Horeca Distribution Vietnam Drives SME Growth in Key Cities

Vietnam’s HoReCa (Hotel – Restaurant – Catering) sector has become a magnet for international SMEs looking to expand in the fast-growing F&B industry. With revenue growth of 16.6% in 2024 and more than 323,000 outlets nationwide, the country’s two largest cities - Ho Chi Minh City and Hanoi - serve as the growth engines of Horeca Distribution Vietnam. Their scale, tourism potential, and consumer diversity make them the ideal entry points for international brands.

Ho Chi Minh City and Hanoi are the two growth engines driving Horeca Distribution Vietnam for international SMEs.

Horeca Distribution Vietnam – why Ho Chi Minh City leads

Ho Chi Minh City is widely regarded as the F&B capital of Vietnam, with a dense concentration of restaurants, hotels, cafés, and international chains.

• Market shakeout: In the first half of 2024, the number of F&B outlets in Ho Chi Minh City dropped by nearly 5.97%, higher than the national average. Yet, revenue continued to rise as large chains and well-funded brands captured market share.

• Tourism-driven demand: Hotel occupancy reached around 66% in Q1/2024, with ADR (average daily rate) increasing by 9% year-on-year. Tourism recovery has fueled stronger demand for dining and catering services.

• Testing ground for innovation: The city is home to new business models such as cloud kitchens, delivery platforms, and tech-enabled dining, offering SMEs opportunities to test new FMCG products.

Bui Vien Street illustrates why Ho Chi Minh City leads Horeca Distribution Vietnam with vibrant nightlife and strong tourism demand.

HoReCa in Hanoi – cultural tourism and premium demand

As Vietnam’s political and cultural capital, Hanoi is both a domestic hub and a leading international tourism destination.

• Tourism recovery: International visitors from Korea, China, and Europe are returning in strong numbers, driving demand in four- and five-star hotels and restaurants.

• Consumer characteristics: Hanoians value a balance between traditional and modern dining, creating opportunities for premium, imported, and organic FMCG products.

• Brand validation: Success in Hanoi often translates into credibility across Northern Vietnam, where consumer trust and brand reputation are decisive factors.

Ta Hien Street shows Hanoi’s cultural tourism appeal and premium HoReCa demand, vital for SMEs expanding in Vietnam.

Why Ho Chi Minh City and Hanoi are growth engines

• Ho Chi Minh City is a dynamic market where SMEs can quickly pilot and scale new models before expanding to Southern provinces.

• Hanoi serves as a credibility market - if a brand wins in Hanoi, it gains reputation and consumer trust across Northern Vietnam.

• Together, the two cities account for the largest share of Vietnam’s F&B revenue and are critical to Horeca Distribution Vietnam.

Strategic implications for international SMEs

1. Start in Ho Chi Minh City and Hanoi: build brand presence and validate products in these two high-potential markets first.

2. Leverage Horeca Distribution Vietnam: partner with local distributors who have strong networks in hotels, restaurants, and cafés.

3. Use Vietnam Market Entry Services: cut costs, ensure compliance, and shorten time-to-market.

4. Tailor strategies to each city: Ho Chi Minh City favors innovation, while Hanoi emphasizes tradition and brand reputation.

Strategic takeaways for SMEs in Vietnam’s HoReCa market

Ho Chi Minh City and Hanoi are not only Vietnam’s largest markets but also the growth engines of the country’s F&B industry. For SMEs, these two cities should be seen as strategic gateways into Vietnam, where success depends on combining Horeca Distribution Vietnam with comprehensive Vietnam Market Entry Services. By doing so, international brands can expand faster, reduce risks, and build sustainable reputations in Vietnam’s competitive F&B landscape.

To succeed, international brands need trusted local expertise. Partners like Go2Market (G2M) Vietnam provide end-to-end market entry support, helping SMEs reduce risks, accelerate distribution, and build sustainable reputations in Vietnam’s competitive HoReCa sector.