Domestic market drives growth in production and business

With a population of more than 100 million and rapidly improving living standards, Vietnam’s domestic market has experienced strong growth in recent years. This has created significant opportunities for enterprises, particularly those operating in the production and distribution of consumer goods.

Mechanical and manufacturing products of Tuong Lai Co., Ltd. (Long Thanh commune) are showcased during business networking activities with enterprises from Ho Chi Minh City. Photo: Vuong The

Focusing on the domestic market while improving product quality is also considered an effective solution for enterprises to compete more strongly against imported goods in the home market, strengthen Vietnamese brands, and contribute to the country’s high economic growth targets.

Market scale continues to expand

According to the Vietnam Domestic Market Report 2025 released by the Agency for Domestic Market Management and Development under the Ministry of Industry and Trade, in 2025, a wide range of policies encouraging investment, supporting private-sector development, and promoting innovation and digital transformation were issued and vigorously implemented. These policies have had a significant impact on Vietnam’s goods market, creating new momentum, driving the growth of the retail sector, and upgrading the quality of commercial infrastructure and logistics. New economic policies and development orientations, along with changes in mechanisms and the organization of administrative management apparatus from the central to localities, are expected to open up fresh opportunities for Vietnam’s economy as a whole, and for the retail sector as well as supporting distribution and logistics services in particular, in the coming years.

As a result, Vietnam’s retail market size has reached an estimated USD 269 billion, with goods retail accounting for approximately USD 205 billion. Total retail sales of goods and services nationwide in 2025 exceeded VND 7 quadrillion, representing an increase of about 10% compared with 2024. This indicates that domestic purchasing power continues to maintain a solid foundation.

Within the retail goods sector, in a middle-income country like Vietnam, although per-capita income has been rising in line with annual economic growth and spending on services has gradually increased, in reality, given current living standards, expenditure on essential goods for daily life still accounts for a large proportion. These include food and foodstuffs, fuel, household items, and household equipment, followed by spending on fashion, construction materials, interior furnishings, and cultural and educational products.

In Dong Nai province, trade and service activities recorded positive growth in 2025, while prices of essential goods remained largely stable. According to data from the Dong Nai Statistics Office, total retail sales of goods and service revenues in the province reached VND 465.8 trillion in 2025, up 18.6% year-on-year; of this figure, goods retail alone accounted for more than VND 335 trillion. The industry and trade sector stepped up trade promotion efforts by organizing Vietnamese goods fairs and effectively implementing the campaign Vietnamese People Prioritize Vietnamese Goods. These efforts were combined with promotional and consumption stimulus programs during holidays and the Lunar New Year, contributing to the growth of the service sector and making an important contribution to the province’s overall economic performance.

For 2026, the Agency for Domestic Market Management and Development has set a target for nationwide retail sales of goods and service revenues to reach approximately VND 7.8 quadrillion, an increase of about 11% compared with 2025. At the same time, efforts will continue to focus on stabilizing the market and promoting domestic consumption in a safe, modern, and sustainable manner.

Enterprises focus on tapping domestic demand

For manufacturing and consumer enterprises, particularly small and medium-sized ones, the domestic market is regarded as the backbone of production and business plans. Building a strong presence in the domestic market enables enterprises to establish their brands and gradually expand into international markets.

Phuoc Hung Mechanical Co., Ltd. (Long Binh ward, Dong Nai province) supplies mechanical products such as TV brackets, refrigerator stands, and air-conditioner mounts. These products are currently being oriented more toward the domestic retail market, helping the company reduce its reliance on exports for other product lines.

According to Nguyen La Anh Dao, Director of the company, Phuoc Hung aims to cooperate with manufacturers and electronics retail centers, as rising demand for air conditioners creates more favorable conditions for the consumption of related mechanical products.

Similarly, Le Thanh Cong, Director of Mr Cong Raw Coffee Import–Export Trading and Services Co., Ltd. (Long Khanh ward, Dong Nai province), said that: In recent times, the company has made sustained efforts to promote its products across regions nationwide. According to Cong, the company has been able to produce high-quality coffee products; however, as the brand is still relatively new, its market reach remains limited. Therefore, over the past period, the company has actively participated in trade promotion programs organized by the locality and the industry, which have begun to deliver encouraging initial results.

According to experts, a key issue that businesses need to take into account is that, despite strong growth, the domestic market also faces significant challenges. Intense competitive pressure arising from tariff reductions has enabled goods from countries participating in free trade agreements (FTAs) to enter the Vietnamese market more easily. These products often enjoy advantages in terms of quality, design, and branding. This situation creates direct competitive pressure on domestic manufacturers, particularly in sectors such as processed foods, beverages, textiles and garments, leather and footwear, and automobiles. Without adequate preparation and well-defined business strategies, domestic enterprises risk losing market share even in their home market. This, in turn, requires local businesses to study, understand, and comply with increasingly complex regulations related to rules of origin, technical standards, and other requirements.

By Vuong The - Translated by Thu Hien, Thu Ha