Traditional retailers find strength in specialization amid retail modernization

Traditional retailers across the region are charting a different course as modern shopping centers and convenience chains proliferate. Rather than attempting to replicate the operations of larger competitors, neighborhood grocers and independent stores are capitalizing on what they do best: deep community connections and personalized service.

Industry analysts note that the traditional retail sector need not pursue aggressive expansion strategies to remain viable in an increasingly competitive marketplace. Instead, independent shopkeepers can differentiate themselves by focusing on specific customer demographics, offering products tailored to local tastes, and providing the personal touch that large chains cannot replicate.

This approach has proven particularly effective in Vietnam and neighboring markets, where retail sales have demonstrated robust growth. The sector has expanded over 13 percent during the first seven months of this year, with traditional retailers capturing their share of consumer spending by meeting specialized demand.

The retail sector's performance has become a key driver of economic growth in major urban centers, including Ho Chi Minh City, where retail expansion continues to contribute significantly to double-digit growth figures. As consumer services and retail sectors evolve, the coexistence of traditional and modern retail formats appears to be strengthening overall market dynamics rather than creating a zero-sum competition.

Experts suggest that traditional retailers who recognize their competitive advantages—including flexible inventory management, community relationships, and lower operational costs—are better positioned to sustain profitability than those attempting to directly compete with large-format retailers on their own terms.

Photo: A neighbourhood grocery store on Trung Kính Street, Hanoi, February 2026. Bohdan Phúc Đan via Wikimedia Commons (CC BY-SA 4.0).