Retail & Consumer Goods

Introduction

It is undeniable that Vietnam has emerged as a regional economic powerhouse over the previous 10 years. Possessing a stable government and legal system, a young, digitally-fluent workforce, improving infrastructure, government investment incentives, membership in numerous international trade agreements, and an emerging affluent middle class, the country has seen steady growth in the retail and consumer goods sector. With a pre-pandemic yearly increase of 6-7%, the country more than doubled its GDP and purchasing power between 2010 and 2018. In 2017, retail sales of consumer goods and services reached VNĐ 393.4 trillion, increasing by 10.9 percent. Retail sales of goods accounted for 74.7 percent of this total, while accommodation, catering, and services accounted for the remainder.

These upward trends were temporarily reversed due to the Covid-19 pandemic. A strict lockdown, lasting approximately 5 months, was imposed on the financial hub of the country, Ho Chi Minh City, and the Southern Provinces in mid-2021. Coupled with rising transportation costs and supply chain delays, the lockdown resulted in widespread declines in the sale of consumer goods. In August, 2021 alone, total retail sales of goods and services plummeted 34 per cent year-on-year and 10.5 per cent month-on-month to VNĐ 279.8 trillion.

Nevertheless, the overall retail profile for Vietnam remains fundamentally strong and there have been recent signs of recovery. Retail sales in Vietnam increased by 1.1 percent from a year earlier in December 2021, reversing a 12.2 percent slump in the previous month (and exhibiting the first rise since April, 2021). Barring any further setbacks, retail sales are expected to increase in the long-term by approximately 5 percent over the course of 2022. Further, e-commerce in Vietnam is expected to skyrocket and by 2025 the country’s online market is projected to be second only to Indonesia in the Southeast Asia region. Developments in modern trade channels in the larger cities, such as supermarkets, convenience stores, and shopping malls, also continue to flourish.

About

Successful retail and consumer product companies in Vietnam and around the World consistently evolve and adapt to the fluctuating demands of consumers. In addition, in order to achieve their business objectives and remain profitable, companies in the retail sector carefully watch the competition as well as keep abreast of the latest technological developments (such as new production models and e-commerce). Another challenge for the retail and consumer goods industry, especially in an emerging economy such as Vietnam, includes the constantly shifting regulatory and compliance framework. All of this requires vigilant monitoring and navigation of a wide range of industry developments and it is critical for your business to retain a proficient and experienced legal partner.

With over a decade of in-depth experience in the retail and consumer goods industry, Corporate Counsels will assist your business in every stage of its development. Whether establishing a retail presence in the country or expanding your existing business lines, our team of multidisciplinary attorneys offer guidance on a wide array of issues including corporate formation and collaborative relationships, licensing and franchising, commercial contracts, consumer protection and anti-competition laws, warranties and potential liabilities, labor and employment, taxation, industrial development and real estate, intellectual property, and many others. The clients of Corporate Counsels trust our fundamental knowledge and understanding of the rapidly changing retail and consumer goods environment and the challenges faced by the industry. We answer your questions and concerns while diligently working to ensure that your business strictly follows all legal requirements, enabling you to achieve your business goals.