Brace yourselves: Economic storms loom for retailers and consumer goods manufacturers
In the face of U.S. countervailing tariffs, Vietnamese retail sectors are demonstrating resilience and agility in their response strategies.
The textile apparel industry, for instance, is focusing on increasing localization, with plans to boost the localization rate of fabric production and dyeing to around 45-50% in 2025. This move aims to reduce reliance on imported inputs and mitigate the impact of tariffs and supply-chain disruptions. Foreign investment is also shifting towards higher value-added activities, such as weaving, dyeing, and synthetic fiber manufacturing, in industrial hubs like Bac Ninh, Hai Phong, and Ninh Binh.
The electronics sector, too, is adapting. While facing increased cost pressures due to tariffs on key imports like steel and aluminum, Vietnamese exporters are enhancing their competitiveness through efficiency and product upgrading. Diplomatic efforts have also helped soften some tariff rates, providing a "win-win" outcome for both parties.
Meanwhile, FPT Retail, a significant player in the Vietnamese retail landscape, is continuing to expand its store network, invest in technology, and launch campaigns to strengthen consumer trust. The company is also working with partners to ensure competitive pricing and stable supply, particularly for products vulnerable to tariff impacts.
The resilience of the Vietnamese retail sector is evident in the strong growth seen in Q1 of 2025, with the textile apparel sector experiencing impressive profit growth. The total retail sales of goods and services in the first half of the year approximated $136.7 billion, marking a 9.3% increase on-year.
However, analysts have forecast potential headwinds for export activities in the second half of the year, particularly in key sectors such as seafood and textiles. To mitigate these risks, retail businesses are diversifying their offerings and adopting adaptive strategies in response to indirect effects on consumer behavior.
Notable success stories include FPT Retail, which posted a revenue increase of 26.1% to reach $922.4 million, while net profit soared 239% to $14.8 million. The retail arm of tech giant FPT Corporation is also diversifying into categories like electronics and services to further hedge against market risks.
Other companies, like Masan Group, are restructuring their distribution networks, shifting from reliance on major retailers to expanding direct access to small shops. Masan has increased store coverage to 62%, and the company is also renegotiating interest rates on existing loans, expecting to save approximately $20 million in interest expenses over the next four years.
Vietnam's industrial production surged 9.2% in the first half of 2025, marking its strongest growth since 2020 and reinforcing its role as a key economic driver. Despite the challenges posed by tariffs, it is clear that the Vietnamese retail sectors are proactively navigating these uncertainties to maintain their competitiveness in the U.S. market.
- In the textile apparel industry, strategic localization is being implemented to minimize reliance on imported inputs, with a goal to increase local fabric production and dyeing to 45-50% by 2025, demonstrating the industry's commitment to maintaining competitiveness in business and finance, despite tariffs.
- The finance sector is observing resilience in the Vietnamese retail landscape, as companies like FPT Retail and Masan Group are adopting adaptive strategies, such as diversifying their offerings and restructuring distribution networks, to withstand potential headwinds from tariffs and maintain their success in retail.
