Shift Toward Circular Economy Gains Traction in Vietnam's Retail Industry
In a significant move towards sustainable development and green growth, the coastal province of Ba Ria-Vung Tau is welcoming quality investment that aligns with the circular economy (CE) model. This shift is not only transforming the digital economy but also opening significant opportunities for Vietnam's retail industry.
On July 31, 2023, the Institute of Strategy and Policy on Agriculture and Environment (ISPAE) hosted a policy dialogue on promoting the circular economy in the retail sector. Dr. Nguyen Trung Thang, vice president of ISPAE, emphasised Vietnam's strong commitments to fostering the CE model.
International efforts are accelerating towards a Global Plastics Treaty, and retailers are being called upon to lead the shift to greener consumption. In response, Vietnam has introduced several legal frameworks to control plastic waste and promote sustainable production and consumption. One such initiative is the National Strategy on Integrated Solid Waste Management, which was introduced in 2020.
The government has also issued directives and decisions on enhanced plastic waste management and strengthening plastic waste reduction initiatives. A notable example is Decree No.08/2022/ND-CP, issued in January 2022, which outlines CE criteria, roadmaps, and incentives.
In line with these initiatives, Vietnam is developing a nationwide Deposit Return System (DRS) for single-use beverage containers and integrating Extended Producer Responsibility (EPR) frameworks. These measures aim to increase recycling rates, reduce plastic waste, and incorporate the country’s informal recycling sector to enhance closed-loop recycling and job creation.
The DRS, under study for implementation, targets PET bottles and aluminum cans, which constitute the majority of single-use beverage containers in Vietnam. The system is designed to reflect Vietnam’s unique social and infrastructural context, encouraging higher collection rates and reducing downcycling by enabling higher-grade recycling processes.
Sustainability efforts extend beyond packaging waste management into the retail textile and fashion sectors. Many Vietnamese apparel brands are adopting eco-friendly and recycled materials, driven by both government commitments to net zero emissions by 2050 and rising consumer environmental awareness. This includes collections using recycled plastics and organic cotton, supported by a growing digital retail market that facilitates green fashion accessibility.
Vietnam's broader economic strategy for 2025–2030 incorporates circular economy ambitions within a shift toward consumption-led growth, innovation, and digital transformation. This strategy encourages businesses that align with ESG principles, including sustainability and ethical sourcing, which affects retail and FMCG sectors increasingly.
While large-scale retail promotion programs in Hanoi and other urban centers primarily focus on stimulating consumer sales via digital platforms and discounts, these currently emphasize economic growth rather than explicit circular economy goals.
In a notable development, a coalition of 16 major retailers has been formed to promote the reduction of single-use plastics and embed circular principles into their operations. The EU and the German government are providing support for this coalition's efforts. In January 2023, the prime minister approved the National Action Plan for CE Implementation.
Mondelez Kinh Do has been honoured for pioneering in the circular economy. The retail sector is also embracing the green shift, as evident in Vietnam's two-wheeler market.
In summary, Vietnam is actively advancing its circular economy in retail through policies like the DRS and EPR, sustainable product innovation in sectors like fashion, and alignment with its national economic transition toward green and sustainable development. The country is poised to become a key hub in the global supply chain restructure by 2030, with its retail industry being integrated into global value chains.
- With the National Strategy on Integrated Solid Waste Management in place, accompanied by legal frameworks that promote sustainable production and consumption, Vietnam is leveraging science and technology to develop a Deposit Return System (DRS) for single-use beverage containers that incorporates the country’s informal recycling sector, aiming to incorporate environmental-science principles in job creation and closed-loop recycling.
- Amid rising consumer environmental awareness and government commitments to net zero emissions by 2050, the Vietnamese retail textile and fashion sectors are incorporating technology and finance to adopt eco-friendly and recycled materials, thus contributing to sustainable growth and transitioning digital economy towards the circular economy model.
