One of Southeast Asia's fastest growing consumer markets, Vietnam has all the right conditions favourable for the expansion and growth of a vibrant luxury goods sector – an impressive GDP growth rate, political stability, a youthful population, a rising middle class, increasing disposable incomes, fast paced urbanisation, rising living standards, high literacy rate, and a strategic location on the cross roads of international trade routes.
Vietnam's growing affluent and middle class as well as its young population with increasing disposable incomes have been propelling an increasing appetite for luxury goods. Coupled with a general tendency for conspicuous consumption, this has opened up opportunities for Western luxury brands in this fast-growing consumer market. Vietnam's emerging class of high networth individuals (HNIs), who currently number 12,807, are projected to increase by 139% to 30,338 by 2025. However, while not completely focused on luxury consumption, the main driver of the Vietnamese consumer market will be its growing middle class and its young population. Overall, the total consumer spending in Vietnam is forecast to increase from EUR 118 billion in 2015 to 163 billion in 2020.
The appetite for luxury goods is more pronounced in the country's capital Hanoi and in Ho Chi Minh City, the country's largest commercial centre. EU businesses should look to either of these cities as entry points to the Vietnamese luxury market. New high-end shopping centres and malls continue to be developed in the two cities, with the five-floor Takashimaya department store, which opened in Ho Chi Minh City in 2016, being not only the latest but one of the finest examples.
In the years ahead, the EU-Vietnam Free Trade Agreement (EVFTA) will offer a variety of opportunities for European investors, including those in the luxury goods sector. Among other provisions, Vietnam is set to remove 99% of its tariffs on EU goods within 10 years of the agreement' completion. Besides tariff reductions, EVFTA has several non-tariff provisions including intellectual property protection. EU producers of luxury goods, who choose to invest in Vietnam in the near future, stand to gain a significant advantage in establishing name recognition in a relatively untapped market.
What is in the report
CHAPTER 1: COUNTRY PROFILE
- A Stable Political Environment
- Economic Situation & Outlook
- Technological Situation & Outlook
CHAPTER 2: CONSUMER PROFILE
- Conspicuous Consumption
- Consumption Peculiarities
CHAPTER 3: MARKET OVERVIEW
- Market Segmentation
- Drivers of Growth
CHAPTER 4: COMPETITION AND DISTRIBUTION
- Entering the Vietnamese Luxury Goods Market
CHAPTER 5: REGULATORY AND LEGAL FRAMEWORK
- Regulatory Constraints
- Opportunities Under EVFTA
- The Road Ahead