With the determination to bring the economy back to a high growth rate, in 2024, Resolution No. 01/NQ-CP of the Government focused on developing the domestic market to achieve a growth rate of total retail sales of goods and consumer service revenue of about 9%. This task was completed in 2024 with the total retail sales of goods and consumer service revenue for the whole year estimated at more than 6.39 million billion VND, an increase of 9% compared to 2023.
Four factors increasing demand
According to Dinh Thuy Phuong, Director of the Department of Trade and Service Statistics, General Statistics Office, there are four factors leading to the above positive results.
First of all, it is thanks to the Government's strong direction to ministries, branches and localities in promoting production activities, stimulating consumption, supporting production, business and developing the domestic market; removing difficulties for production and business activities of the production and retail sectors of goods; accommodation and food services; tourism and travel services; transportation and warehousing services.
The reduction of VAT from 10% to 8% for some essential goods and the adjustment of the base salary from July 1, 2024, will also contribute to reducing production costs, increasing profits, and increasing the ability to stimulate consumer demand.
Notably, the import turnover of consumer goods in 2024 increased by 20.6% compared to 2023, also reflecting the positive recovery of domestic consumer demand. In addition, the strong growth of the tourism market also contributes significantly to the recovery of consumer demand.
International visitors to Vietnam in 2024 are estimated to reach more than 17.5 million, an increase of 39.5% compared to 2023, contributing to a spillover effect on the production and business performance of a number of domestic market service economic sectors, including accommodation and catering services, transportation, retail of goods, and travel and tourism services.
However, Dinh Thuy Phuong noted that consumption recovered positively and achieved the set target but did not reach the expected growth rate and did not return to the double-digit growth rate as before the COVID-19 pandemic. Notably, in the structure of total retail sales of goods and consumer service revenue, the structure of people's consumption for essential life goods accounted for 77%, up from 75.3% in 2019.
Other social services, such as accommodation, food and beverage, travel, and entertainment, decreased compared to pre pandemic levels. This reflects that people tend to spend more economically and mainly only shop and consume essential life goods such as food, clothing, household appliances, tools, equipment, and cultural and educational items. Spending on all social services decreased compared to before the pandemic.
Increasing income for workers
According to economic experts, in the short term, consumption is still one of the main growth drivers of the Vietnamese economy.
However, domestic consumption has not recovered as strongly as expected while the gross domestic product (GDP) in 2024 grew beyond forecasts, the average monthly income of workers also increased by 8.6%, which is a very noteworthy issue in the management of 2025.
In the short term, consumption is still one of the main growth drivers of the Vietnamese economy.
At a recent workshop, Dr Nguyen Bich Lam, former General Director of the General Statistics Office, said: Final consumption accounts for about two-thirds of the GDP of the entire economy, therefore, final consumption is still a very important growth driver.
The Government needs to have solutions to stimulate final consumption motivation through solutions to generate income for workers, ensure that all workers have income and increase household income. In particular, there needs to be support solutions so that workers are ready to find jobs, especially jobs in the formal sector.
From the impressive growth figures of consumer goods import turnover in 2024 and the trend of people traveling abroad, Dr Nguyen Bich Lam said that ministries, branches, localities and enterprises need to research the production and supply of domestic goods and services that ensure quality and are competitive in price to attract consumption of Vietnamese goods and promote domestic tourism, thus contributing more strongly to growth.
Because the consumption of imported goods and the import of services will invisibly reduce GDP. In 2024, the country will almost reach the target of welcoming 18 million international visitors and only about 5.3 million Vietnamese people will travel abroad. However, the country will still have a trade deficit of about 380 million USD in tourism services because the spending of Vietnamese people traveling abroad is larger than the revenue from international tourists.
The sector that contributes significantly to total domestic consumption and has great potential for development in the coming time is e-commerce. Vietnam's e-commerce market in 2024 will exceed the 25 billion USD mark, growing 20% compared to 2023 and accounting for 9% of total consumer goods.
According to Nguyen Anh Duc, Chairman of the Association of Retailers, maintaining an e-commerce growth rate of about 20% over the next 5 years is necessary to promote GDP and achieve double-digit growth.
In order to stimulate domestic consumption and promote retail activities of goods and consumer services in Vietnam in the coming time, the General Statistics Office recommends that the Government continue to implement policies to minimise the impact of price increases on goods from increasing the basic salary; and maintain a stable supply of goods to serve the essential needs of people during the Lunar New Year.
At the same time, it is necessary to promote activities to stimulate domestic consumption, especially programmes connecting supply and demand on digital platform. In addition, it is necessary to promote tourism activities and attract international visitors to Vietnam, giving priority to localities with advantages in tourism development.
