Emi Vn Consumer Lifestyles 10

8/12/2019 Emi Vn Consumer Lifestyles 10

1/74

Consumer Lifestyles - Vietnam

Euromonitor International

November 2010


2/74

Consumer Lifestyles Vietnam

Euromonitor International Page i

List of Contents and Tables

Structure of the Report .................... ..................... ..................... ...................... ..................... ..................... ............. 1Consumer Trends.................................................................................................................................................... 1

the Majority Are Spending Less, While A Few Are Spending More .......................................................................... 1 the Young Generation Are the Most Powerful Consumers .................. ...................... ..................... ..................... ...... 2Promotion of Products Made in Vietnam .................................................................................................................. 3 Hi-tech Consumers ...................... ..................... ..................... ...................... ..................... ..................... .................... 4A Poor Country, But A Profitable Market for High-end Cars ..................... ..................... ..................... .................... 5Consumer Segmentation ......................................................................................................................................... 6Babies and Infants................... ..................... ...................... ..................... ..................... ...................... ..................... .. 6Kids ........................................................................................................................................................................... 7Tweenagers ............................................................................................................................................................... 8Teens ......................................................................................................................................................................... 9Twenty-somethings ...................................................................................................................................................10Thirty-somethings ....................................................................................................................................................11Middle-aged Adults ..................... ..................... ..................... ...................... ..................... ..................... ...................12Older Population .....................................................................................................................................................13

Table 1 Consumer Segmentation: 2005-2009................................................................................13Table 2 Consumer Segmentation: 2010-2020................................................................................13

People ......................................................................................................................................................................13Population ................................................................................................................................................................14Marital Status ......................... ..................... ...................... ..................... ..................... ...................... ..................... .14Town Or Country .....................................................................................................................................................15

Table 3 Population by Age: 2005-2009 .........................................................................................16Table 4 Population by Age: 2010-2020 .........................................................................................16Table 5 Male Population by Age: 2005-2009 ................................................................................17Table 6 Male Population by Age: 2010-2020 ................................................................................17Table 7 Female Population by Age: 2005-2009 ............................................................................17Table 8 Female Population by Age: 2010-2020 ............................................................................17Table 9 Population by Ethnic Groups: 2005-2009.........................................................................18Table 10 Population by Ethnic Groups: 2010-2020.........................................................................18Table 11 Population by Marital Status: 2005-2009 .........................................................................18Table 12 Population by Marital Status: 2010-2020 .........................................................................18Table 13 Marriage and Divorce Rates/Average Age at First Marriage: 2005-2009 ....................... .18Table 14 Population by Urban/Rural Location and Population Density: 2005-2009 ...................... .19Table 15 Population by Urban/Rural Location and Population Density: 2010-2020 ...................... .19Table 16 Population by Major Cities: 2005-2009 ............................................................................19Table 17 Population by Major Cities: 2010-2020 ............................................................................19

House and Home ....................................................................................................................................................20Households by Annual Disposable Income .................... ..................... ..................... ...................... ..................... .....20Households by Number of Occupants ................................... ..................... ..................... ...................... ...................20Single-person Households ..................... ..................... ...................... ..................... ..................... ..................... .........21Couples Without Children ........................................................................................................................................21Couples With Children .............................................................................................................................................22Single-parent Families .............................................................................................................................................22

Table 18 Annual Disposable Income per Household (Current Value): 2005-2009 ....................... ..22Table 19 Annual Disposable Income per Household (Constant 2009 Value): 2010-

2020 ..................................................................................................................................23


3/74


Euromonitor International Page ii

Table 20 Households by Number of Persons: 2005-2009 ...............................................................23Table 21 Households by Number of Persons: 2010-2020 ...............................................................23Table 22 Households by Type: 2005-2009 ......................................................................................23Table 23 Households by Type: 2010-2015 ......................................................................................24

Home Ownership ........................ ..................... ..................... ...................... ..................... ..................... ...................24Running Costs ...................... ..................... ..................... ..................... ...................... ..................... ..................... .....25Shopping for Household Goods ...............................................................................................................................26Possession of Household Durables ..........................................................................................................................27DIY and Gardening ..................... ..................... ..................... ...................... ..................... ..................... ...................27Pet Ownership ...................... ..................... ..................... ..................... ...................... ..................... ..................... .....28

Table 24 Households by Tenure: 2005-2009 ...................................................................................28Table 25 Households by Tenure: 2010-2020 ...................................................................................29Table 26 Running Costs: 2005-2009 ...............................................................................................29Table 27 Possession of Household Durables: 2005-2009 ................................................................29Table 28 Possession of Household Durables: 2010-2020 ................................................................29Table 29 Pet Population: 2005-2009 ...............................................................................................30

Income .....................................................................................................................................................................30Average Income ...................... ..................... ...................... ..................... ..................... ...................... ..................... .30Average Income by Age ...................... ..................... ..................... ...................... ..................... ..................... ............30

Table 30 Annual Gross and Disposable Income (Current Value): 2005-2009 ..................... ............30Table 31 Annual Gross and Disposable Income (Constant 2009 Value): 2005-2009 ..................... .31Table 32 Annual Gross and Disposable Income (Constant 2009 Value): 2010-2020 ..................... .31Table 33 Average Annual Gross Income by Age (Current Value): 2005-2009 ...............................31Table 34 Average Annual Gross Income by Age (Constant 2009 Value): 2005-2009 ................... .31

Consumer Expenditure ..........................................................................................................................................32Living Costs ................................... ..................... ...................... ..................... ..................... ...................... ...............32

Table 35 Consumer Expenditure by Broad Category (Current Value): 2005-2009 .........................33Table 36 Consumer Expenditure by Broad Category (Constant 2009 Value): 2005-2009 ..................................................................................................................................33

Table 37 Consumer Expenditure by Broad Category (Constant 2009 Value): 2010-2020 ..................................................................................................................................33

Work .......................................................................................................................................................................34Working Conditions .................................................................................................................................................34Commuting ...............................................................................................................................................................34Working Women .......................................................................................................................................................35Alternative Work Options ................... ..................... ..................... ..................... ...................... ..................... ............35Retirement .................... ...................... ..................... ..................... ..................... ...................... ..................... ............35Unemployment .........................................................................................................................................................36

Table 38 Employed Population: 2005-2009 ....................................................................................36Table 39 Employed Population: 2010-2020 ....................................................................................36Table 40 Unemployed Population: 2005-2009 ................................................................................36Table 41 Unemployed Population: 2010-2020 ................................................................................37

Learning ..................................................................................................................................................................37School Life ...............................................................................................................................................................37University Life ..................... ...................... ..................... ..................... ..................... ...................... ..................... .....38Adult Learning .................... ...................... ..................... ..................... ...................... ..................... ..................... .....39

Table 42 School Students: 2005-2009 .............................................................................................39Table 43 Graduates: 2005-2009 ......................................................................................................39Table 44 Higher Education Students: 2005-2009 ............................................................................40

Eating (including Soft Drinks) ..............................................................................................................................40


4/74


Euromonitor International Page iii

Shopping for Food and Drinks .................................................................................................................................40Dining in ................... ..................... ...................... ..................... ..................... ..................... ...................... ...............41Dining Out .............................. ..................... ...................... ..................... ..................... ...................... ..................... .42Caf Culture ..................... ..................... ...................... ..................... ..................... ..................... ...................... ........43

Table 45 Consumer Expenditure on Food (Current Value): 2005-2009 .................... ..................... .43Table 46 Consumer Expenditure on Food (Constant 2009 Value): 2005-2009 ................... ............44Table 47 Consumer Expenditure on Food (Constant 2009 Value): 2010-2020 ................... ............44Table 48 Consumer Foodservice by Type (Current Value): 2004-2008 .................... ..................... .44Table 49 Consumer Foodservice by Type (Constant 2008 Value): 2004-2008 ................... ............45

Drinking ..................................................................................................................................................................45Drinking Habits .......................... ..................... ..................... ...................... ..................... ..................... ...................45Shopping for Alcoholic Beverages ...........................................................................................................................46

Table 50 Consumer Expenditure on Alcoholic Beverages and Tobacco (CurrentValue): 2005-2009 ............................................................................................................47

Table 51 Consumer Expenditure on Alcoholic Beverages and Tobacco (Constant 2009Value): 2005-2009 ............................................................................................................47

Table 52 Consumer Expenditure on Alcoholic Beverages and Tobacco (Constant 2009Value): 2010-2020 ............................................................................................................47Smoking ..................................................................................................................................................................47Smoking Habits ........................................................................................................................................................47Shopping for Cigarettes and Tobacco ......................................................................................................................48

Table 53 Smoking Prevalence: 2005-2009 ......................................................................................49Personal Appearance .............................................................................................................................................49Shopping for Toiletries and Cosmetics ....................................................................................................................49Attitudes Towards Hair and Beauty .................... ...................... ..................... ..................... ..................... ................49

Table 54 Expenditure on Cosmetics and Toiletries (Current Value): 2005-2009 ............................50Table 55 Expenditure on Cosmetics and Toiletries (Constant 2009 Value): 2005-2009 .................50

Fashion ....................................................................................................................................................................51Fashion Trends ........................................................................................................................................................51Shopping for Clothes, Shoes and Luxury Goods ......................................................................................................52

Table 56 Consumer Expenditure on Clothing and Footwear (Current Value): 2005-2009 ..................................................................................................................................53

Table 57 Consumer Expenditure on Clothing and Footwear (Constant 2009 Value):2005-2009 .........................................................................................................................53

Table 58 Consumer Expenditure on Clothing and Footwear (Constant 2009 Value):2010-2020 .........................................................................................................................53

Health and Wellness...............................................................................................................................................53Healthcare ....................... ..................... ..................... ...................... ..................... ..................... ...................... ........53

Health and Well-being ................................. ..................... ...................... ..................... ..................... ...................... .54Sport and Fitness .....................................................................................................................................................55Nutrition .................... ..................... ..................... ...................... ..................... ..................... ..................... ................56Home Medication and Vitamins ................... ...................... ..................... ..................... ..................... ...................... .56

Table 59 Health Expenditure: 2005-2009 ........................................................................................57Table 60 Healthy Life Expectancy at Birth: 2005-2009 ..................................................................57Table 61 Obese and Overweight Population: 2005-2009 ................................................................57Table 62 Consumer Expenditure on Health and Wellness (Current Value): 2005-2009 ............ .....57Table 63 Consumer Expenditure on Health and Wellness (Constant 2009 Value):

2005-2009 .........................................................................................................................58Leisure and Recreation ..........................................................................................................................................58Staying in .................................................................................................................................................................58


5/74


Euromonitor International Page iv

Going Out ................................................................................................................................................................58Public Holidays, Celebrations and Gift-giving Occasions.......................................................................................59 Culture .....................................................................................................................................................................59Holidays .................... ..................... ...................... ..................... ..................... ...................... ..................... ...............60

Table 64 Household Possession of Cable TV and Satellite TV: 2005-2009 ..................... ...............60Table 65 Household Possession of Cable TV and Satellite TV: 2010-2020 ..................... ...............61Table 66 Consumer Expenditure on Package Holidays (Current Value): 2005-2009 ..................... .61Table 67 Consumer Expenditure on Package Holidays (Constant 2009 Value): 2005-

2009 ..................................................................................................................................61Table 68 Consumer Expenditure on Package Holidays (Constant 2009 Value): 2010-

2020 ..................................................................................................................................61Consumer Technology ...........................................................................................................................................61In-home Technology .................... ..................... ..................... ...................... ..................... ..................... ...................61Portable Technology ................................................................................................................................................62E-commerce and M-commerce ............. ...................... ..................... ..................... ..................... ...................... ........63

Table 69 Household Possession of Broadband Internet-Enabled Computers, DVDPlayers and Video Game Consoles: 2005-2009 .................... ...................... ..................... .63Table 70 Household Possession of Broadband Internet-Enabled Computers, DVDPlayers and Video Game Consoles: 2010-2020 .................... ...................... ..................... .63

Table 71 Household Possession of Mobile Telephones: 2005-2009 ...............................................63Table 72 Household Possession of Mobile Telephones: 2010-2020 ...............................................64

Transport ................................................................................................................................................................64Getting Around ........................................................................................................................................................64Air Travel ..................... ...................... ..................... ..................... ...................... ..................... ..................... ............65

Table 73 Household Possession of Passenger Vehicles: 2005-2009 ...............................................65Table 74 Household Possession of Passenger Vehicles: 2010-2020 ...............................................65Table 75 Consumer Expenditure on Transport Services (Current Value): 2005-2009 ................... .66Table 76 Consumer Expenditure on Transport Services (Constant 2009 Value): 2005-2009 ..................................................................................................................................66Table 77 Consumer Expenditure on Transport Services (Constant 2009 Value): 2010-

2020 ..................................................................................................................................66Money......................................................................................................................................................................66 Savings .....................................................................................................................................................................66Loans and Mortgages..................... ..................... ...................... ..................... ..................... ...................... ...............67Credit .......................................................................................................................................................................67

Table 78 Savings and Savings Ratio: 2005-2009 ............................................................................68Table 79 Consumer Loans, Mortgages and Credit (Current Value): 2005-2009 .............................68Table 80 Consumer Loans, Mortgages and Credit (Constant 2009 Value): 2005-2009 ..................68Table 81 Financial Cards in Circulation: 2005-2009 .......................................................................69


6/74


Euromonitor International Page 1

CONSUMER LIFESTYLES IN VIETNAM

STRUCTURE OF THE REPORT

This report forms part of the report series that complements the Euromonitor International Countries andConsumer Database. Each country profile is structured under the following primary headings:

Consumer Trends

Consumer Segmentation

People

House and Home

Income

Consumer Expenditure

Work Learning

Eating (including Soft Drinks)

Drinking

Smoking

Personal Appearance

Fashion

Health and Wellness

Leisure and Recreation Consumer Technology

Transport

Money

The information in this report was gathered from a wide range of sources, starting with national statisticsoffices. This information was cross-checked for consistency, probability and mathematical accuracy.

As well, the report seeks to fill the gaps in the official national statistics by using private-sector surveys andofficial pan-regional and global sources. Furthermore, Euromonitor International has undertaken an extensiveamount of modelling in order to generate unique datasets that complement the available national standards.

The wide range of sources used in the compilation of this report means that there are occasional discrepancies inthe data, which were not reconcilable in every instance. Even when data are produced on specific parameters bythe same national statistical office, such as total population in a particular year, discrepancies can occurdepending on whether the data were derived from a survey, a national census or a projection and whether thedata were based on mid-year or January figures.

To identify recent past trends, data are presented for 2005, 2006, 2007, 2008 and 2009. For projections, data arepresented for 2010, 2015 and 2020.

CONSUMER TRENDS

the Majority Are Spending Less, While A Few Are Spending More


7/74



Impacted by economic fluctuations and the worldwide financial crisis, Vietnam is facing tougher economictimes alongside other countries. As a result, Vietnamese consumers are generally becoming more careful whenmaking purchases, only spending money on necessary items. Some choose to travel further to find a cheaperprice. According to Vietnamese newspaper, The Labourer, almost 80% of the Vietnamese population claim tobe spending less, of which 20% are the poorest segment of the population whose spending only accounts for7.2% of the countrys consumption.

Meanwhile, the wealthiest 20% of the population are responsible for 43.3% of total consumption. This smallsection of people purchase luxury products, while the majority of the population are trying to save more.Estimates suggest that this top 20% of consumers can spend around VND80 million-VND100 million (aroundUS$4,000-$5,000) in a shopping trip to premium stores.

Outlook

The economic situation is forecast to improve in coming years, but prices of goods and services are expected toincrease. Thus most Vietnamese consumers will become poorer, as salaries will not increase at the same rate asinflation. The Vietnamese will continue to follow the saving trend in the short term.

Meanwhile, a small proportion of the population continues to buy expensive luxury products and invest ininternationally famous brand names. Their high incomes mean that this section of the population does not payattention to product prices when making a purchase, and the growth rate of spending by this group is expected toincrease rapidly in coming years.

Impact

Vietnamese are estimated to spend more than 40% of their income on food, according to the VietnamHousehold Standard Living Survey 2008, conducted by the General Statistics Office (GSO). The Governmentaims to stabilise food prices to protect the lives of the population, thus the market for food is likely to continueits healthy and substantial growth.

Consumers prefer fresh foods rather than processed or packaged ones. It is estimated that almost 90% of

housewives go to the market every day. On the one hand this is because, owing to agricultural and fisheriessectors, the price of fresh foods such as vegetables, meat and seafood is cheaper than that of processed andpackaged versions. On the other hand, in the current economic climate, visiting the market every day isfavourable when prices are fluctuating. It is likely, therefore, that fresh food will continue to be favoured by themajority of the population for the foreseeable future.

With high incomes that are growing rapidly as a share of total expenditure, the wealthier section of Vietnameseare being targeted by high-end international brands, in particular clothes, shoes, handbags and cosmetics. Thishas created a profitable market for expensive imported branded goods, including Calvin Klein, Louis Vuitton,Mango, Etam, Valentino, Esprit, Bossini, Este Lauder, LOral, Revlon and Shiseido. An increase in thenumber of outlets selling imported products are predicted to grow in coming years.

the Young Generation Are the Most Powerful Consumers

Nearly 60% of the Vietnamese population are under 30 years old. Young, dynamic, wealthy and generous aretypical characteristics of this group and it is said that they not only create consumer trends and the market forthe goods that they demand, but that they also impact on the consumption psychology, behaviour and demandsof other consumer age groups in society.

This consumer group tends to go shopping quite regularly, on average weekly or fortnightly. Prices are not amajor consideration: if this consumer likes a product, they will buy it. With financial independence anddedication to receiving and spreading information rapidly through the mass media and internet, they confidentlyestablish new consumer trends. They are especially interested in fashionable clothing and accessories,cosmetics, technology and processed foods. They are also able to influence consumers through their posts oninternet forums, even bringing about boycotts of products through complaints online. They are confident buyerswho know what they want, and they are willing to express their preferences with regards to products and

services. Thus this group of consumers has been considered the most powerful in recent years.


8/74



Product quality is not deemed an essential criterion, as there is a standing assumption that all products should beof high quality. Instead, these consumers pay attention to a products design, style, material, function andcharacteristics. Great attention is also given to quality of service received when buying: the aesthetics of thestore, after-sales service and the service given by sales staff. This consumer prefers shopping in modern outlets,such as department stores and supermarkets, rather than traditional markets, because they do not like bargaining,even though this means that they will pay higher prices. The younger generation are considered fastidiousconsumers.

Outlook

Vietnam has a young population and the countrys relatively high birth rate means that the younger segment isgoing to continue to account for a major share in the countrys population. Vietnam is also currently at agolden stage, wherein the money-earning section of the population is twice as large as the dependent section,increasing this former sections influence in the market.

Impact

It is the younger Vietnamese who establish the fashion, and the easiest way to identify current trends is by

watching young people, and then adjusting slightly for other age and income groups. Young people look tofashion styles of other countries, such as South Korea and Japan, for their inspiration and as a result, theclothing market in Vietnam has rapidly improved in recent years.

Young people also establish and influence trends in make-up and cosmetics. They like to try new things, sowhen Vietnamese television shows lots of Korean movies, the younger generation shows a preference forKorean make-up techniques, which impact on demand and sales of cosmetics. In consequence, in addition to thepopular brands of Revlon, LOral and Shiseido, the cosmetics market has welcomed Korean products includingOHUI, Missa, Etude and the Face shop.

The younger generation also favour high-tech products, with an increasing number using laptops, netbooks,mobile phones, webcams, digital cameras and Bluetooth technology. As this group always want the latestmodels and gadgets, these items are changed regularly, which has resulted in Vietnam becoming a dynamic and

profitable market for high-tech goods in recent years.

Another consequence of this technology-friendly group is the high demand for wi-fi in coffee shops in the largercities. With an increasing number of young people using a laptop or netbook for studying, working orentertainment, access to the internet for downloading information, communicating and shopping online whileon-the-go is seen as increasingly, and critically important. As a result, coffee shops offering wi-fi access areincreasing in popularity.

Promotion of Products Made in Vietnam

The Vietnamese market has been flooded for years with Chinese-made or Chinese-grown products, includingvegetables, fruit, clothes, shoes and electric appliances. This, together with industrialisation and urbanisation,has contributed to a decline in the agricultural sector in recent years.

The clothing market has been heavily dominated by China, despite national production and export of textilesand garments. It is estimated that Chinese products account for around 60%-80% of the market and Vietnameseproducers cannot compete, owing to higher production costs.

Owing to trade liberation rules applied since Vietnam became the 150th member of the World TradeOrganization (WTO), the Vietnamese Government cannot set up tariffs to protect domestic production.Therefore, the Government and domestic farmers and manufacturers are trying to influence consumers through acampaign to encourage them to buy products made in Vietnam. This campaign has been running for severalyears, but it was heavily emphasised in early 2010.

At the Governments encouragement, many retailers have been trying to introduce and deliver Vietnameseproducts to consumers. Supermarkets and hypermarkets have been increasing their share of Vietnamese

products and giving key placements within the store to these products to make it easy for customers to choosethem. Simultaneously, in conjunction with producers, they have organised promotional programmes to reduce


9/74



domestic product prices. Moreover, retailers such as Saigon Co-op deliver Vietnamese products by van tocustomers in rural areas.

Meanwhile, a consumer product survey called high-quality Vietnamese products, conducted by Saigon TiepThi magazine each year, has attracted a lot of attention from the mass media, informing consumers of theresults, and it has become a reliable source of information on which consumers often rely when making apurchase. Fortunately for the domestic market, the number of Vietnamese products voted for by consumers hasincreased over time, with brand names showing success including An Phuoc, Viet Tien, Vinasoy, Hung PhatTea, Trung Nguyen Coffee, Vinh Hao Mineral Water, Tribeco, Vinacafe, Dai Dong Tien Plastic, Duy TanPlastic, Cholimex, Tuong An and My Hao. Based on this survey, many trade fairs have been organised inprovinces such as Ho Chi Minh City, Hanoi, Hue, Hai Phong, Rach Gia, An Giang, Nghe An, Buon Me Thuot,Binh Dinh, Gia Lai, Da Nang, Cambodia and Vung Tau. As a result, Vietnamese consumers throughout thecountry are more aware of high-quality Vietnamese products and they are more willing to buy them.

Outlook

Knowing that Vietnamese products cannot compete with Chinese ones on many levels, the VietnameseGovernment has been encouraging national consumers to buy products that are made in Vietnam, in order to

support domestic producers. This encouragement has been stressed for several years and it has created amovement towards domestic product purchases, especially in rural areas. The Government will continue toencourage Vietnamese consumers to use domestic products.

However, despite efforts made by the Vietnamese Government and manufacturers, many Vietnamese consumersstill buy Chinese goods, even where they know the Chinese products to be of lower quality. This is mainlybecause they are very cheap and thus more affordable for the majority of Vietnamese. Moreover, Chineseproducts are said to be well designed and offer numerous styles and models.

Impact

Although the clothing market has been flooded by Chinese products, there has been an increasing number ofVietnamese manufacturers successfully establishing their brands and becoming increasingly popular with and

familiar to Vietnamese consumers. They account for a firm market share and have built up loyal customers.With regard to casual wear for younger generations, Ninomax, PT 2000 and Viet Thy are sure to figure, whileViet Tien, An Phuoc and Nha Be are popular Vietnamese mens wear and accessories brands and OXY, MocMien, Sifa Fashion, NEW and Senorita are equally popular with women. Additionally, young fashion designersare winning customers with well-designed Vietnamese clothes.

Tea and coffee are two products with which Vietnamese producers can compete against China to winVietnamese customers. With the advantage of being the largest producer and exporter of coffee in the world,some Vietnamese producers have marketed their products successfully in both the domestic and internationalmarkets. Vietnamese coffee is best known through Trung Nguyen Coffee, not only for its coffee products butalso its franchise of coffee shops, while another Vietnamese coffee brand is Vinacafe. With regards to tea, TamChau Tea and Hung Phat Tea have created many kinds of herbal tea, which are well known in the market.

Other areas where domestic products dominate include the market for sauces and spices. For the Vietnamese,fish sauce is necessary for every meal and thus Phu Quoc Fish Sauce, Lien Thanh Fish Sauce and Thien HuongFish Sauce are high-quality Vietnamese products that meet the demand for this traditional item.

Hi-tech Consumers

Despite being a low-income country, Vietnam is potentially highly profitable when it comes to high-tech users,especially young people, who have increased significantly in recent years. Computers, laptops, netbooks,internet access and mobile phones are increasingly popular and have been widely used by Vietnameseconsumers for some years.

Vietnam has had a high growth rate of internet users in recent years. Owing to cheap connection fees, thenumber of internet subscribers has risen sharply. According to the Ministry of Information and Communication,

there were 22.8 million internet subscribers in Vietnam in 2009, accounting for 26.6% of the total population,


10/74



and an increase of 112.7% from 2005. With this number of internet users, Vietnam has been ranked seventhamong countries in Asia by Internet World Stats.

Vietnam also has one of the most rapidly growing mobile phone markets in the world. According to theMinistry of Information and Communication, there were 135.3 million telephone users in January 2010, anincrease of 62.3% on the same period of the previous year, among whom were 115.7 million mobile phonesubscribers, an increase of 68% on 2009, and six times higher than the 19.6 million landline telephone users.This meant that the share of Vietnamese households with a mobile phone reached 27.5% in 2009, a significantincrease from 7.5% in 2005.

For Vietnamese consumers, mobile phones are not just a means of communication, but are also a fashionstatement and demonstration of ones social status. A small proportion of Vietnamese consumers are willing topay significant amounts of money for expensive mobile devices, as a result of which Vietnam is considered aprime market for smart phones such as the iPhone, HTC and BlackBerry devices. Smart phones are currentlyestimated to account for around 7% of the market, but they contribute 25% of total market turnover.

Outlook

The latest gadgets are always attractive to young people: they always want the most up-to-date technology.Therefore, the market for high-tech products is expected to become more crowded and develop significantlyover the next few years.

Although coping with a harsher economic reality, resulting in a lower growth rate for high-tech goods in 2009,this market is forecast to grow quickly over the next few years. The number of internet subscribers is expectedto increase significantly alongside the rising number of laptop owners and mobile phone subscribers.

Impact

Laptops are increasingly favoured by consumers, especially younger consumers, owing to their flexibility ofuse, and their ideal form for students for study purposes. Currently, in addition to foreign brands such as HP,Compaq, Lenovo, Acer, Asus, Sony and Dell, a domestic laptop market has appeared, including brands such as

eMachines, VENR, Axioo and MSI, now estimated to account for around 40% of the market share. All laptopproducers have been cutting their prices to make their products more affordable for the majority of Vietnameseusers, especially students, who have a high demand for finding information on-the-go.

Since most Vietnamese consumers are on a low income, cheap mobile phones are in high demand and this is animportant market segment for producer and seller alike, especially in the current economic climate. Therefore,in addition to brands such as Nokia and Samsung, cheaper, domestic brands have been successfully marketed inrecent years, such as Q-Mobile, F-Mobile, I-Mobile, Mobell and MobiStar.

The sustained increase in the number of internet users and internet-enabled computers in Vietnam hasencouraged the development of e-commerce. Although e-commerce in Vietnam is in the early stages, it isbecoming a more familiar option for Vietnamese consumers, and online stores such as muare.vn,123mua.com.vn, hello247.net, goldmart.vn, nguyenkim.com, dienmaythienhoa.com and vitinhphongvu.com are

becoming ever-more popular with those choosing to shop online.

A Poor Country, But A Profitable Market for High-end Cars

Cars are not a main means of transportation in Vietnam. Only a very small number of Vietnamese drive cars, asthey are not affordable and the roads in Vietnam are unsuitable. However, there is a paradox here, which is thatthe prices at which cars are sold in Vietnam are said to be some of the highest in the world, despite the fact thatVietnam is one of the poorest countries. This is mainly because of the Governments protection of the countrysinfant automobile industry. However, a small number of high-income earners are willing to pay the high pricedemanded, especially since 2007 when the stock market and real estate netted some Vietnamese high earnings.As a result, there were more than 1.6 million registered cars in Vietnam as of June 2010, an increase of 6.3% onthe previous year according to the Department of Land Transportation Police. With a population of more than86 million people, the number of cars is indeed a tiny one, with a rate of 8 cars per 1,000 inhabitants.


11/74



There is also a small group of high-income earners who only wish to drive the most luxurious cars in the world.Since the first Maybach 62 arrived in Vietnam at the end of 2006, it seems as if all the most luxurious andexpensive cars in the world, such as Rolls Royce, Bentley, BMW and Mercedes, valued at hundreds ofthousands of US dollars even without including taxes, have been imported into Vietnam by sea and air,alongside popular brand names such as Toyota, Ford and Peugeot. As of mid-2008, there were around 15 RollsRoyce Phantoms, more than 20 Bentleys and seven BMW X6s (the latter after its launch in the USA in April2008).

Outlook

Since 2007, when the Vietnamese stock market and real estate become very hot, there has been a newlyemerging high-income group. These individuals invest in luxury cars, not merely as a means of transport, but asa status symbol. The demand for the most luxurious of cars by Vietnamese high earners is predicted to increaseover the next few years.

Impact

In 2009, in order to reduce the trade deficit, the Ministry of Trade and Industry asked the Government to

increase import duty on imported cars from 83% in 2008, to 91%, in the hope that the number of imported carswould decline. However, despite this move, the number of luxury cars being imported has continued to increase,and providers of imported luxury cars are earning money while domestic automobile makers are facingdifficulties in the harsher economic climate.

CONSUMER SEGMENTATION

Babies and Infants

In 2000 the Vietnamese Prime Minister launched the Strategic Population Programme for the period 2001-2010,in an attempt to solve the high population problem in the country. The Programme has been implemented in twostages, first by reducing the birth rate sharply and sustainably by providing through the mass media educational

information on family planning, especially in rural and remote areas. As a result, the Vietnamese birth rate hasfallen significantly over the past 10 years. According to the National Population Survey conducted by the GSOin April 2009, the birth rate in that year was two infants per female, which was lower than the 2.3 infants/femalein 1999. Owing to the Programme, the number of babies born in Vietnam has been decreasing continuouslyduring 2005-2009, and it was estimated that there were 4.7 million babies and infants in Vietnam in 2009, a fallof 1.9% from the previous year, and 4.6% from 2005.

Babies receive more individual care and attention now from their parents. As living standards and averagefamily income in Vietnam have increased, the number of children in each household has fallen. Whereas in thepast, especially in rural areas, one couple might have had 10 or more children and thus not have had enoughtime and money to take good care of all of them, the situation is now significantly altered, with most babiesbeing well cared for from the time they are born.

A traditional belief in Vietnam is that dressing a new baby in the old clothes of a healthy and rapidly growingbaby might help the new-born, so mothers-to-be usually ask their relatives or friends for old clothes beforegiving birth, and they do not use new clothes for the new-born baby. However, the belief is gradually changingand although some families in rural areas still follow this tradition, most Vietnamese mothers now just ask for afew old items of clothing as a symbol, and some families even buy all new clothes for their baby.

Besides essentials such as clothes and nappies (diapers), an increasing number of baby care products are beingused in Vietnam. A higher living standard, higher disposable incomes and lifestyle changes have moved parentstowards the convenience of modern baby-care products such as food-makers, training cups, baby strollers andbuggies, baby walkers, car seats and breast pumps.

Despite having fewer babies, the busier lifestyles and higher ambitions of Vietnamese women have resulted inan increase in bottle feeding for babies, especially in big cities such as Ho Chi Minh City or Hanoi, althoughbreast feeding is still generally encouraged.


12/74



Parents also now tend to send their babies to crches sooner, especially those living in urban areas. According tothe Labour Code, women can take four months off after giving birth, after which some of them ask for two moremonths off without salary. For those whose parents cannot help them to take care of the baby or who cannot finddomestic help, and have to go back to work to keep their position at work, the baby will be sent to a crche.

Impact

While the number of babies in Vietnam will continue to decline in coming years due to the Governmentsfamily planning programme, related markets have been growing substantially due to changes in consumer habitsand perception.

In the past, the Vietnamese had to make clothes and other things related to caring for a baby, but they nowusually use ready-made products to save time. More players have joined the baby clothing market, sellingcolourful, beautiful and cheap clothing in supermarkets and traditional markets all over the country. Currently,domestic clothing manufacturers dominate this market, while products made in China, Thailand or Taiwan arerarely chosen by Vietnamese consumers due to higher prices or concern about materials used to make Chineseproducts. As textiles and garments are one of Vietnams comparatively advantageous markets, and owing to thesustainable consumer habits for Vietnamese products, the baby clothing market in Vietnam is predicted to

remain dominated by domestic players rather than imported products, even cheaper Chinese products.

Formerly, the Vietnamese only used cotton nappies for their babies, despite its inconvenience, and disposablenappies were imported from other countries such as Thailand or Taiwan. However, most families now usingdisposable nappies for their babies, use domestically produced nappies. Vietnamese consumers have alsobecome familiar with well-known brands such as Huggies, Pampers, Bobby, Nannys and Zuno, and theseproducts have become so popular that the three producers involved have won and retained significant marketshare in the country. It will be quite difficult for new players joining this market in the future.

An increasing number of Vietnamese are using modern baby care products, especially products for going out,such as baby strollers, buggies and car seats, particularly among families living in urban areas. The market forsuch products remains small and mostly imported from abroad. In Ho Chi Minh City, MBCare Group has beensuccessful in creating a chain of outlets named Me&Be, distributing mother and baby care products imported

from countries including Taiwan, South Korea and Germany. The number of consumers, however, is small, astransport in Vietnam discourages the use of such products, so this will be a slowly growing market in comingyears.

The fact that fewer women are breast feeding their babies has created an opportunity for powdered milkproducers and helped this market grow sharply in Vietnam in recent years. There are many brands of powderedmilk for each stage of a childs growth, including Friso, Similac, Meiji, Dumex, Lactogen, Dutch Lady andVinamilk. Manufacturers are working hard to persuade female consumers to trust their products for babies andthis is expected to continue to be a profitable market over the next few years.

There are not many toys for babies up to two years old and it is not a good market for domestic manufacturers,which produce few toys that are not good quality. However, imported toys that are classified for these ages, suchas Fisher-Price, are quite expensive for Vietnamese consumers, so the market has been flooded with Chinese

products for many years and most Vietnamese buy them without caring about the quality or about which kind oftoy is suitable for which age. There are several retailers focusing on high-income consumers, who can afford tocare about the quality of the toys for their babies, such as MBCare Group, Rainbow and World of Toys, whichsell imported high-quality products from the European Union (EU), Thailand and Malaysia.

Kids

Although the general birth rate in Vietnam has been declining over the past 10 years under the campaign eachfamily should have one or two children only, the number of families having a third child has been increasing,especially since 2006-2007. For a number of different reasons, including wanting a boy, these families decide tohave a third child and accept the punishment from the Government for this. Therefore, the number of kids ofthree to eight years old increased by 4.8% during the review period of 2005-2009, and the number of kids isexpected to increase again in 2010. However, the number of kids is expected to decline after 2010 as a result of

the aforementioned family planning programme that started in 2001.


13/74



With the increase in the number of kids, spending for this group has also risen. This is not only because of anincrease in parental incomes, but also an increase in demand for essential goods and services for this age group.From the age of three, most children have to go to kindergarten or school, thus they need a uniform, clothing,bags, notebooks, etc. Equally, at this age children are dynamic, creative and want to learn, and so demand fortoys in this group is high.

Being a traditionally Eastern country, children are expected to listen to their parents without demur. However, afreer and more liberal lifestyle development in recent years in Vietnam has encouraged some children to givetheir opinions on what they like and what they think. Vietnamese children now to some extent can choose theproducts that they use, although most consumer decisions for this age group are made by their parents.

Vietnamese kids are rarely allowed to have a mobile phone or play video games, and some families evenprevent the kids from watching too much TV. The parents are always watching their kids, even at home or onthe way to and from school. Some kids in high-income families may have a computer on which they can playand learn.

While advertisements targeting children are discouraged at certain times and in certain places in other countries,this issue is still open in Vietnam. There are many adverts on TV targeting children, for products such as fish

sauce, milk, cheese, instant noodles, etc. At present, advertising targeting children is not of major concern forVietnamese parents and so there are no debates in the mass media on the subject. At the time of writing, therewas no indication that the Government would regulate advertising for children over the next few years.

Impact

The clothing market for kids has great potential, but it is estimated that Chinese-made products account foraround 60%-80% of the market. Vietnamese products cannot compete with Chinese products due to higherproduction costs. Consumers can buy clothes made in China for VND15,000 (less than US$1), with which pricedomestic manufacturers cannot compete. Equally, the Chinese products are well made and well styled infashionable colours, while locally produced clothing tends to be simple and unattractive to kids, althoughseveral domestic brands have managed to build a positive image, including YF (Young Fashion), Viet Thy, AnhThu, Kico, Hoa Kim and Sun & Moon. New Vietnamese manufacturers are afraid of entering the market,

however, due to lack of demand, while some existing producers are looking to exit the market due to the highcost of production. Thus, this market is predicted to be flooded by principally Chinese products in coming years.

Besides the domestic brands Bitis and Bitas, all footwear sold in the Vietnamese market is also made in China.Domestic manufacturers have no expressed intention of focusing on this age group.

The toy market for this age group faces the same problem. Demand for toys in this group is high, but domesticmanufacturers ignore this market because they cannot compete with Chinese products in terms of cost orcreativity. Therefore, almost all toys sold in Vietnam are made in China and this situation is likely to continue.

The fact that advertising aimed at children is allowed in Vietnam has increased childrens pester power.However, Vietnamese kids have no influence over their parents decisions to buy larger, family items such aselectronics, consumer durables and cars; kids can only influence their parents over choices of clothing, food,

drinks or toys. Although pester power is a new phenomenon in Vietnam, and not yet broad in influence, it is apowerful tool and manufacturers are taking advantage of it to push sales by using attractive adverts on TV.

Kids in Vietnam are becoming older than their age, and the range of goods and services that they arerequesting from their parents is changing accordingly. To ignore this development would be a mistake fordomestic manufacturers, as they risk being blocked entirely from the market, as has happened in other productsectors.

Tweenagers

Vietnam has successfully implemented family planning since the 1990s; however, it is said that the result of thefamily planning programme in the 1990s was much better than that of the programme in the 2000s. As a result,the number of births in the 1990s, many of whom are now tweenagers and teenagers, has been decreasing over

time. There were 6.1 million tweenagers in Vietnam in 2009, a fall of 12.5% from 2005. However, this number


14/74



was expected to rise by 4.9% from 2010, reaching 6.3 million tweenagers in 2020, due to an increase in thenumber of kids in the 2000s.

This group has become more powerful in consumer terms in recent years, although parents are still the maindecision-makers for consumption by tweenagers. The change has come about because this group has started todecide how to spend their pocket money, and this is an age group that is easily influenced by advertisements andpersonal recommendations (such as from friends).

Normally, the money spent by this age group comes from parents. In most families, the parents give pocketmoney to the children monthly or weekly (a few give it daily). The amount of money that parents give theirchildren depends on the familys income. Pocket money is usually enough to allow the tweenagers to buysweets, cakes, or snacks for themselves and their friends during break time at school. There is no current surveydata available about average pocket money allowances for tweenagers.

Some of this age group are allowed by their parents to use a mobile phone, especially those living in urban areassuch as Ho Chi Minh City. The argument given is usually that of convenience for the parents to be able tocontact the tweenagers if need be. Besides making and receiving calls, this group may use mobile phones to playgames or even to access the internet or to watch movies.

Vietnamese children face a difficult curriculum, regulated by the Ministry of Education and Training, from thetime they start school at six years old. The higher the grade, the heavier the educational workload and the lesstime allowed for entertainment. Learning is required even during the summer holiday and sometimes it seems asif children have forgotten playtime.

Even when tweenagers have playtime, the leisure activities available are poor, with traditional games such asskipping, hide and seek, etc. falling, especially in urban areas, where playgrounds are less common. In free timetweens may choose to watch TV, play computer games, go shopping or to the theatre with their parents. In HoChi Minh City, many kids, tweenagers and teenagers enjoy the TV drama series, Ngay xua ngay xua (OnceUpon a Time), which relates fairytales.

Impact

Demand for clothes in this age group is high and tweenagers can influence their parents decisions on clothingpurchases. Here, as with kids, Chinese-made goods are dominant, as they provide fashionable and attractiveclothing for the age group.

This age group is easily influenced by advertising, and it is targeted through television Milk producers are agood example here: since milk is deemed a necessary nutritional item, if children persuade their parents to buymilk for them to grow as strong and healthy as the actors in the advertisements, the parents are happy to comply.Thus, the milk market has been one of the fastest growing in Vietnam in recent years.

The target consumers for mobile phones are not tweenagers, of course; however, some in this age group havestarted to use mobile phones. Parents give their children mobiles in order to contact them more easily; however,children familiarise themselves with technology rapidly and it is easy for them (particularly with GPRS

general packet radio service) to download games, ringtones and wallpapers, access the internet and watch films.GPRS has become the most popular mobile service and is advertised on all TV channels.

Teens

Current teenagers were born in the early 1990s, when Vietnam started to implement family planning. Althoughthe impact of this programme did not result in such significant decreases as for current tweenagers, it did reducethe growth rate by 2.8% from 2005, to 12.4 million teens in 2009. Over coming years, as the tweenagers becometeenagers, this growth rate will continue to decline, by 10% to 2020, when there will be nearly 11 millionteenagers.

Of course, teenagers need money to meet their daily needs, and most Vietnamese parents give teenagersmonthly pocket money for them to spend. Teenagers have more freedom then tweens, who are normally treated

as kids. Teenagers can decide independently how to spend their pocket money.


15/74



Some teenagers are quite mature and do not ask their parents for money, instead earning a wage in a part-timejob, perhaps being a stylist, model, musician, writing articles or organising events. In Vietnam, wheretraditionally most children have relied on their parents until they become an adult, this is an interesting andpositive development, as it allows teenagers to grow more independent.

An increasing number of teenagers use mobile phones, especially in urban areas. In addition to the positiveaspects of mobile phone use, such easy access to the internet (with the popular GPRS) has created somenegative aspects. Teenagers are at an age where they are half mature, half child, and they tend to show off to getattention and prove themselves. They are easily influenced and subject to peer pressure. At the time of writing,there was concern, for example, over teenagers recording and uploading to the internet clips of them fightingone-another.

Teenagers today are more concerned with appearing attractive and fashionable, and they take more care overtheir appearance than previous generations. Vietnamese teenagers are significantly influenced by South Koreanfashions and movie celebrities, and they thus use the cosmetics and imitate the hair styles (including dying theirhair red or brown) popular in South Korea.

Impact

Teenagers are interested in fashion, and they shop for clothes, shoes and cosmetics. They may frequent shoppingmalls, stores or traditional markets. However, as yet there is no targeted market segment for teens in any ofthese three products, and there is no clear distinction in products for teens and for twenty-somethings. Clothingand footwear styles and brands for teens and those in their twenties are mixed together, which makes it easy formanufacturers to produce in bulk, but means that there is no differentiation for these two age groups. Despitethis, as both groups look constantly for new styles and influences in fashion, the clothing and footwear markethas grown quickly in recent years.

Teenagers have no qualms about using new technologies such as computers, laptops/netbooks, mobile phones,3G, the internet, etc. This is a positive development if used in the right way; however, negative aspects of thistechnological freedom are emerging. Online retail is not regulated with regard to the age of shoppers, andcombined with a lack of supervision on the part of some parents, many teenagers are becoming addicted to

online gaming. In fact, online gaming was one of the fastest growing markets in Vietnam in 2009-2010, and waspredicted to grow sharply over the next few years.

Twenty-somethings

Owing to high birth rates in the 1980s, the number of people in their twenties increased by 7.9% during thereview period, to reach 16.7 million people in 2009. However, with decreasing numbers of teens, tweens andkids, this age group is expected to decrease by 2.7% during the forecast period, to 16.5 million in 2020.

People in their twenties are known as the 8X generation in Vietnam, as they were born in the 1980s. They aresaid to be dynamic, creative, idealist, intelligent, independent and hard-working. At this age mature, twenty-somethings start to work and earn money, make their own decisions, often for the first time, and choose what towear, what to do and with whom to make friends.

Because twenty-somethings are dynamic, they are early adopters of new technology. Laptops, netbooks, mobilephones and Bluetooth devices are popular with the 8X generation, for whom it is said that a mobile phone is oneof their three indispensable belongings. It is estimated by the Ministry of Post and Telecommunication that thereare more than 3 million mobile phone subscribers in Vietnam, of whom at least 50% are of the 8X generation.For them, mobile phones are no longer just a means of contacting others, but are fashion statements and statussymbols.

The other two indispensable items for an 8X-er are said to be a credit card and a USB storage device. Anincreasing number of twenty-somethings now use a credit card, mostly to shop online. With the ability toconnect to the internet on their laptop via wi-fi in a coffee shop, 8X-ers can shop easily for books and otheritems, usually for cheaper prices. The USB stick is the 8X-ers mobile hard disk, on which they can exchangeand store music, pictures, stories, educational files, working materials and books. The USB storage device is

increasingly a complement to 8X-ers laptops or netbooks.


16/74



Impact

The rapid growth of the mobile phone market is put down to twenty-somethings, as their demand forcommunication is high: they need to contact friends, find new jobs or business opportunities, as they will have

just entered the job market. Mobile phones are also seen as fashion statements and with mobile providerscontinuous special offers and discounts, mobile users can change their phone regularly, increasing the handsetmarket. In addition to imported mobile phones of popular makes such as Nokia, Samsung, LG, BenQ-Siemensand Sony Ericsson, the Vietnamese market has welcomed new mobile phone brands such as Mobell, WellcoM,F-Mobile and MobiStar, for which Vietnamese manufacturers imported spare parts from China and assembledthem in Vietnam. Mobile providers offer everything from premium handsets such as Vertu, Apple and Mobiado,to popular, cheap ones, in chain outlets across the country, especially in big cities such as Ho Chi Minh City orHanoi. These outlets have also embraced e-commerce, selling phones and laptops online and providingadditional services such as installing games, apps and software on phones and laptops for buyers. Some of themore successful of these outlets include gioi di dong (www.thegioididong.com), VienthongA(www.vienthonga.com) and Viettel mobile supermarket.

Laptops are also highly attractive to twenty-somethings, owing to their mobile convenience. A laptop can betaken everywhere, from classes at university, to parks, coffee shops and the workplace. Laptop providers have

given twenty-somethings discount offers and affordable models. Acer and HP-Compaq are two brands that aremostly bought by twenty-somethings, as they are affordable, although some 8X-ers use brands such as IBM-Lenovo, Dell, Asus or the Apple MacBook. With their dynamic, high-tech image, 8X-ers have been driving thedevelopment of this market.

Coffee shops are the most popular places for twenty-somethings to go when they have free time, to meet friendsor business associates, or to relax. Coffee shops offering wi-fi internet access are thus in great demand and tomeet it, coffee shops in larger cities such as Ho Chi Minh City or Hanoi have installed internet routers toprovide wi-fi to their customers, have redesigned their shops with different areas for different activities, such asgroup gatherings in one area and workers in another. There are more and more coffee shops following thispattern in Ho Chi Minh City, Hanoi and similar cities or provinces throughout the country.

The motorcycle market also has been impacted by this age group. As the main mode of transportation in

Vietnam is motorcycle, each Vietnamese adult needs their own motorcycle to travel. When twenty-somethingsstart to earn their own money, they also need to have their own transport, and they often buy a motorbike toreplace a bicycle or old motorbike given them by their parents when they were teenagers. Currently, there is atrend for scooters in Vietnam, particularly among twenty-somethings, with the most popular brands being SYM,Honda and Suzuki.

Thirty-somethings

People in their thirties were born in the 1970s when Vietnam had no family planning programme, thus theynumbered 13.6 million in 2009, an increase of 7.4% on 2005. This age group was expected to continue to grow,by 21.0% over the forecast period, to reach 16.7 million in 2020.

Most thirty-somethings at some point get married and have children, and with family responsibilities comes a

new level of maturity. At this age, they are also likely to have established a career and their place in society, andare the principal decision-makers in their life, with consumer power to match.

However, as those in their thirties often have jobs, work and families, far less time can be devoted to leisure.Indeed, often leisure time consists of trips to the country or, for the wealthier individuals, abroad, on publicholidays. Traditionally, after work each day Vietnamese women do the housework and take care of theirchildren (some may have domestic help), while the men go to coffee shops, restaurants, bars or pubs to meettheir friends or business associates to maintain and build up social relationships. However, lifestyles arechanging and a greater sense of freedom and equality for Vietnamese women has permeated the country, withtraditional family life gradually changing. Working dinners and eating out with friends have reduced the numberof family meals held, where all family members meet to eat and talk. As a result, the connection betweenhusbands and wives, children and parents, has been changing, resulting in a higher divorce rate in Vietnam.

Impact


17/74



Although this age group has high spending power, they usually spend money on necessary goods. It is estimatedby the GSO, from a survey on household living standards in 2008, that food accounted for more than 40% of aVietnameses expenditure. Where the Vietnamese go to buy food and household items varies according to thedifferent regions of the country. A survey on high-quality Vietnamese products conducted by Sai Gon Tiep Thimagazine in 2008 showed that 67.3% of southern Vietnam consumers chose to shop in supermarkets, whilenorthern Vietnamese favoured specialist stores and the central and highland area consumers predominantlyshopped in traditional markets. While traditional markets are everywhere in Vietnam, supermarkets haveexpanded their outlets widely to popularise these modern channels of consumption. The most successfulsupermarket in Vietnam is Saigon Coop, with its CoopMart. The Saigon Coop launched its 44th outlet in DaNang City in January 2010 and planned to have 100 outlets by 2015, throughout the country.

Working dinners have become more and more popular in Vietnam, and as a result many restaurants have openedto meet the high demand for eating out. In fact, most restaurants, from high-class to low-end, are crowded atnight. They sell not only food but also drinks including beer, soft drinks and other alcohol. This trend continuesto grow.

Thirty-somethings also, of course, use mobile phones and motorbikes, although for them the onus is not onfashion, but on social status. Thus they will change their mobile less often than those in their twenties, but the

handsets that they use will be more expensive or even high-end. The same is true for motorbikes. Therefore, forthis consumer segment, mobile providers usually look to sell Nokia E or N series, or Apple phones, whilemotorcycle vendors favour SH, Dylan and Piaggio brands for this age group. Value sales from this age groupare high and sustainably so, while the market segment is predicted to expand along with the number of thirty-somethings over coming years.

The clothing market for this age group is diverse, as there is demand for work clothes, party clothes, clothes forspecial occasions (such as weddings), and leisure clothes. Manufacturers find it easy and worthwhile, therefore,to cater for this broad demand.

Middle-aged Adults

There were 19.8 million middle-aged Vietnamese in 2009, an increase of 18.1% on 2005. As a result of family

planning programmes, the Vietnamese population is entering an ageing trend, with middle-aged Vietnameseexpected to increase by a large 37.6% over the forecast period, reaching 28.3 million in 2020.

Middle-aged adults tend to be more wary in their decision-making, although otherwise they share many of thecharacteristics of thirty-somethings. By contrast, they look to reinforce their status in society through theirconsumer decisions. With many years of employment and establishing relationships, they may have becomeexpert in a particular area, they may be executives or even own their own business. Most successfulbusinessmen are of around this age.

Being important decision-makers in both their families and businesses, middle-aged adults have the highestspending power of all groups, impacting purchases not only by their children, but also possibly by theirgrandchildren. This age group spends not only on consumer durables, but also on real estate and investments.An increasing trend in recent years has been for the more successful and wealthy members of this age group to

send their children to study abroad.

Middle-aged adults use their free time to eat out with friends or business associates, but less regularly than thosein their thirties. Equally, they may travel with their families on holiday or go to the theatre at the weekend.

Impact

Middle-aged adults are careful when spending money, looking at value for money, even if the item is expensive.Popular items in this category in Vietnam are LCD TVs and home cinema systems. However, most middle-agedadults are concentrating on saving money for their old age.

While lower age groups buy motorcycles, middle-aged adults have started to buy cars, despite the failings of theroad network. In recent years, despite the financial crisis worldwide, this market has been developing rapidly

and the Vietnamese no longer just buy domestically manufactured cars, but also imported luxury models.


18/74



Older Population

Vietnam has a young population due to a high birth rate, thus the older population numbered 4.9 million in2009, an increase of 5.9% over the review period. However, as with the middle-aged group, owing to the highnumbers of younger groups, the older population of Vietnam is expected to increase significantly over the

forecast period, rising by 41.0%, to reach 7.0 million in 2020.

Most Vietnamese over 65 years old are retired, although some continue to work as advisers or run their ownbusinesses. Therefore, most are not earning. Former public sector workers receive a retirement pension, butother older Vietnamese rely on their children to support them; as a result, their spending power is not high.

The older population usually stays at home, helping their children to look after the house and children.Normally, they gather in groups to do exercises in the early morning in parks, or even in the road.

Impact

As older Vietnamese rely on their savings or pensions, they are extremely careful about spending money. As itis traditionally seen as their childrens responsibility to support them in old age, it is often the case that older

people need spend nothing, as their children make all the necessary purchases.

However, this age group is the target of insurance companies. In order to remove the worries of old age, someVietnamese purchase insurance packages for their parents, and insurance companies have expanded sales of lifeinsurance products in recent years.

Table 1 Consumer Segmentation: 2005-2009

'0002005 2006 2007 2008 2009 % Growth

Babies/Infants (0-2 4,957 4,968 4,913 4,819 4,728 -4.6years)

Kids (3-8 years) 8,973 8,935 9,036 9,219 9,404 4.8Tweenagers (9-12 years) 6,996 6,789 6,550 6,314 6,122 -12.5Teens (13-19 years) 12,790 12,809 12,751 12,620 12,427 -2.8People in their twenties 15,435 15,728 16,035 16,349 16,659 7.9People in their thirties 12,657 12,881 13,113 13,352 13,594 7.4Middle-aged Adults (40- 16,762 17,496 18,245 19,009 19,790 18.164 years)Older Population (65+ 4,628 4,695 4,763 4,832 4,902 5.9years)Source: National statistics, Euromonitor International

Table 2 Consumer Segmentation: 2010-2020

'0002010 2015 2020 % Growth

Babies/Infants (0-2 years) 4,670 4,714 4,542 -2.7Kids (3-8 years) 9,531 9,437 9,376 -1.6Tweenagers (9-12 years) 6,006 6,313 6,301 4.9Teens (13-19 years) 12,182 10,694 10,960 -10.0People in their twenties 16,957 17,880 16,499 -2.7People in their thirties 13,838 15,136 16,743 21.0Middle-aged Adults (40-64 years) 20,589 24,683 28,338 37.6Older Population (65+ years) 4,973 5,515 7,009 41.0Source: National statistics, Euromonitor International

PEOPLE


19/74



Population

Vietnam has a large population, estimated at 87.6 million in 2009, an increase of 5.3% from 2005. Vietnamranks as the third largest population in the Association of Southeast Asian Nations (ASEAN) and 13th in the

world, according to the GSO. Vietnam was expected to continue to grow at a rate of 12.4% from 2010, reaching99.8 million people in 2020.

The Vietnamese population is young, with a median age of 26.4 in 2009. However, this median age has beenrising gradually following several decades of the family planning programme, and it is estimated that the medianage was expected to reach 31.2 by 2020. According to the results of a population survey carried out by the GSOin 2009, the Vietnamese ageing rate, calculated by the number of those above 60 years old against those below15 years old, has been increasing, with the ageing rate in 2009 at 35.9% an increase of 11.4 percentage pointsfrom 1999.

Owing to the gradual changes towards gender equality in the country, the proportion of males to females isnearly balanced. In 2009 there were 43.8 million males and almost the same number of females in the country.

According to the population survey conducted by the GSO in 2009, Vietnam had an earning population twice aslarge as its dependent group. The results included the fact that the proportion of under 15s had fallen from 33%in 1999 to 25% in 2009, while the proportion of 15-59 year-olds had increased from 58% in 1999 to 66% in2009, and over 60s had increased from 8% in 1999 to 9% in 2009. This advantageous population ratio onlyhappens for one generation, stretching from 15 to 40 years, depending on how well the birth rate is controlled.

The survey also revealed that the life expectancy of the Vietnamese had improved during 1999-2009. Theaverage life expectancy for males had increased from 66.5 years old in 1999 to 70.2 years in 2009. Meanwhile,the life expectancy for females had increased from 70.1 years old in 1999 to 75.6 years old in 2009. This wasdue to successful healthcare programmes conducted during the previous 10 years.

There are 54 ethnic groups in Vietnam, of which Vietnamese accounted for 74.9% of the total population. Asthe Vietnamese tend to be better educated, they have also embraced a more modern lifestyle than other ethnic

groups, resulting in a more controlled birth rate; this has had the effect of lowering the growth rate ofVietnamese compared with all other ethnic groups.

Impact

Despite improvements to living standards in recent years, Vietnam remains a poor country with a largepopulation. The majority of Vietnamese incomes is spent on food and other necessities. However, with a largeearning population, Vietnam has enormous potential as a market, with high rates of spending opening ever-moreconsumer opportunities.

While foreign investors explore the domestic market, domestic manufacturers have been ignoring it, focusing onexports as a result of a national development strategy to increase exports for economic development. However,the fact that national economic growth has relied on exports has made the country heavily dependent on foreign

markets, feeling the knock-on effect of downturns such as the recent financial crisis. Vietnamese manufacturershave found it difficult to turn to domestic markets in an attempt to stabilise sales.

Marital Status

Marriage is seen as one of the key life decisions for a Vietnamese, with its accompanying move into a new stageof life. There were an estimated 39.7 million married people in Vietnam in 2009, accounting for 45.2% of thepopulation.

In the past, people got married when they were very young, with average ages at first marriage for women of 13and for men of 16. However, Vietnamese law has changed, owing to medical concerns about the effects of suchearly marriages, and nowadays women can marry from the age of 18 and men from the age of 20.

The tendency of the younger generations now is to get married whenever they are in a stable job and earningenough money to support their family life. The average age of first marriage has been increasing and marriage at


20/74



the age of 25-30 is popular in urban areas, while the age for first marriage in rural areas may be under 25. Onaverage, the age of men at first marriage in 2009 was 23.0 years old, while that of women was 21.7.

Traditionally, marriage must be approved by the couples parents, as it is not only a serious commitmentbetween the couple, but also between the two families. While parents can still present an obstacle to marriage ifthey disagree with the couples decision to wed, more independent, modern couples are getting married withouttheir parents consent. Because marriage today is made official by the registration of a certificate issued by theGovernment, these marriages are legal.

However, two trends have emerged in recent years. The first is that some couples choose to live together beforegetting married. Most of these are either students or those starting out in their careers. The second is singleparenthood. Recently, a number of movie stars and singers have become single mothers, which has had animportant influence on the younger generation. However, despite a noted rise in co-habitation and single-motherhood, society still tends to view these as negative developments.

The average age for women having their first child has also been increasing in Vietnam in recent years. This ispartly owing to an increase in the average age of marriage, but equally, more liberated women do not want tohave children quickly, as they wish to focus on their career and higher studies.

Modern, liberated lifestyles have resulted in a higher divorce rate in recent years. The demise of the moretraditional family lifestyle, with activities bringing all family members together, have been replaced by an urgeto make money, have a successful career and, in the case of the children, study hard. Time spent as a family hasfallen, with consequential break-ups. In the past, divorce was seen as a serious problem for society, butnowadays it is becoming more familiar and less serious.

Impact

Wedding ceremonies are increasingly expensive, as incomes have not increased in line with inflation. However,it is practically compulsory to have a wedding ceremony in two parts: part one is the traditional ceremony heldat home with relatives of the two families; part two is a wedding party organised in a restaurant or hotel forrelatives, friends and work colleagues. Organising a wedding party takes an enormous amount of time, which is

problematic for a couple who both work; thus, event companies and a wedding industry has appeared andrapidly grown in recent years to help couples to simplify their wedding plans. This is now a lucrative industry inVietnam.

Co-habitation is often a consequence of the couple not having enough money to pay for a wedding ceremony,nor buy their own home. The couple therefore ofte

Emi Vn Consumer Lifestyles 10

Documents

Transcript of Emi Vn Consumer Lifestyles 10