The consumer market in Vietnam is expanding at a fast rate. The economy of Vietnam has been on the upswing for 20 years, and has steepened since 2007, when the country joined the WTO. The GDP growth rate has been above 5 percent for over a decade. Now middle class workers account for 25 percent of total population. Furthermore, the population of Vietnam is adding 1 million people a year. What come with this positive change is the increase of the purchasing power of consumers and the expansion of the consumer market in Vietnam.
What’s more valuable is that the new wealth is well distributed. Income in rural area actually grows faster than in urban area—expanding by 18.5 percent annually from 2002 to 2010, compared with 16.6 percent in the urban area.
The optimism floating in the consumer market in Vietnam
The consumers’ confidence is an important factor affecting their willingness to purchase. In a consumer research conducted by the Boston Consulting Group, Vietnamese consumers is the most optimistic in the world. More than 90 percent of consumers believe they can live a better life than their parents and their children to live better than themselves. The level of optimism is the highest among the 25 countries recorded, significantly leading China (75 percent) and India (70 percent). Despite short term worries about the global economy, 70 percent of Vietnamese say that the economy is on the up swing.
They are in the right mood to buy. Eighty percent of consumers said they wanted to make more purchase than they did one year before. And they were more open to purchase on credit than their counterparts in Thailand and Myanmar, with 43 percent saying they would consider borrowing to buy essential items and 28 percent willing to borrow even for luxury items.
Breakdown of the consumer market in Vietnam
According to geographic distribution, sales in the consumer market in Vietnam are concentrated in 6 cities: Can Tho, Da Nand, Haiphong, Hanoi, Ho Chi Minh City and Nha Trang, accounting for 40 percent of the country’s sale.
In terms of sales by area, education, healthcare, food and beverage production and personal care products are the most popular areas of expenditure.
As one of the world’s fastest growing economy, there is no reason to believe in the consumer market in Vietnam. With the improving of infrastructures and rapid adoption of modern technology, there are more and more modes that can drive the development of the consumer market in Vietnam, like online purchasing. The window for the consumer market in Vietnam is wide open.