The Golden Age of Consumerism in Vietnam: How Local Businesses Are Attracting Foreign Investment

These conditions are presenting significant opportunities for consumer-retail businesses such as Masan (HoSE: MSN) to become an attractive destination for international capital seeking to invest in Vietnam’s consumer story.

Vietnam: A Golden Era for Domestic Consumption

With a population of over 100 million, rapid urbanization, a young demographic structure, and a growing middle class, Vietnam is emerging as one of the most dynamic consumer markets in Southeast Asia. According to Boston Consulting Group, Vietnam’s middle and affluent classes are expected to comprise more than 50% of the population by 2030. This solid foundation is expected to drive sustainable long-term growth in consumer demand.

Amid a volatile global economic landscape, Vietnam stands out as a bright spot, buoyed by robust domestic purchasing power and impressive GDP growth rates that rank among the highest in Asia. Consequently, the consumer-retail market is increasingly becoming a strategic target for foreign investment.

Specifically, in 2024, Vietnam’s GDP grew by 7.09%, reaching USD 476.3 billion, ranking 14th in Asia and 5th in Southeast Asia. Domestically, according to the General Statistics Office, total retail sales of goods and consumer services revenue in the first four months of 2025 reached VND 2,285.5 thousand billion, a 9.9% increase year-over-year. Retail goods revenue alone accounted for VND 1,752.5 thousand billion, constituting 76.7% of the total, with essential goods categories such as food, clothing, household goods, and education all recording growth rates ranging from 6% to over 12%. The stable domestic purchasing power and high GDP growth have attracted the attention of foreign investors, making Vietnam’s consumer-retail market a strategic destination for foreign capital.

International investment funds tend to prioritize markets with large populations, stable consumption rates, and long-term expansion potential. Vietnam meets all these criteria, especially with the low penetration of modern retail, presenting significant growth opportunities.

In the long term, Vietnam’s retail market is projected to reach a size of USD 488.08 billion by 2029, with a compound annual growth rate (CAGR) of 12.05%. This impressive figure reflects the expansion of the middle class, rapid urbanization, and the boom in e-commerce.

Among the frontrunners in the market are companies with closed-loop ecosystems, strong execution capabilities, and clear strategies, such as the Masan Group, which is expected to lead the investment portfolios of foreign funds.

Owning a Closed-Loop Value Chain, Focusing on the Domestic Market

As Vietnam’s leading consumer-retail enterprise, Masan (stock code: MSN) is expected to attract the attention of international investors. With a closed-loop ecosystem spanning production (Masan Consumer), processing (Masan MEATLife), and distribution (WinCommerce), along with the tea and coffee F&B chain (Phúc Long), Masan is highly regarded for its ability to control domestic value chains and optimize operations.

The Q1 2025 financial report demonstrates impressive growth across Masan’s primary business segments. Consolidated net revenue reached nearly VND 18,900 billion, an increase of 11.1% year-over-year on a like-for-like basis, while EBITDA surged 20.8% to VND 4,003 billion. Notably, net profit increased nearly fourfold year-over-year to VND 394 billion.

Masan Consumer (UPCOM: MCH), the leader in the consumer goods sector, achieved revenue of VND 7,489 billion, a 13.8% increase, driven by double-digit growth in core product categories. Additionally, international market revenue surged by over 73%, indicating the effectiveness of its global expansion strategy.

WinCommerce, with over 4,000 stores, recorded revenue of VND 8,785 billion, a 10.4% increase. This was the third consecutive profitable quarter for the unit, with revenue per store continuing to improve due to 13.5% growth in rural areas, a key segment in its expansion strategy. Meanwhile, Masan MEATLife has been profitable for three consecutive quarters, with revenue reaching VND 2,070 billion, a 20.4% increase. The company’s sustainable profit growth is attributed to rising pork prices and the breakthrough performance of its processed meat products.

Furthermore, Masan is accelerating its investment in technology and digital transformation with its “Go Digital” strategy, leveraging data across its ecosystem.

Positive Outlook Attracts Foreign Capital

The investment outlook for Vietnam’s consumer-retail sector is further bolstered by positive assessments from analysts. Recently, BVSC expressed optimism about the growth potential of the Masan Group in 2025 and valued MSN shares at VND 89,200 per share based on the sum-of-the-parts (SoTP) valuation method.

In addition to the impressive Q1 financial results, several factors make Masan attractive to foreign capital: MSN’s foreign ownership limit (FOL) has ample room for new capital inflows, and its valuation is lower than the historical average. The stock also offers high liquidity, with a large market capitalization and active trading volumes. Moreover, MSN’s net debt/EBITDA ratio remains healthy at 2.9x, reflecting a robust balance sheet. As of Q1 2025, the company’s free cash flow (FCF) increased by 81% year-over-year to VND 743 billion, demonstrating strong cash generation capabilities amid a backdrop of reduced investment across many businesses.