June 4 - Vietnam emerged as the most attractive emerging market destination for retail investment  in the seventh annual Global Retail Development Index (GRDI), a study of retail investment attractiveness among 30 emerging markets conducted by management consulting firm A.T. Kearney.

Vietnam's leap to first place in the 2008 GRDI from fourth place in 2007 was driven by strong GDP growth, changes to the country's regulatory structure favouring foreign investors and increasing consumer demand for modern retail concepts, the report said.

The report states that while Vietnam's US$20 billion retail market pales in comparison to India or China, the absence of competition and 8 percent GDP growth, make it an attractive expansion opportunity for global retailers.

Vietnamese consumers - among the youngest in Asia, with 79 million below the age of 65 - increased their consumer spending by more than 75 percent between 2000 and 2007.

The Vietnamese government is expected to remove controls on 100 percent foreign ownership of retailers in the country and has established a new program to develop wholesale and retail real estate by 2010. The region has already seen the recent emergence of modern retail in neighbouring countries such as Thailand, Philippines and Malaysia.

India, Russia and China, the top three countries in last year's GRDI, have dropped to second, third, and fourth place respectively in the 2008 index, reported Forbes.