From gadgets to groceries: Finding opportunities in Vietnam

From early-morning street vendors to late-night cafes, Vietnam’s cities rarely pause.

Motorbikes stream through the streets of Ho Chi Minh City and Hanoi in endless waves. Office towers thrum with activity. Shiny new shopping malls rise beside narrow alleyways lined with family-run businesses.

This daily vibrancy reflects deeper strengths. Vietnam is one of Asia’s most compelling growth stories. Despite global trade disruptions and tariff pressures, the economy has remained resilient. And the longer-term outlook is positive.

Incomes are rising fast, boosting consumers’ spending power. The workforce is growing, with one of the strongest female employment rates in the world. And, as in neighbouring China, the Communist government is bringing in market-based reforms, helping to attract foreign investment.

Opening up

Cultural attitudes have played a role in Vietnam’s development. As Rainer Zitelmann writes in a recent book, How Nations Escape Poverty, surveys show Vietnamese citizens strongly support private business and wealth creation.

Back in 1995, when Scottish Oriental launched, this entrepreneurial spirit was being stifled by bureaucracy. Vietnam’s equity market was closed to foreign investors, and business owners lacked access to capital.

We kept a close eye on the market as Vietnam opened. As “bottom-up” investors, we focus on finding the best smaller businesses in Asia, rather than trying to predict broad economic themes.

As the years passed, we began to spot exactly these sorts of companies emerging in Vietnam.

In 2016, we bought a stake in FPT, a firm that provides IT services to major clients in Japan and other global markets. This was our first direct investment in a Vietnamese company. With its competitive advantages and talented management team, FPT remains a key holding today.

A new investment: Mobile World

In 2025, we added a second Vietnamese company to the portfolio: Mobile World Group (MWG).

The company started in 2004 as an online mobile-phone retailer. It then expanded into consumer electronics and appliances, with a bricks-and-mortar retail chain that now has a 50% market share in its core categories.

MWG’s success lies in its customer-focused culture. Store managers have the power to propose new locations, and to select the products they wish to sell based on their knowledge of what’s popular. Staff are incentivised to ensure customer satisfaction, with customer feedback playing a big role in decisions about promotions and pay.

The management team has been admirably disciplined. For example, MWG has often paused expansion plans when things aren’t working. And it has decisively closed failing ventures, such as unprofitable sports and fashion retail businesses.

Fresh opportunities

The company’s current priority is its Bách Hóa Xanh grocery chain, which launched in 2015.

Grocery in Vietnam is a huge industry – worth around US$50bn – but it is still dominated by small shops and wet markets. Modern supermarket penetration is only 12%, compared with more than 50% in other Asian economies like Malaysia and Thailand. This gap suggests MWG has plenty of room to grow.

Moving into grocery has not been easy, however. Managing fresh-food supply chains is trickier than selling electronics. But Bách Hóa Xanh has now reached breakeven point and is starting to benefit from economies of scale.

We are confident MWG is well positioned to capture the long-term opportunity in grocery, thanks to the same customer focus and operational discipline it applied in its electronics business. And we are proud Scottish Oriental will be accompanying the firm on the next stage of its journey.

The future of the company – like that of Vietnam itself – looks bright.

How to invest

You don’t have to be an expert in Asian smaller companies to invest in them – Scottish Oriental can make it easy for you.

How to invest

Risk factors

Capital at risk. The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back significantly less than the original amount invested.

Read full risk factors

How to invest

You don’t have to be an expert in Asian smaller companies to invest in them – Scottish Oriental can make it easy for you.

Risk factors

This material is a financial promotion for The Scottish Oriental Smaller Companies Trust Plc (the “Trust”) intended for those people resident in the UK for tax and investment purposes.

Investing involves certain risks including:

The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back significantly less than or none of the original amount invested.
Emerging market risk: Emerging markets tend to be more sensitive to economic and political conditions than developed markets. Other factors include greater liquidity risk, restrictions on investment or transfer of assets, failed/delayed settlement and difficulties valuing securities.
Currency risk: the Fund invests in assets which are denominated in other currencies; changes in exchange rates will affect the value of the Fund and could create losses. Currency control decisions made by governments could affect the value of the Fund's investments and could cause the Fund to defer or suspend redemptions of its shares.
Smaller Companies Risk: investments in smaller companies may be riskier and more difficult to buy and sell than investments in larger companies.
Leverage risk: the Trust may be leveraged due to: i) borrowings; or ii) the use of derivatives to hedge currency exposure. The amount of leverage employed is disclosed on the Trust’s website from time to time. Higher leverage increases the potential risk of loss. Investment trust share prices may not fully reflect Net Asset Value.
The Trust’s share price may not fully reflect net asset value.

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