Vietnam’s Consumer Market Has Entered a New Era
For many years, Vietnam was primarily viewed as one of Asia’s leading manufacturing destinations. International investors were attracted by its competitive workforce, expanding export sector and strategic location within global supply chains.
That perception, however, is no longer complete.
Vietnam is rapidly evolving into one of Southeast Asia’s most promising consumer markets. Rising household incomes, accelerating urbanisation, a young population, increasing health awareness and a growing middle class are fundamentally changing purchasing behaviour. Consumers are increasingly seeking high-quality, safe and trusted international products while demonstrating a greater willingness to pay for quality, reliability and brand reputation.
This transformation raises an interesting strategic question for European retailers:
Which German retail concepts are best positioned to benefit from Vietnam’s next stage of economic development?
A Remarkable Observation
Having lived and worked in Vietnam for almost three decades, I have had the opportunity to observe the country’s extraordinary economic transformation firsthand.
During frequent travel between Germany and Vietnam, one recurring observation has stood out.
Many Vietnamese travellers intentionally purchase German consumer products during visits to Germany. Personal care products, cosmetics, baby products, dietary supplements, household products and organic food regularly find their way back to Vietnam through personal purchases, family networks and independent resellers.
Among German retailers, one company appears particularly well represented in these purchasing patterns:
dm-drogerie markt.
This is, of course, an observation from many years of practical experience rather than the result of a formal market survey. Nevertheless, it reflects a broader trend that deserves attention.
The continued demand for German drugstore products suggests that Vietnamese consumers place considerable trust in German quality, particularly in product categories directly connected with health, beauty, personal care and family wellbeing.
Why the dm Business Model Deserves Attention
dm is much more than a traditional drugstore.
Its business model combines personal care, health products, baby care, natural cosmetics, organic food, dietary supplements, household products and attractive private-label brands within a customer-focused retail concept.
This combination aligns closely with several long-term consumer trends currently visible in Vietnam:
- increasing health consciousness;
- growing interest in premium personal care products;
- expanding demand for baby and family products;
- greater appreciation of sustainable and natural products;
- rising interest in organic food;
- strong confidence in European quality standards.
Importantly, these trends are structural rather than temporary.
The EVFTA Creates Additional Momentum
The EU–Vietnam Free Trade Agreement (EVFTA) has significantly strengthened the commercial framework for trade between the European Union and Vietnam.
As tariff reductions continue to take effect, many qualifying EU-origin products benefit from improved market access conditions. While Vietnamese regulatory requirements, product registration, labelling rules and import procedures continue to apply, the EVFTA improves the commercial attractiveness of the Vietnamese market for European businesses.
For retailers offering products manufactured within the European Union and meeting the applicable rules of origin, the agreement can create meaningful competitive advantages over time.
A Market Opportunity Worth Evaluating
Vietnam already hosts a dynamic retail sector with strong domestic and international participants.
However, the specific retail concept developed by dm — combining affordable quality, trusted private labels, health and beauty products, baby care, organic food and sustainability under one roof — appears to have limited direct equivalents in today’s Vietnamese market.
Whether this represents a first-mover opportunity is ultimately a commercial question for retailers themselves.
What is clear, however, is that Vietnam’s consumer market is becoming increasingly sophisticated, and demand for trusted international brands continues to grow.
Looking Beyond Manufacturing
For many years, German business discussions about Vietnam focused primarily on manufacturing, industrial investment and exports.
The coming decade may increasingly be defined by another story:
Vietnam’s rise as one of Asia’s most attractive consumer markets.
Retailers able to recognise this transition early may find opportunities that extend well beyond traditional export models.
As Vietnam continues its remarkable economic journey, it may be time for German retailers to ask a simple but important question:
Is Vietnam ready for the next generation of German retail concepts?
The answer may prove to be one of the most interesting business opportunities of the coming decade.
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Dr. Oliver Massmann is Partner and General Director of Duane Morris Vietnam LLC. Having advised international investors in Vietnam for nearly three decades, he regularly writes on foreign investment, international trade, regulatory developments and strategic market-entry opportunities in Vietnam.
