TOKYO -- Aeon, the biggest retail operator in Japan, is betting big on Vietnam, identifying the country as a top priority market due to its strong economic growth and modernization of the sector.

Aeon has been accelerating its expansion in Asia as domestic growth opportunities are limited by a shrinking Japanese population. In addition to its traditional large-scale shopping malls, it is stepping up efforts in the supermarket sector in Vietnam with its MaxValu format.

Daisuke Tezuka, executive officer, Vietnam business of Aeon, said in an interview with Nikkei Asia earlier this month, "Vietnam's population is still growing and has an average age of only around 34. Consumers have strong purchasing power and aspirations, while their lifestyles continue to shift toward more modern forms of consumption." Tezuka added, "That creates significant business opportunities." According to the World bank, the country's gross domestic product per capita reached $5,066 last year, up sevenfold over the past two decades.

Under Aeon's mid-term management plan ending in March 2031, which was announced in May, the company is targeting operating revenue in Vietnam of over 300 billion yen ($1.9 billion), a 2.5-fold increase from its fiscal 2026 forecast. It also plans to expand its supermarket network, including MaxValu, to 300 stores from about 60 currently, while allocating roughly 60% of its investment for Southeast Asia to the country.

The Japanese retailer has built stores ranging in size from small to large in Vietnam. It had a total of 302 outlets as of February 2026, including large shopping centers, Ministop convenience store and supermarkets, closing in on 311 outlets in Malaysia, the group's largest store network outside of Japan.

Vietnam's growth potential is a key reason behind the company's investment in the country, according to Tezuka, who said the penetration rate of modern retail in Vietnam is estimated to be below 20%. In major cities such as Hanoi and Ho Chi Minh City, the figure is thought to be about 30%, compared with around 50% in Malaysia.

"That leaves a gap of around 30 percentage points between Vietnam and Malaysia," he said.

Aeon entered Vietnam's retail sector in earnest in 2014 and believes its track record there gives it a strong foundation for further growth. Tezuka said the retailer's success over the past decade has given the company confidence that it can triple the size of its business in Vietnam.

It plans to expand shopping centers, home to numerous tenants selling a wide variety of products such as Aeon Mall in Vietnam, to 30 outlets by the end of fiscal 2030, more than tripling the current store count. It also continues to develop full-size shopping centers, such as ones it plans to open in northern Vietnam's Ha Long and Thanh Hoa, where it aims to cultivate new markets.

Aeon will not only expand its smaller supermarket outlets in Vietnam, but also continue developing bigger shopping centers, such as this Aeon Mall. to create new markets. (Aeon) Aeon is also expanding with malls in Danang. The central Vietnamese city offers growth potential and relatively high income levels, while the midsized format gives the retailer access to a broader range of locations.

The company has traditionally pursued an overall strategy of developing large-scale stores in suburban areas to prepare for population and consumer spending shifts from city centers to suburbs. Such projects typically require three to four years from the start of planning. But it is now trying to adapt to the development of cities as well. Tezuka said, "In Vietnam, the pace of suburbanization has been slower than expected, prompting us to rethink how we can expand into dense urban areas." He said MaxValu had emerged as a key growth driver in the country because the stores can be opened in densely populated neighborhoods and the number of outlets can be expanded faster. As large apartment complexes emerge on the outskirts of the capital, demand for nearby shopping options is also rising.

The retailer also sees Vietnam as an important manufacturing base for its private-label products such as groceries and household goods, as it aims to increase their share of its product lineup to 20% from the current 6%. "Developing private-label products in Vietnam and exporting to other markets [including Japan] is an important initiative for the Aeon group as a whole," Tezuka said. While the company has imported some products from Japan and worked to improve logistics efficiency, tariff and shipping cost issues tend to push up product prices.

As Aeon also views Vietnam as a key manufacturing base for its private-label products, the company plans to increase their share of product its lineup to 20% from the current 6%. (Aeon) Other retail operators as well haven't overlooked Vietnam's potential for modern growth in the sector and are accelerating expansion.

Thailand's Central Retail plans to open up to 12 hypermarkets and more than double the number of its stores in Vietnam over the next three years, according to an executive. Local retail conglomerate Masan Group plans to open 10,000 stores by 2030 through its operator of WinMart+ convenience stores.

Other Japanese retailers such as department store operator Takashimaya are also seeking business opportunities. In particular, convenience store chain FamilyMart aims to increase its number of outlets to 300 by 2030 from the around 200 currently.

One way to differentiate Aeon from competitors is to turn shopping center visitors into members of Aeon's unique economic ecosystem. It has its own Waon point reward system imported from Japan and implemented in Vietnam in earnest in 2025. Since then the program has increased to about four million members. With the launch of its financial services business planned for 2027, the company aims to grow its membership base to 20 million by fiscal 2030. "Many young Vietnamese consumers now rely on their smartphones for almost everything in their daily lives," Tezuka said. "The next step for us is figuring out how to offer an Aeon ecosystem that is tailored to those digital-native consumers."