If the Vietnamese economy is able to successfully enjoy a rapid economic recovery following the conclusion of the novel coronavirus (COVID-19) pandemic, the retail industry will be one of the driving factors in this revival process
International organizations have a generally optimistic view on the resilience of Vietnam's economy.
According to the "World Economic Prospects 2020 Report" of the International Monetary Fund released on April 14, the country has the best growth prospects in ASEAN, while its economy is expected to rapidly recover to grow at 7% by 2021.
Following on from this positive view, the World Bank’s macroeconomic update on Vietnam in May noted that the nation’s economy may recover following the relaxing of a range of social distancing measures from April 23.
Experts forecast there will be a positive national economic recovery after the COVID-19, with retail set to play an extremely important role, although this remains one of the most sensitive industries that has suffered some of the heaviest losses during the lockdown period as a result of the epidemic.
Vu Thi Hau, President of Vietnam Retailers Association, noted that the retail industry has adapted well to social change while enjoying a faster recovery speed than other industries due to the availability of products.
Moreover, there are also prospects to open up establishments after the epidemic such as retaining the support of foreign investors, adapting to changing consumer shopping habits, and consuming products from local producers, especially with regard to essential goods.
Economist Nguyen Minh Phong stated that, with the influence of the COVID-19, the local retail market has maintained its performance as one of the leading potential markets regionally.
A huge advantage comes from the nation being blessed with a young consumer demographic under the age of 30, which ultimately accounts for two-thirds of the population, the majority of whom are easy to connect with through internet platforms. In addition, the average person’s income is seeing an upward trajectory, with approximately 1 million people each month moving into the Vietnamese middle class based on their economic situation.
Most notably, the lifestyle of local people and their habits of using fresh food, enjoying cultural exchanges, and hobby of buying goods directly, will also positively affect the market as soon as they are able to adapt to a new normal. These are factors that will bring stable development to the Vietnamese retail market, Phong noted.
According to economic experts, the retail market is currently enjoying advantages as a result of a wide range of incentive policies and stimulus packages launched by the Government, such as the VND180,000 billion package aimed at supporting enterprises and the VND62,000 billion package launched support people facing economic difficulties. Furthermore, schemes have been initiated to reduce electricity prices and lower interest rates to save domestic businesses.
Along with production activities, the bustle of retail is considered to be a mirror that reflects the overall growth of the economy. Therefore, economist Nguyen Minh Phong further analysed that the Government's support packages, deciding whether directly or indirectly they work well when helping to maintain the solvable aggregate demand of society.
“When being supported, enterprises will reduce costs, prices, thus helping to stimulate consumption. This can be seen simultaneously when production recovers, people's income will also increase, which indirectly promotes the development of the retail market,” Phong concluded.