
Disposable
Income
USD5,000+
Households
'000
Disposable
Income
USD10,000+
Households
'000
Disposable
Income
USD50,000+
Households
Disposable
Income
USD5,000+,
% total
households
Households
Disposable
Income
USD10,000+,
% total
households
Households
Disposable
Income
USD50,000+,
% total
households
e/f = Fitch Solutions estimate/forecast. Source: National sources, Fitch Solutions
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Demographic Forecast
Key View: *Covid-19 Update: Our demographic data is sourced from the UN and currently no impact assessment of
the impact of Covid-19 on the demographics outlook is available, as soon as data is made available we will include it
within our analysis.* The Vietnamese consumer demographics offers a sizeable and increasingly urbanised population in
emerging Asia. Further benefiting consumer-facing retailers is the fact that Vietnam has the highest level of female labour
participation in the region, offering a larger consumer base for retailers to target. We expect to see a steady shift in consumer
purchasing preferences over the long term as the Vietnamese population is ageing while the younger population declines as a
proportion of the total. Nonetheless, considerable opportunities lie ahead for retailers operating in the health and convenience
segment.
Demographic Trends
Looking at the demographic trends taking place within a market gives an insight into where future opportunities will emerge for
consumer-facing industries. These are generally longer-term trends, taking place over multiple decades rather than our typical fiveyear forecast period. This section therefore provides analysis, charts and data up to 2050, to analyse the demographic trajectories of
Vietnam to better understand the long-term population shifts and their impact from a consumer perspective.
Population Size
Vietnam's population will grow by around 16.9mn over our long-term forecast period from 2015 to 2050. We forecast the total
population to reach 109.6mn in 2050, up from 92.7mn in 2015. Strong birth rates will push the population count up. This bodes well
for consumer-facing companies in Vietnam, which will see their total market expand over the coming decades, creating more
opportunities for growth.
Population Vs. Emerging Asia
Total Population, mn
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions
• Simply put, larger population sizes translate into a larger consumer market for companies to target.
• If that population continues to grow over our 2050 forecast period, this is a positive signal for investors, with their target market
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derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
expanding.
• In cases where populations are shrinking, this poses a potential risk. Particularly if this is precipitated by a 'brain drain' among
young, educated adults, which are an important slice of the population.
POPULATION (VIETNAM 2015-2050)
Geography
Vietnam
Indicator
2015
2020e
2025f
2030f
2035f
2040f
2045f
2050f
Population, mn
92.68
97.34
101.11
104.16
106.30
107.80
108.90
109.61
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions
Adult Population Trends
The Vietnamese population is slowly ageing as people are living longer. This will lead to the pensionable population (those over the
age of 65 years old) increasing in size over our forecast period to 2050. This will reach 22.4mn in 2050, up from 6.2mn in 2015, and
account for 20.4% of the total population. Those in the middle-aged segment of the population (aged 40-64 years old) will increase
in their percentage of the population, from 28% in 2015 to 31% in 2050, an increase of around 8.0mn in total terms. As such,
opportunities will be greater for retailers catering to the older segments of the population. The young adult population (20-39 years
old) will fall by 4.1mn in total terms, from 32.3mn in 2015 to 28.2mn in 2050. The young adult population will also decline as a
percentage of the population, from 34.8% in 2015 to 25.7% in 2050.
Adult Population Trends
Adult Population Trends (2000-2050)
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions
• We have broken down the adult population into three groups: young adults (20-39 years old), middle aged (40-64 years old) and
pensionable population (65+ years old). We have used the percentage of the population to determine what age range will
account for a larger or smaller amount by 2050. This does not necessarily mean that a group is declining in total numbers if the
percentage is falling, just that other ranges are growing at a faster pace.
• Young Adults (Trendsetters): alcohol, technology (latest devices, e-commerce), fashion, personal care, restaurants, recreation,
furnishing and home (lower end), transport (public, taxis, second-hand cars), experiences (holidays, unique/shareable activities),
education, utilities and sporting goods.
• Middle Aged (Premiumisation): spirits, personal effects, restaurants, recreation and culture, health, transport (premium
brands, larger-sized vehicles, new), financial products (life/home insurance), furnishing and home (antiques, renovations), hotels
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
(domestic), education, utilities and garden products.
• Pensionable Population (Retiring, Out Of Workforce): health, financial, traditional food and drink, convenience, culture,
holidays, property and care services.
YOUNG ADULTS/MIDDLE AGED/PENSIONABLE POPULATION (VIETNAM 2015-2050)
Indicator
2015
2020e
2025f
2030f
2035f
2040f
2045f
2050f
Population, 20-39 yrs, total, '000
32,269.3
31,590.4
29,823.2
28,075.5
26,792.2
27,626.8
28,364.6
28,171.1
Population, 40-64 yrs, total, '000
25,971.9
29,013.9
31,593.5
34,097.2
36,206.9
35,956.3
34,944.4
33,932.1
Population, 20-39 yrs, % total
34.8
32.5
29.5
27.0
25.2
25.6
26.0
25.7
Population, 40-64 yrs, % total
28.0
29.8
31.2
32.7
34.1
33.4
32.1
31.0
Pensionable popn, % of total
6.7
7.9
9.8
11.9
14.1
16.3
18.3
20.4
Pensionable pop., total, '000
6,170.8
7,656.7
9,911.3
12,445.6
14,985.2
17,544.0
19,948.6
22,412.1
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions
Baby, Child And Teenager Population
We forecast that the youth population (those under the age of 20) will fall by 3.2mn over our long-term forecast period from 2015
to 2050, accounting for 17.2% of the total population in 2050, down from 23.2% in 2015. This significant shift shows major changes
in the demographic makeup at current levels compared with what it would look like in 2050, affecting retailers operating in this
segment.
All the age groups will shrink as a share of the total population and in total terms. Babies and toddlers within the ages of 0-4 years
old will see the largest drop of 1.2mn, reaching 6.4mn in 2050 and accounting for 5.9% of the total population in 2023, down from
7.6mn in 2015 at 8.3% of the population. Pre-teenagers (10-14 years old) will see the smallest shift in percentage terms, accounting
for 2.7% of the total population in 2050, down from 3.4% in 2015. Teenagers (15-19 years old) will also represent a much smaller
portion of the population by 2050, at 5.7% down from 7.5%, totalling 6.3mn in 2050. Young children (5-9 years old) will see their
total numbers fall from 7.2mn to 6.3mn over this forecast period, accounting for 2.9% of the population in 2015, down from 4.1% in
2023.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Babies, Children & Teenage Population Trends
Babies, Children & Teenage Population Trends (2000-2050)
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions
• We have broken down the non-adult population into four groups: babies (0-4 years old), children (5-9 years old), pre-teenagers
(10-14 years old) and teenagers (15-19 years old). We have used the percentage of the population to determine what age range
will account for a larger or smaller amount by 2050. This does not necessarily mean that a group is declining in total numbers if
the percentage is falling, just that other ranges are growing at a faster pace.
• Babies: clothing and footwear, toys, games and personal care.
• Children: clothing and footwear, toys, games, confectionery and soft drinks.
• Pre-Teenagers (Allowances): fashion, recreation, technology (smartphones, apps, video games/consoles), restaurants (fast
food/quick serve, fast casual), confectionary and sporting goods.
• Teenagers (Minimum Wage): restaurants (fast food/quick serve, fast casual), alcohol, tobacco (vaporisers), personal care
(makeup), technology (smartphones, apps, video games/consoles), fashion, recreation and sporting goods.
POPULATION: CHILDREN AND TEENAGERS (VIETNAM 2015-2050)
Indicator
2015
2020e
2025f
2030f
2035f
2040f
2045f
2050f
Population, 0-4 yrs, total, '000
7,642.8
7,892.5
7,374.4
6,974.5
6,390.7
6,224.9
6,333.3
6,408.9
Population, 5-9 yrs, total, '000
7,153.0
7,586.1
7,832.7
7,320.5
6,926.0
6,345.6
6,181.6
6,291.2
Population, 10-14 yrs, total, '000
6,547.6
7,098.2
7,525.3
7,774.9
7,267.5
6,874.9
6,296.5
6,133.7
Population, 15-19 yrs, total, '000
6,921.7
6,500.9
7,046.3
7,475.3
7,727.5
7,222.6
6,832.0
6,255.8
Population, 0-4 yrs, % total
8.2
8.1
7.3
6.7
6.0
5.8
5.8
5.8
Population, 5-9 yrs, % total
7.7
7.8
7.7
7.0
6.5
5.9
5.7
5.7
Population, 10-14 yrs, % total
7.1
7.3
7.4
7.5
6.8
6.4
5.8
5.6
Population, 15-19 yrs, % total
7.5
6.7
7.0
7.2
7.3
6.7
6.3
5.7
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Median Age
The median age of the Vietnamese population will increase from 30.5 years old in 2015 to 41.2 years old in 2050, indicating that the
population is ageing. This means that the average person will be roughly 11 years older in 2050 than at current levels, as the
population is living longer. This is one of the fastest rate overall and remains one of the highest in Emerging Asia.
Median Age Vs. Emerging Asia
Median Age
e/f = Fitch Solutions estimate/ forecast. Source: UN, Fitch Solutions
• This indicator works as a complement to our other population age forecasts, providing an average age of the population and
how that is changing over time.
• Developed markets typically have a higher score for this indicator, as they are ageing as people are living longer and birth rates
are falling. Older generations can present an opportunity if marketed to the right way; for example, through convenience, easyto-open packaging and the use of traditional ingredients.
• Emerging markets tend to be lower in average age, as birth rates remain strong and populations grow. This bodes well for
companies targeting trendsetting, younger generations entering the consumer market with higher levels of income than their
parents. One area of risk is that youth unemployment can be quite high in these markets, putting a cap on spending.
POPULATION, MEDIAN AGE OF POPULATION (VIETNAM 2015-2050)
Geography
Vietnam
Indicator
2015
2020e
2025f
2030f
2035f
2040f
2045f
2050f
Median age of population
30.5
32.5
34.6
36.7
38.5
39.7
40.4
41.2
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions
Urban And Rural Split
The urban population in Vietnam will grow at a faster rate than the total population over our forecast period to 2050 at 2.0% per
year compared with 0.6%, as more people move to larger cities and urban areas. This will lead to an additional 31.5mn urbanised
people in 2050, with the urban population reaching 62.8mn in 2050, up from 31.3mn in 2015. This will also increase the share of
the urban population as a percentage of the total, accounting for 57.3% of the population in 2050, up from 33.8% in 2015. Major
urban areas in Vietnam include Ho Chi Minh City, Hanoi and Da Nang, among many others. Conversely, those in the rural areas will
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derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
decline in total numbers and as a proportion of the population, from 61.3mn to 53.8mn and 66.4% to 46.8% over the 2015 to 2050
period. This should result in a larger base of higher-income consumers living in a condensed area for companies to target, a boon
for those operating in the market.
Urban & Rural Population Trends
Urban & Rural Population '000 (2000-2050)
e/f = Fitch Solutions estimate/forecast. Source: National sources, Fitch Solutions
• Markets with higher urbanisation levels are generally more attractive, because of developed logistics, concentrated consumers in
a smaller area and higher spending levels, among other reasons.
• By contrast, consumers in rural regions are harder to reach and typically have lower spending power, making investment a riskier
prospect, particularly in emerging markets.
RURAL/URBAN POPULATION (VIETNAM 2015-2050)
Indicator
2015
2020e
2025f
2030f
2035f
2040f
2045f
2050f
Urban pop., % of total
33.8
37.3
40.9
44.5
47.9
51.2
54.3
57.3
Rural pop., % of total
66.2
62.7
59.1
55.5
52.1
48.8
45.7
42.7
Urban pop., total, '000
31,333.2
36,346.2
41,361.8
46,305.9
50,925.4
55,186.7
59,112.6
62,831.1
Rural pop., total, '000
61,343.9
60,992.4
59,745.0
57,857.6
55,370.7
52,608.3
49,788.5
46,773.9
298.9
313.9
326.1
335.9
342.8
347.6
351.2
353.5
Population per sq km, persons
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions
Male And Female Split
Vietnam has more females (46.5mn) than males (46.2mn) in its population in 2015, a difference of about 282,150 between the two.
The female population will continue to be the majority for the forecast until 2050, when we forecast that the gap between the two
will widen, with the female population reaching 55.4mn and the male population reaching 54.3mn. The female demographic will
therefore be of growing importance to consumer-facing companies, especially as women increasingly enter the workforce. In
Vietnam, the female labour participation reached 72.7% in 2018, according to the World Bank. This is part of a longer-term trend
that has seen a fairly consistent rise since 1995, when the figure stood at 72.6%.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
In 2015, the young adult population (20-39 years old) featured the highest number of males and females, at 16.4mn and
15.9mn respectively. By 2050, the middle-aged population (40-64 years old) will feature the largest number of males and females,
at 17.0mn males and 16.9mn females.
• Outside of some extreme examples such as China, the male/female split tends to be about equal, with only a slight favourability
towards one gender.
• The rise of the female consumer is becoming an important part of companies' strategy as they begin to tailor products,
advertising and marketing towards women, whereas previously this had been male-focused or neutral.
POPULATION RATIO (VIETNAM 2015-2050)
Indicator
2015
2020e
2025f
2030f
2035f
2040f
2045f
2050f
Population, total, male, '000
46,197.5
48,598.3
50,471.2
51,922.3
52,863.0
53,491.5
53,950.9
54,252.5
Population, total, female, '000
46,479.6
48,740.3
50,635.6
52,241.3
53,433.1
54,303.5
54,950.2
55,352.5
e/f = Fitch Solutions estimate/forecast. Source: UN, Fitch Solutions
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Market Overview
Retail Trends
The rapid growth of Vietnam's retail sector will help draw a large number of foreign retail brands to Vietnam. In addition, we expect
consumer preferences for foreign labels to continue growing throughout our forecast period. However, the number of mall and
shopping complex developments remains comparatively small, given the size of the potential consumer market. We, therefore,
expect strong growth in retail infrastructure to cater to growing demand.
Latest Updates
• In December 2021, the toymaker Lego announced that it plans to build a new factory in Vietnam to keep up with rapidly
growing demand for its products among children across Asia, reportedly achieving double-digit growth in the region since 2019.
The Danish firm will invest more than USD1.0bn in the project and will start production in 2024.
• In November 2021, Nike reported that all its manufacturers in Vietnam were back to full operations after nearly 80% of Nike’s
footwear makers and half of its apparel providers in Vietnam were forced to halt production in mid-July 2021.
• Singapore-based logistics start-up Ninja Van is considering Vietnam as key expansion market, as the firm believes that Vietnam
is ready for a new phase of growth in e-logistics.
• In November 2021, Vietnam's Tiki raised USD258mn in a funding round led by AIA Insurance as the e-commerce start-up
looks to expand into life insurance and plans a US initial public offering.
Clothing And Footwear
As is the case for the retail sector as a whole, the Vietnamese clothing and footwear market is concentrated in the two major urban
centres: Hanoi and Ho Chi Minh City. Most of the foreign fashion retailers are based in large shopping centres or department stores.
Vietnam is known for having one of the world's largest garment and textiles industries, exporting its produce across the globe. As
such, it is not surprising that the local companies such as VietFashion Corp, Blue Exchange, Nhabe Corporation and Vinatex
have a considerable market share, though they have been facing increased competition from foreign retailers in recent years.
According to Vietnamnet, at the end of 2015 there were around 200 foreign fashion retailers operating in Vietnam, together
controlling 60% of the clothing market. Major international fashion groups present in Vietnam include high-end brands such as
Christian Dior, Ermenegildo Zegna and Hermes, all of which are looking to augment their current shop portfolios. Luxury
retailers have a strong desire to enter or expand their presence in Vietnam as the the country has a vibrant retail market, with rising
per capita income and a strong expansion of the middle class. Vietnamese rentals at key commercial retail hotspots are also
comparatively lower than that of other Asian rivals such as Singapore and Hong Kong, making it another attractive point for luxury
brands looking to expand into the country.
Italian luxury brand Bvlgari returned to Vietnam in February 2021 after leaving the market in 2019, the new store is located in
District One of Ho Chi Minh City. Duy Anh Fashion and Cosmetics, a Vietnam-based fashion distributor also brought Tiffany &
Co and Montblanc to the country, with stores opening in Hanoi and Ho Chi Minh City in 2021. The distributor also
brought footwear and accessories brand Christian Louboutin to Vietnam with the first store opening in January 2022 in Ho Chi
Minh City. GlobalLink, another distributor of luxury brands based in Vietnam, announced their intention to bring in growing brands
like Off-White, Ambush and Amiri to be sold in the company new 700sq m flagship store in Ho Chi Minh City by the end of 2022.
On the back of rising disposable incomes and favourable young adult demographics, fast-fashion retailers are also expanding into
the Vietnamese market. H&M opened its first store in Ha Noi in February 2017 and has since expanded rapidly. As of May 2022, the
company has 12 stores operating in Vietnam. Inditex has also entered Vietnam, with the first Zara store opening in July 2016 at
Vincom Center Dong Khoi, and other brands under the Inditex umbrella such as Massimo Dutti, Pull & Bear and Stradivarius all
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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33
Vietnam Consumer & Retail Report | Q3 2022
having a presence in the country. Fast Retailing's Uniqlo has acquired a 35% stake in Hanoi-based women’s fashion brand Elise.
Elise has more than 100 stores across the country. This follows Uniqlo's entry into the Vietnamese market via Ho Chi Minh City in
December 2019 and the company currently has 12 stores in the country, as of May 2022. Meanwhile, the first MUJI store in
Vietnam opened its doors to customers in November 2020 and currently has three stores as of May 2022, one in Ho Chi Minh City
and two in Hanoi.
SELECTED CLOTHING AND FOOTWEAR RETAILERS
Company
Parent/
Sub-Sector
Revenue
Employees Stores
Notes
State-owned
Jewellery
na
na
300-plus na
Blue Exchange
Fashion
na
7,000-plus
200-plus Plans to run 300 stores throughout
Ownership
Saigon
Jewellery
SJC
The Blues
Corp
Bossini
Bossini
Asia over the next five years.
Fashion
International
HKD1.1bn (Group revenue na
5
na
5
Zara, Pull & Bear, Massimo Dutti and
FY2020)
Holdings
Inditex
Inditex
Clothing and EUR20.4bn (Group
Footwear
na
revenue FY2020)
Hennes &
Hennes &
Clothing and SEK453mn
Mauritz
Mauritz AB
Footwear
Stradivarius.
na
9
na
(Vietnam revenue FY2020)
na = not available/applicable. Source: Companies, Fitch Solutions
Department Stores
As the one-stop shop concept in Vietnam gains popularity, the department stores segment has been seeing increasing
competition, especially as new entrants to the market started challenging well-established brands such as Parkson or Vincom.
UK-based retailer Marks & Spencer and Debenhams as well as Thailand-based Robins are present in the market, along with
Japan-based Aeon and South Korea-based Lotte.
We note stiff competition in the Vietnamese market. The Takashimiya department store in Vietnam, which opened in 2016, has
struggled since its entry. The company plans to boost sales by broadening its offerings of everyday items which it hopes will lead it
into profit in 2022. In 2020, departmental store Parkson quit operating full-scale stores in Vietnam after years of losses. On the other
hand, companies such as Aeon are expanding aggressively. As of May 2022, Aeon Mall is operating six projects in Vietnam, including
two malls in Hanoi’s Long Bien and Ha Dong districts. The company also announced in May 2022 that they plan to launch 16 more
shopping mall projects in Vietnam and to have 100 small- and medium-sized supermarkets by 2025. The company also has a longterm strategy of having another 30 shopping malls in the country by 2030.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
SELECTED DEPARTMENT STORES RETAILERS
Company
Parent/
Sub-Sector
Revenue
Employees
Stores
Notes
Department stores
na
550
4
2 more planned,
Ownership
AEON
AEON
Group
25 planned by
2025
Lotte
Lotte
Department stores
na
na
Department Shopping,
Store
Lotte
Parkson
The Lion
1, in
Parent company
Hanoi
based in South
Korea.
Department stores
na
na
1
Group
The
Company based
in Malaysia.
na
Mall in Ho Chi Minh City
na
na
1
na
na
Luxury department store in Ho Chi Minh City
na
na
1
na
Takashimaya na
Department Store
na
na
1
na
Vincom
Luxury shopping malls, under the Vincom and
na
na
30-plus One of the
Crescent
Mall
Diamond
Plaza
Vingroup
Retail
Vincom Mega Mall brands
largest retail
conglomerates
in Vietnam.
na = not available/applicable. Source: Companies, Fitch Solutions
Household Goods, Homeware And Home Improvement
Vietnamese households allocate some 5.7% of their annual retail expenditure to home spending, and we expect this figure to
remain stable through to the end of our forecast period. The sector is fragmented, with a large number of local and international
players present. In the furniture and furnishings segment, Sweden-based UMA, operating together with the local partners, is one of
the key retailers, with a 15-store network in the country. UMA was an early entrant to the emerging Vietnamese market, opening its
first store in the country back in 2006. Currently, UMA operates as a 50-50 joint venture between Vietnamese and Swedish partners.
The retailer offers a modern Western-style retail environment and Scandinavian-designed furniture in the budget-to-mid-range
price segment. It has a wide range of product selection, ranging from living room furniture to textiles and home accessories. The
company has been gradually expanding its store network and plans further openings in the near future.
Nha Xinh and Pho Xinh are domestic retailers offering higher-end furniture. In March 2022, Vietnam-based furniture manufacturer
Savimex opened a MOHO experience store in Vinhomes Grand Park in Thu Duc City. MOHO is the company's retail furniture brand
and the experience store aims to showcase the company's environment-friendly and international standard
wooden furniture products. US-based Ashley Furniture Homestore and Kingdown opened their first stores in December 2015
and January 2016 respectively as part of their expansion in the region. Danish furniture retailer BoConcept also has four stores in
Vietnam and has been operating in the country since 2010. Homewares and home improvement items can also be found in the
country's numerous shopping centres, such as Co.op Mart. Swedish furniture giant IKEA has announced its decision and the
company has plans to invest USD450mn on a retail centre and warehouse system in Hanoi. Once completed, the centre will be
IKEA's main supply hub for its Southeast Asian market.
In April 2016, Japanese lifestyle and fast-fashion retailer Miniso signed a franchise agreement with the Vietnamese group Le Bao
Minh. Miniso currently has 45 shops in the country as of May 2022, mainly in Ho Chi Minh City, Hanoi and central Nghe An province.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
The company previously had plans to have over 200 stores by the end of 2022 but plans may have been disrupted by the pandemic
and the economic downturn. Another household good retailer, Muji, has also opened its doors to customers in November 2020 and
currently has 3 stores in the country as of May 2022.
SELECTED HOUSEHOLD GOODS, HOMEWARE AND HOME IMPROVEMENT RETAILERS
Company
Parent/Ownership
Sub-Sector
Revenue Employees Stores
Notes
Nguyen Kim
90.5% owned by
Home appliances,
na
na
28
na
Central Group of
electronics
Thailand
Nha Xinh
na
Furniture
na
na
7
Vietnamese firm.
Mega Home
na
Furniture, homeware
na
na
5
na
na
na
40
Aims to have 400
and home appliances
Miniso
na
Lifestyle and
Homeware Retailer
BoConcept
na
Furniture and
stores by 2022
na
na
4
na
na
na
1 (Hanoi, opened
Ashley is US-
December 2015), 600
based.
homeware
Ashley
Run by licensee Duong Furniture, home
Furniture
Quoc Nam
accessories
Homestore
globally
na = not available/applicable. Source: Companies, Fitch Solutions
Electronics
Mobile World JSC is a clear leader in the electronics retail sector, operating more than 2,200 outlets across the country, under the
brand names The Gioi Di Dong, Electric Green and Bach Hoa Xanh. Other key participants in electronics retail include FPT Retail,
Vien Thong A and Viettel, each with 200-300 outlets as of late-2015. The rapid expansion of large electronics retail chains has
triggered numerous closures of small independent retailers in the segment.
In 2015, Thailand's retail conglomerate Central Group acquired a 49% stake in Vietnam-based electronics retailer Nguyen Kim,
which is currently (as of May 2022) running more than 50 electronics shopping centres in the country.
FPT Retail has been expanding its business beyond the traditional scope of electronics, seeing partnerships with other companies as
a long term strategy to remain competitive in the industry. In April 2022, FPT Retail began selling Xiaomi's IOT household
appliances. The company also opened the first Garmin Brand Store in the country in a partnership with Garmin. In December 2021,
FPT Retail signed a deal with MobiFone to see co-branded sim cards at FPT Shop nationwide. Customers who purchase the sim
cards will be eligible for additional discounts when shopping at FPT Shop.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
SELECTED ELECTRONICS RETAILERS
Company
Parent/Ownership
Sub-Sector
Revenue
Employees
Stores
Notes
The Gioi Di Dong Mobile World JSC
Mobile phones, laptops etc
na
na
1,744
na
Dien May
Mobile World JSC
Consumer electronics and home appliances
na
na
685
na
Home Center
VHC Trading Company
Electronics and home appliances
na
na
13
na
Media Mart
JSC Vietnam MediaMart
Electronics and home appliances
na
na
65
na
Pico
na
Electronics
na
na
22
na
na = not available/applicable. Source: Companies, Fitch Solutions
E-Commerce
Although Vietnam has one of the highest online-shopping penetration rates in Asia, it is one of the smallest e-commerce markets in
the region. At below 1% of total retail sales, the e-commerce market was valued at around USD5bn in 2022, up from USD2.9bn in
2018. A lack of a reliable integrated payment platform, poor logistics and delivery services conspire to keep confidence in businessto-consumer platforms in check. As in Thailand, consumers prefer to pay very small sums for goods purchased online, most often
through deals and flash sellers hosted on social media platforms such as Facebook and ZingMe. E-commerce in Vietnam is
predominantly dominated by Shopee and Lazada.
Singapore-based Shopee is the leading e-commerce site in Vietnam. Overall, the platform has the most web traffic and is also
particularly popular amongst younger consumers as they have one of the widest spectrum of product offerings and competitive
prices with discounts widely available. Trailing Shopee closely behind is Lazada, the second most popular e-commerce site in
Vietnam. Over the past few years, both Shopee and Lazada have grown into the most popular online marketplaces not only in
Vietnam, but also in other South East Asian markets, such as Indonesia, Malaysia, the Philippines, Singapore and Thailand.
Tiki, the country’s largest domestic e-commerce player, landed a USD 258 million investment from insurance firm AIA in
November 2021. In order to compete with Shopee and Lazada, Tiki has been embedding several mini apps, such as Infina (for
investing) and Ezin (insurance marketplace) into its platform to become a super app itself. Tiki also runs a fresh grocery delivery
service, TikiNgon, which has tracked a year-on-year growth of 2,000%. All these services have brought double-digit growth for Tiki
in the past two years and allow the company to be better poised to challenge the two giant foreign brands currently leading the ecommerce race in Vietnam.
Another domestic e-commerce player Sendo is fast becoming a key player in Vietnam's e-commerce segment. Selling clothing,
homeware, cosmetics, tech accessories and more, Sendo has acquired more than 20mn subscribers. By focusing on micro-, smalland medium-sized enterprises (MSMEs) and targeting tier-two cities, Sendo is attempting to crack Vietnam's e-commerce market.
US-based Amazon is the global leader of e-commerce and while the company does not operate directly in Vietnam, the company
still has a presence in the country. In January 2019, Vietnam’s Ministry of Trade signed a partnership with Amazon to help
Vietnamese merchants get on board the Amazon Global Selling network. The pact entitles access to the e-commerce giant’s
300mn-strong customer base and helps Vietnamese businesses reach wholesale buyers throughout the US, Japan and Europe.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
SELECTED E-COMMERCE RETAILERS
Company Parent/
Sub-Sector
Revenue Employees Stores Notes
Branded fashion
na
Ownership
Zalora
Central
na
na
Group
Lazada
Alibaba
Sold to Thailand's Central
Group in April 2016.
Fashion, electronics, health and beauty,
na
na
na
Active across South East Asia.
na
na
na
na
na
Around 90
na
na
babycare, sport etc
Sendo
FPT
Fashion, accessories, homeware, babycare,
beauty, electronics etc
Tiki.vn
Ti Ki
Electronics, fashion, accessories, books, etc
Corporation
na = not available/applicable. Source: Companies, Fitch Solutions
Drugstores And Pharmacies
The drugstores and pharmacies sector in Vietnam is highly fragmented, consisting of a large number of small independent players.
However, the situation has been gradually changing, as organised retail chains, such as Phano, Pharmacity, Guardian or
Medicare, have been rapidly expanding across the country. While Vietnamese regulations allow antibiotics to be sold only with a
doctor's prescription, the adherence to this requirement is poor and many pharmacies sell medicine without asking clients for
prescriptions.
Having entered Vietnam in September 2011, Guardian is one of the largest chains in the sector, running 56 outlets, which also
include licensed pharmacies. Guardian, which belongs to an Asian retail conglomerate Dairy Farm International, is a pioneer in
Vietnam in terms of representing modern Western-style retail outlets offering both health and beauty products. The retailer has
nearly doubled its number of branches over the past two years and is well positioned to capitalise on the growing demand for
health and beauty products, and medicine, especially in major urban areas.
Medicare is a rapidly growing retailer of health and beauty, and personal care products, focusing on the younger consumer
segment. The Malaysia-based company entered the Vietnamese market back in 2003. As of January 2021, it operates over 90
outlets, mostly located in large shopping centres.
Meanwhile, Pharmacity opened a total of six stores just in January 2017 and is planning a massive expansion by planning to operate
500 stores in 2023. The company plans to open their 1,000th store by end 2021 while strengthening its online presence to
presence in Vietnam. Watsons opened its first store in Ho Chi Minh in mid-January 2019, the store features some 6,000 SKUs,
including 700 of Watsons' own-label range.
In December 2019, Japanese drugstore chain Matsumoto Kiyoshi established a joint venture with local operator Lotus Food Group
and opened its first store in March 2020 in downtown Ho Chi Minh City. The company hopes to open 10 to 15 stores in the next five
years and expand to hundreds of outlets beyond that.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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38
Vietnam Consumer & Retail Report | Q3 2022
SELECTED DRUGSTORES AND PHARMACIES RETAILERS
Company
Parent/
Sub-Sector
Revenue
Employees Stores
Notes
Health, beauty, skincare products
na
na
Part of a pan-Asian
Ownership
Guardian
Dairy Farm
65
Group
Santedo
na
chain.
Pharmaceutical wholesaler and
na
na
na
na
na
na
109
Branches in Ho Chi
pharmacy chain
Pharmacity
na
Retail Drugstore Chain
Minh City, but has
plans to expand across
Vietnam.
Phano Pharmacy na
Retail Drugstore Chain
na
na
51
na
na = not available/applicable. Source: Companies, Fitch Solutions
Shopping Centres And Malls
The number of mall and shopping complex developments remains comparatively small, given the size of the potential consumer
market, and we expect strong growth in retail infrastructure to cater to growing demand. Among them is Aeon Vietnam which is
investing USD280mn for its third property in the capital city, Hanoi. The mall, in South Hanoi, opened in late 2020, and the company
plans to have 25 malls in Vietnam by 2025. It already has four trading, in Ho Chi Minh City, Hanoi and the southern province of Binh
Duong. Two others are under construction in Hanoi and the northern city of Hai Phong.
Vietnam's largest real estate company Vingroup operates a large and luxurious Vincom Centre, situated in Ho Chi Minh City. The
38,000sq m shopping centre was opened in 2012 and hosts a number of upscale brands, such as Louis Vuiton, Armani, Dior,
Hermès to mention just a few. Vincom Centre is spread out across two buildings and, in addition to the shopping area, features a
five-star hotel and various entertainment facilities. Vingroup is continuing to expand its presence with the company opening its
55th shopping mall, The Vincom Center Landmark 81 mall, in Ho Chi Minh City’s Binh Thanh district in July 2018. The 50,000sq m
shopping centre occupies six of the skyscraper’s 81 storeys, housing 100 domestic and international brands in cosmetics, clothing
and footwear, F&D, and entertainment.
In May 2022, Lotte Engineering and Construction announced it will partner with Ho Chi Minh City for the Thu Thiem Eco City
project, building a large leisure and residential complex in the city. The complex will be built on a 50,000 square meter (538,195
square feet) area and consist of a shopping mall, hotel, office building and apartment building. Construction is expected to
commence in 2023.
In January 2021, T&T Group commenced its construction of VND645bn Dak Mil Trade Center, which will cover more than 7,500
square meters in Dak Mil Town of the namesake district. The project will include a commercial center, shopping mall, event area,
along with cinemas, restaurants, cafes, gyms and hotels, and is expected to enter operation in the third quarter of 2022.
In July 2021, luxury European outlet mall chain Florentia Village announced its plan to open its first property in Vietnam in 2022,
as part of the company's Southeast Asian expansion plan. A spokesperson for the firm said that the company chose Vietnam due to
the country's 'growing number of young customers interested in Western brands'.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Consumer & Retail Glossary
Fitch Solutions' household spending data is based on the UN Classification of individual consumption by purpose (COICOP), which is
a classification system used to define consumption expenditures incurred by households. This lists various categories and subcategories defining the different categories of items on which households spend, and is the preferred model used in household
expenditure surveys carried out by national statistics agencies from which Fitch Solutions’ household spending data is sourced.
Where spending data is not readily allocated into the COICOP format, Fitch Solutions applies a rigorous and logical approach in
allocating data to align with these categories, and if needed, apply aggregation methods or other techniques to achieve category
level data.
Fitch Solutions' spending data defines spending in terms of three different types of consumer units: individuals (given as per capita),
households and total economy.
• Household - is defined as a group of people living in the same residential unit. The number of households and average persons
per household is sourced from national statistics. Where this data is unavailable, Fitch Solutions uses alternative best sources for
the data, and where needed use best practice techniques to make an estimate. Households exclude institutionalised individuals,
such as those in hospitals and military, religious and other institutions. Where national statistics include it, Fitch Solutions uses
the relevant best practice to amend the data in order to keep all countries similar with respects to their definition.
• Per household spending - is defined as spending by each household unit.
• Per capita spending - is defined as spending by each individual person.
Below are definitions to the different indicators covered in our consumer & retail publications. For more details on what is included
in each of the categories, please review: 'UN - detailed structure and explanatory notes', http://unstats.un.org/unsd/cr/registry/
regcst.asp?Cl=5&Lg=1
Food and non-alcoholic drinks spending - refers to the sum of food spending and non-alcoholic food spending. Details of what
is included in these categories are given below.
Food spending - refers to the sum of spending on the following food items:
01.1.1 - Bread and cereals
01.1.2 - Meat
01.1.3 - Fish and seafood
01.1.4 - Milk, cheese and eggs
01.1.5 - Oils and fats
01.1.6 - Fruit
01.1.7 - Vegetables
01.1.8 - Sugar, jam, honey, chocolate and confectionery
01.1.9 - Food products, other.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Note that this refers to spending on food for home consumption and excludes food spending for consumption outside the home.
Non-alcoholic drinks spending - refers to the sum of spending on the following types of drinks:
01.2.1 - Coffee, tea and cocoa
01.2.2 - Mineral waters, soft drinks, fruit and vegetable juices
Note that this refers to spending on drinks for home consumption, and excludes spending for consumption outside the home.
Alcoholic drinks and tobacco spending - refers to the sum of spending on the following items/services:
Alcoholic drinks spending - refers to the sum of spending on the following items:
02.1.1 - Spirits
02.1.2 - Wine
02.1.3 - Beer
Tobacco spending - refers to spending on the following tobacco products: cigarettes; cigarette tobacco and cigarette papers;
cigars, pipe tobacco, chewing tobacco or snuff. Excludes other smokers' articles.
Clothing and footwear spending - refers to the sum of spending on the following items/services:
Clothing spending - refers to the sum of spending on the following clothing items:
03.1.1 - Clothing materials
03.1.2 - Garments
03.1.3 - Other articles of clothing and clothing accessories
03.1.4 - Cleaning, repair and hire of clothing
Footwear, including repair, spending - refers to the sum of spending on the following items:
03.2.1 - Shoes and other footwear
03.2.2 - Repair and hire of footwear
Housing and utilities spending - refers to the sum of spending on the following items:
04.1 - Actual rentals for housing
04.2 - Imputed rentals for housing
04.3 - Maintenance and repair of the dwelling
04.4 - Water supply and miscellaneous services relating to the dwelling
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
04.5 - Electricity, gas and other fuels
Furnishing and home spending - refers to the sum of spending on the following items/services:
Furniture and furnishings spending - refers to spending on the following items:
05.1.1 - Furniture and furnishings
05.1.2 - Carpets and other floor coverings
05.1.3 - Repair of furniture, furnishings and floor coverings
Household textiles - refers to the sum of spending on the following items:
05.2.0 - Household textiles which includes items such as fabrics, bedding, linen, kitchen and bathroom linen, cloths and towels.
Household appliances - refers to the sum of spending on the following items:
05.3.1 - Major household appliances, whether electric or not
05.3.2 - Small electric household appliances
05.3.3 - Repair of household appliances
Glass, tableware and utensils - refers to the sum of spending on the following items:
05.4.0 - Glassware, tableware and household utensils which includes items such as cutlery, flatware, silverware, kitchen utensils,
pans, non-electric household containers, waste bins etc.
Home and garden tools/equipment spending - refers to the sum of spending on the following items:
05.5.1 - Major tools and equipment
05.5.2 - Small tools and miscellaneous accessories
Goods and services for routine household maintenance - refers to the sum of spending on the following items:
05.6.1 - Non-durable household goods
05.6.2 - Domestic services and household services
Health spending - refers to the sum of spending on the following items/services:
06.1 - Medical products, appliances and equipment
06.2 - Outpatient services
06.3 - Hospital services
Transport spending - refers to the sum of spending on the following items/services:
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
07.1 - Purchase of vehicles
07.2 - Operation of personal transport equipment
07.3 - Transport services
Communications spending - refers to the sum of spending on the following items/services:
08.1 - Postal services
08.2 - Telephone and telefax equipment
08.3 - Telephone and telefax services
Recreation and culture spending - refers to the sum of spending on the following items/services:
09.1 - AV, camera and computer - refers to the sum of spending on the following items: AV equipment spending, including
television, radio and CD players; cameras and video cameras, including sound recording equipment; computers spending, including
all types of personal computers, software and peripherals; recorded media, including recordable CDs, cassette and recording films;
AV, camera and computer repairs
09. 2 - Other major durables for recreation and culture
09.3 - Toys, sports, gardens and pets - refers to the sum of spending on the following items: games, toys and hobbies spending,
including items such as card, board, electronic games and hobbies, eg stamp collecting and video games; sport and camping
equipment, including items such as sports equipment, and game specific footwear; gardens, plants and flowers, including artificial
flowers, pots and pot holders; pet food/products and vet fees, including all pet related accessories.
09.4 - Recreational and cultural services
09.5 - Newspapers, books and stationery
09.6 Education spending - refers to the sum of spending on the following items/services:
10.1 - Pre-primary and primary education
10.2 - Secondary education
10.3 - Post-secondary non-tertiary education
10.4 - Tertiary education
10.5 - Education not definable by level
For more details on what is included in each of the above categories, please review 'UN - detailed structure and explanatory notes'.
Restaurants and hotels spending - refers to the sum of spending on the following items/services:
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
11.1 - Catering services
11.2 - Accommodation services
Insurance and Financial Services spending – refers to the sum of spending on the following items/services:
12.1 – Insurance
12.2 – Financial Services
Personal, Social Protection and Miscellaneous Goods & Services spending - refers to the sum of spending on the
following items
Personal care and effects spending - refers to the sum of spending on the following items:
13.1 - Personal care products spending - includes spending on hairdressing/personal grooming, small electric appliances for
personal care, toiletries and other similar products.
13.2- Personal effects products spending - refers to the sum of spending on the following items:
12.3.1 - Jewellery, clocks and watches
12.3.2 - Other personal effects
13.3 – Social Protection - Social protection as defined here covers non-medical assistance and support services provided to
persons who are: elderly, disabled, having occupational injuries and diseases, survivors, unemployed, destitute, homeless, lowincome earners, indigenous people, immigrants, refugees, alcohol and substance abusers, etc. 13.9 - Other spending - which
includes fees for legal services, funeral and undertaker services, fees for birth and marriage certificates and other similar services etc.
Household goods (Fitch Solutions only category/Fitch Solutions calculation) - the sum of spending on furniture and
furnishings, household textiles and appliances, glass, tableware and utensils, home and garden tools and equipment, AV, cameras
and computers, toys, sports, gardens and pets.
Income Definitions
Gross income - refers to income received before tax and deductions.
Net income - refers to income received less any income taxes and social contributions.
Tax and social contributions, % of gross income - refers to tax plus social contribution rate as percentage of total gross
income.
Consumer & Retail Methodology
Connected Thinking
We use a simple and transparent forecasting model as a base for our industry forecasts, but rely heavily on our analysts' expert
judgement to ensure our forecasts capture all of the insights we derive using our unique Connected Thinking approach. We believe
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
analyst expertise and judgement are the best ways to provide the most accurate, up-to-date and comprehensive insight to our
customers.
Our Connected Thinking approach to forecasting and analysis integrates macroeconomic variables from Fitch Solutions Country
Risk to provide our customers with unique and valuable insight on all relevant macroeconomic, political and industry risk factors
that will impact their operations and revenue-generating potential in the industry/industries they operate in.
Consumer & Retail Methodology
For the Consumer & Retail industry we have historical data and five-year forecasts for 60 market-level indicators including total
household spending by category and income stratification.
We look at the consumer & retail space from a household spending perspective.
We source our data primarily from household surveys, which are published by national statistics agencies.
Our forecasts are a combination of regression modelling and analyst expert judgement.
Our Consumer analysts interact with other analytical teams in Fitch Solutions, including Country Risk, Oil & Gas, Autos, TMT,
Agribusiness and Operational Risk. This is to ensure the analysts have a comprehensive understanding of external factors that may
affect the consumer & retail industry outlook either on a market or regional level.
There is a constant rolling cycle of data monitoring, with databases being updated on a quarterly basis. Analysts will intervene
outside of these cycles to implement forecast changes when necessary.
Industry-Specific Methodology
Our Consumer & Retail forecasts are based on a regression model, using a market's own historical time series and key
macroeconomic explanatory variables from Fitch Solutions Country Risk service, mainly private final consumption. In addition, we
also apply analyst expert judgement to refine and finalise the household spending forecast based on exogenous and endogenous
variables or events, not captured by our regression model. During periods of 'industry shock', for example a deep recession, dummy
variables are used to determine the level of impact.
In the Consumer & Retail forecasts, analyst expert judgement might include, but is not exclusive to, business environment changes,
changes in consumer trends, the introduction of new technology and regulatory changes.
The Consumer & Retail industry data can be divided into the following main categories: total household spending by categories,
household income levels and demographics.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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Vietnam Consumer & Retail Report | Q3 2022
Total Household Spending
Total household spending across the main categories of consumer spending, as defined by the UN Classification of Individual
Consumption by Purpose (COICOP).
Where spending data is not readily allocated into the COICOP format, Fitch Solutions applies a rigorous and logical approach in
allocating data to align with these categories, and if needed, applies aggregation methods or other techniques to achieve category
level data.
We source our historical data primarily from national statistics agencies, complemented by data from the UN, World Bank and other
multilateral sources.
The main categories for household spending forecasts are:
•
•
•
•
•
•
•
•
•
•
•
•
•
Food and non-alcoholic drinks
Alcoholic drinks and tobacco
Clothing and footwear
Housing and utilities
Furnishing and household goods
Health
Transport
Communications
Recreation and culture
Education
Restaurants and hotels
Insurance and financial services
Personal care, social protection and miscellaneous goods & services
These main categories can then be divided into the following sub-categories:
Food and non-alcoholic drinks
• Food
• Non-alcoholic drinks
(Fitch Solutions Food & Drink service provides breakdown data and forecasts for all food and non-alcoholic drinks categories)
Alcoholic drinks and tobacco
• Alcoholic drinks spending
• Tobacco
(Fitch Solutions Food & Drink service provides breakdown data and forecasts for all alcoholic drinks categories)
Clothing and footwear
• Clothing
• Footwear, including repair
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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46
Vietnam Consumer & Retail Report | Q3 2022
Furnishing and home, and recreation and culture
•
•
•
•
•
•
•
•
Household goods spending
Furniture and furnishings
Household textiles
Household appliances
Glass, tableware and utensils
Home and garden tools/equipment
AV, camera and computer
Toys, sports, gardens and pets
Household Income
Household income includes indicators such as net/gross income per household/capita and number of households earning within
different income brackets. This gives an overview of the purchasing power of households. We source our historical data from
national statistics agencies, however, where these are not available, we source the data from international organisations like the UN
and World Bank.
Demographics
Demographics covers the different types of consumers by age group, sex and urban/rural population. This is important in
highlighting the different consumer groups and the size of each group. Demographic data and forecasts are taken from the UN
population statistics.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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