Building a foundation for consumption

According to the General Statistics Office, total retail sales and consumer service revenue in January was estimated at 573.3 trillion VND, up 2.7% from the previous month and 9.5% from a year earlier. High domestic consumption demand during the Lunar New Year holiday, along with the strong recovery of tourism, has contributed positively to the growth of the trade and service sector.

Not meeting expectations

Bui Phuong Thanh (Cau Giay District, Hanoi) shared that although both her and her husband's incomes have been better this year than last, they still have not returned to pre-pandemic levels, while prices continue to rise. Therefore, her family only purchased essential items, especially those with deep discounts and bundled gifts at supermarkets.

According to Phan Thanh Chi (Ba Dinh District, Hanoi), instead of travelling as they did in previous years, her family decided to stay home after Tet to reduce expenses. "Even during the recent Tet holiday, my family only bought essential goods and only purchased them for the three days of Tet rather than stockpiling."

From the perspective of retailers, Nguyen Minh Tuan, Director of GO! Thang Long Supermarket, noted that consumer purchasing power has been maintaining its growth momentum but at a low level. Notably, shopping baskets focus on fresh products, vegetables, meat, fish and other essentials such as milk, eggs, and dry goods. Meanwhile, household appliances, electronics, and fashion items have seen a decrease compared to the same period last year. This is an inevitable trend as people tighten their spending.

According to a report issued by securities company VNDirect, in January 2025, macroeconomic trends have created a foundation for increased consumer spending, however, consumer sentiment remains cautious. This is due to limited recovery in consumer income after the pandemic, leading to slow recovery in consumer demand in 2024.

Meanwhile, the employment index in the industrial sector declined for the third consecutive month in December 2024, directly affecting people's income and consumer demand. Consumer and retail businesses recorded positive results mainly due to the low baseline from 2023.

Gradual recovery expected

However, analysts from VNDirect also point out several positive indicators that have become apparent, such as improved consumer confidence and increased saving capacity, creating a foundation for clearer consumer demand recovery in 2025.

Total retail sales and consumer service revenue is expected to increase by approximately 10-10.5% in 2025 (higher than the 9% figure for 2024) thanks to job market recovery and improved real income due to expanded economic growth, cooling of inflation, and expectations of accelerated public investment in 2025 helping to improve domestic demand.

According to Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy, to stimulate consumption, the government needs to continue supporting businesses through fiscal policy, taxes, fees and monetary policies such as credit policies and interest rate reductions. "More importantly, it's about rebuilding market confidence through overall economic recovery, alongside resolving monetary issues and stabilising the macroeconomy so that consumers see a brighter future and are willing to spend more," he stressed.

In addition to direct sales channels, e-commerce is also a solution recommended by many experts. Vu Thi Hien, Director of Digital Finance Division at Sapo Technology, believes that although 2025 will still be a challenging year, it also opens many opportunities for the retail industry in Vietnam.

Surveys show 59% of sellers are very optimistic about the business situation in 2025, with many wanting to expand their business rather than cut costs; 46% want to add more sales channels; 45.8% plan to diversify products; and 30.8% want to expand their scale, add branches and staff. In particular, expanding sales channels is the core strategy for 2025, including social networks (28%), e-commerce platforms (23%), and TikTok Shop (21%).

For its part, the Ministry of Industry and Trade will focus on implementing institutional and policy development, which is one of three strategic breakthroughs. The ministry will strengthen inspection and supervision to create a synchronised and effective legal corridor. Meanwhile, it will continue to promote domestic trade development to effectively exploit the domestic market; and expand and diversify export markets, products, supply chains, and production chains.