Recent geopolitical developments in the Middle East and the rise in global oil prices have introduced short-term volatility across emerging markets, including Vietnam. We have seen this reflected in recent stock market movements as investors reassess risk in light of global uncertainty. In our view, though, amid the oil price crisis, Vietnam is relatively well positioned compared to many regional peers. The country’s domestic crude production supplies roughly 50% of refinery input, while local refineries account for around 70% of total fuel demand.
Even as investor sentiment fluctuates in the near term, we do not see a structural change in Vietnam’s domestic growth trajectory, based on our discussions at Vietnam Access Days (VAD) 2026 and ongoing observations on the ground. We expect the country’s consumer sector to remain supported by strong underlying fundamentals, such as rising income, more transparent policies, and accelerating infrastructure development.
This article is the fourth in our short series summarizing our observations from the event, following up on our stock market outlook. Below, we highlight key takeaways from the VAD discussions – shared by Cimigo’s Richard Burrage and Vietcap’s Research team – as well as our own perspective on the resilient growth of Vietnam’s consumer market despite external volatility.
Vietnam has reached an important stage in its consumption cycle. According to Burrage, approximately 59% of households now have discretionary income, representing around 60 million people. This is reflected in higher spending across education, financial assets, and lifestyle categories.
At the same time, we observe that consumer behavior has become more measured. Despite positive retail sales growth, real purchasing power is affected by higher perceived inflation at the household level. As a result, consumers are more selective, prioritizing essential goods and value, while delaying higher-value discretionary purchases.
We believe this reflects a fresh mindset post-COVID. Consumers are saving more, planning spending more carefully, and focusing on long-term financial stability. In our view, this shift favors companies that offer a clear value proposition, operational efficiency, and – most importantly – consistent product quality.
Vietnam’s consumption growth over the past decade has been closely linked to its demographic structure. The country continues to benefit from a large working-age population, with around 62% of citizens in employment age and nearly half concentrated in the 22–39 cohort. According to Cimigo, high female labor participation has also played a significant role in supporting household income and consumption.
At the same time, this demographic advantage is gradually peaking. Birth rates have declined below replacement levels in several regions, and the proportion of the population above 50 is expected to increase significantly over the next ten years – but this isn’t a bad sign. In fact, we view this as a transition in demand patterns. An aging population is expected to drive demand toward healthcare, convenience services, and leisure spending, while younger consumers continue to support demand for technology, branded goods, and digital services. This broadens the consumption base and creates new areas of growth.
Such divergent trends directly benefit different positions within our portfolio, notably Mobile World Corporation (MWG), FPT Retail (FRT), and Thai Nguyen Hospital Group (TNH). Firstly, as younger consumers take the lead and incomes rise, spending is expanding beyond essential products into comfort and convenience categories. For example, in addition to core appliances such as refrigerators, washing machines, and televisions, demand is increasing for products like dishwashers, air purifiers, and home security devices. Such a shift raises both average selling prices and product penetration, thereby lifting the overall size of the ICT and consumer electronics market, which we expect to grow from USD 10 billion in 2025 to USD 15 billion by 2030.
Leading modern retailers such as Dien May Xanh (or DMX, a subsidiary of MWG) and FPT Shop (a subsidiary of FRT) are direct beneficiaries of this trend, given their scale, product range, and ability to capture evolving demand. This underpins our expectation of sustained earnings growth over the next three years, at around 11% for DMX and 41% for FPT Shop, supporting the broader growth outlook of their respective parent companies.
On the other hand, demographic shifts are driving a structural increase in healthcare demand. Vietnam’s aging population is leading to a higher incidence of chronic diseases, which in turn raises demand for more specialized medical treatments. Within our portfolio, TNH’s private hospital network is well-positioned to benefit, with four operating facilities across different regions and another expected to come online this year.
TNH has also been upgrading its service offering. In recent years, the hospital chain has expanded into higher-value treatments, including surgery and procedures related to orthopedics, cardiovascular care, and gastroenterology. These services carry a higher average revenue per patient and support margin expansion over time, compared to basic primary care. While cost pressures have weighed on performance in the first half of the year, the underlying drivers remain intact. As utilization improves and management execution strengthens, we expect the company to return to profitability from H2/2026 and deliver more sustainable growth thereafter.
A key structural theme from VAD is the rapid transformation of Vietnam’s retail landscape. Traditional retail has declined over time, while modern trade and e-commerce continue to expand. Vietnam has moved quickly toward a digital-first consumer environment, supported by widespread smartphone adoption and mobile payments.
At the same time, regulatory changes are accelerating formalization, increase transparency and raise operating standards across the market:
Tighter tax enforcement and e-invoicing requirements for household businesses
Crackdowns on undocumented and counterfeit goods – including various food hygiene campaigns
Stronger product safety and compliance standards in many sectors, such as pharmaceuticals
In the near term, this transition creates pressure on informal businesses and parts of the consumer base. Over time, we expect it to strengthen the overall market structure, with demand shifting toward compliant and well-managed companies. We see this reflected in our holdings. In the past year, we have observed stronger demand for branded meat and regulated healthcare products, supporting companies such as Masan MeatLife (MML) and Traphaco (TRA). In discretionary categories, market consolidation and recent gold-related policies are expected to benefit established players like Phu Nhuan Jewelry (PNJ).
In particular, the erosion of the wet market advantage is emerging as a central structural theme for 2026 and beyond. Stricter tax enforcement and the mandatory adoption of e-invoicing are raising compliance costs for household businesses, narrowing the price gap with modern retail from 15–30% previously to near parity. As this gap closes, consumers have less incentive to stay with traditional channels, accelerating the shift toward modern trade. From a low base of around 14% penetration in 2024, we expect modern grocery to reach approximately 25% by 2030.
This transition directly benefits leading modern retailers such as Bach Hoa Xanh (BHX) of Mobile World Corporation (MWG) and WinCommerce of Masan Group (MSN). These companies are increasingly focusing on digitizing their ecosystems for product placement, store management, sales operations, loyalty programs, and customer service. With scale, supply chain control, and compliance already in place, both are positioned to capture share from informal channels. We expect Bach Hoa Xanh to sustain an aggressive rollout of more than 1,000 stores per year over the next five years, implying around 25% annual growth. WinCommerce is expected to grow at a slower but still solid pace of around 11%, reflecting its larger base.
A similar formalization trend is also affecting pharmaceutical retail. Independent drugstores are facing higher compliance requirements from tax reform, e-invoicing, and stricter enforcement of Good Pharmacy Practice (GPP) standards, alongside the rollout of electronic prescriptions. These changes raise barriers to entry and favor organized chains. As the largest modern pharmacy network, FRT’s Long Chau Pharmacy is well placed to consolidate market share. We expect the chain to expand to around 3,000 stores by 2027, from over 2,400 in 2025, while maintaining positive same-store sales growth and improving margins through scale efficiencies.
Market leader Traphaco (TRA) also benefits from these effects. As demand shifts away from unregulated traditional products toward branded, quality-assured medicines, well-established players gain share. Ongoing crackdowns on counterfeit supplements, particularly in online channels, have further widened this gap. With strong brand equity in herbal categories such as liver and brain tonics, and a push into premium herbal products, TRA is positioned to capture this demand. On this basis, we expect the company to sustain solid growth and deliver around 10% increases in both revenue and profit in 2026.
Another highlight during the conference was the increasing level of competition within the consumer sector. Digital platforms have made pricing more transparent, while promotional activity has intensified. Meanwhile, consumers are allocating more spending toward experiences rather than purely physical goods.
This has created margin pressure in certain segments. However, we see this as a driver of operational improvement. Leading companies are responding by optimizing store networks, strengthening supply chains, and improving cost efficiency.
Data presented during Vietcap’s session shows that several retail segments are already seeing stable or improving margins alongside continued revenue growth. This indicates a shift toward a more sustainable growth model, where profitability and execution take priority over expansion alone.
A clear example is our portfolio company MWG’s Dien May Xanh (DMX), which has moved toward optimizing its existing store network rather than expanding aggressively. This approach has already delivered strong results, with improvements in same-store sales and margins despite a reduced store count.
In the near term, consumer sentiment remains somewhat cautious. Higher living costs and ongoing formalization are weighing on spending decisions. That said, several factors are expected to support confidence and spending going forward, such as higher take-home income from tax adjustments, gradual rebuilding of household savings, and continued infrastructure development.
More importantly, Vietnam’s long-term policy direction remains consistent, with a clear focus on formalization, digitalization, infrastructure, and productivity growth. These priorities align with the country’s goal of reaching high-income status by 2045 and provide a stable foundation for domestic consumption.
At Kenno, the majority of our investment portfolio stands to benefit from high-level consumer trends forecast for 2026. In the past year, we have continuously increased our exposure to high-quality, representative large-cap companies that we believe will benefit the most from index inclusion and from the next upcycle of the stock market.
We believe Vietnam’s consumer sector is entering a more mature stage. growth is increasingly driven by: (1) Market consolidation toward larger, compliant businesses; (2) improved operational efficiency and profitability; and (3) more disciplined and resilient consumer behavior. As the sector becomes more structured, these qualities are increasingly important in driving performance.
While the current geopolitical environment may continue to affect short-term sentiment, it also reinforces the importance of focusing on businesses that combine scale, operational discipline, and strong market positioning. Our consumer holdings illustrate how leading businesses can benefit from consolidation, formalization, and sustained demand across both essential and discretionary segments.
Despite near-term volatility, we expect the consumer sector to remain one of the most consistent drivers of earnings growth in Vietnam over the coming years. Momentum is expected to be built on stronger fundamentals, clearer earnings visibility, and more sustainable long-term outlook.