Vietnam's consumer market and current trends
Vietnam's consumers are ranked the fifth most optimistic in the world!
With Vietnam’s economy keeping on its fast-increasing track, many of its citizens are becoming more confident about their future earnings and spending. In fact, according to Nielsen’s latest Consumer Confidence Index, Vietnam ranks the fifth most optimistic country globally!
After covering basic living expenses, around a third of all Vietnamese (total population of 90+ million) are willing to spend on goods or services such as holidays (38%), clothes (36%), technology (31%), home improvement (30%) and entertainment (29%).
Growing consumer market
In 2010, the median household disposable income was $2,613, while in 2016 it rose to $3,822, a 46% increase. In total, consumer expenditure in 2016 increased to $146 billion, from $80 billion is 2010. According to the forecast by Euromonitor, an average disposable income per household in 2020 will rise to roughly $4,530. Note: the average household size is shrinking in Vietnam (from on average 3.8 people in 2010 to 3.5 in 2015).
In Vietnam, almost 2/3 of the population still lives in rural areas. With developing manufacturing sector that is generally located outside of the cities, the income of rural residents, and their spending, is also increasing. Nowadays, their expenditure accounts for about 58% of the country’s total.
Comparing the growth of expenditure between rural and urban dwellers between 2010 and 2016, spending in rural areas increased 94%, while the urban areas grew at a slower rate of 69%. However, the average spending by urban residents is still higher, and is anticipated to stay this way, due to continuous migration from the countryside to urban centers. Migration is especially evident in Ho Chi Minh City and Hanoi, with 2 major cities continuously increasing their overall population in the previous few decades.
Demand for branded and/or foreign products
Despite overall tighter budget, local consumers are looking for products of higher quality. This is especially apparent among the office staff and younger professionals, with many of them being part of the middle-class (around 23% of the total population). The products that are especially popular are mid-range items with fashionable design and reasonable quality.
Vietnamese consumers in general have a preference for products from Europe, Japan, Korea, the US and Thailand, as they are generally perceived as safe and of high quality.
Original sources: 1, 2