Consumer Lifestyles - Vietnam

Euromonitor International November 2010

Consumer Lifestyles

Vietnam

List of Contents and Tables

Structure of the Report........................................................................................................................................... 1 Consumer Trends.................................................................................................................................................... 1 the Majority Are Spending Less, While A Few Are Spending More .......................................................................... 1 the Young Generation Are the Most Powerful Consumers ........................................................................................ 2 Promotion of Products Made in Vietnam .................................................................................................................. 3 Hi-tech Consumers.................................................................................................................................................... 4 A Poor Country, But A Profitable Market for High-end Cars................................................................................... 5 Consumer Segmentation......................................................................................................................................... 6 Babies and Infants..................................................................................................................................................... 6 Kids ........................................................................................................................................................................... 7 Tweenagers ............................................................................................................................................................... 8 Teens ......................................................................................................................................................................... 9 Twenty-somethings...................................................................................................................................................10 Thirty-somethings ....................................................................................................................................................11 Middle-aged Adults ..................................................................................................................................................12 Older Population .....................................................................................................................................................13 Table 1 Consumer Segmentation: 2005-2009................................................................................13 Table 2 Consumer Segmentation: 2010-2020................................................................................13 People ......................................................................................................................................................................13 Population................................................................................................................................................................14 Marital Status ..........................................................................................................................................................14 Town Or Country .....................................................................................................................................................15 Table 3 Population by Age: 2005-2009 .........................................................................................16 Table 4 Population by Age: 2010-2020 .........................................................................................16 Table 5 Male Population by Age: 2005-2009 ................................................................................17 Table 6 Male Population by Age: 2010-2020 ................................................................................17 Table 7 Female Population by Age: 2005-2009 ............................................................................17 Table 8 Female Population by Age: 2010-2020 ............................................................................17 Table 9 Population by Ethnic Groups: 2005-2009.........................................................................18 Table 10 Population by Ethnic Groups: 2010-2020.........................................................................18 Table 11 Population by Marital Status: 2005-2009 .........................................................................18 Table 12 Population by Marital Status: 2010-2020 .........................................................................18 Table 13 Marriage and Divorce Rates/Average Age at First Marriage: 2005-2009 ........................18 Table 14 Population by Urban/Rural Location and Population Density: 2005-2009.......................19 Table 15 Population by Urban/Rural Location and Population Density: 2010-2020.......................19 Table 16 Population by Major Cities: 2005-2009............................................................................19 Table 17 Population by Major Cities: 2010-2020............................................................................19 House and Home ....................................................................................................................................................20 Households by Annual Disposable Income ..............................................................................................................20 Households by Number of Occupants ......................................................................................................................20 Single-person Households........................................................................................................................................21 Couples Without Children ........................................................................................................................................21 Couples With Children .............................................................................................................................................22 Single-parent Families .............................................................................................................................................22 Table 18 Annual Disposable Income per Household (Current Value): 2005-2009 .........................22 Table 19 Annual Disposable Income per Household (Constant 2009 Value): 20102020 ..................................................................................................................................23

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Table 20 Households by Number of Persons: 2005-2009 ...............................................................23 Table 21 Households by Number of Persons: 2010-2020 ...............................................................23 Table 22 Households by Type: 2005-2009 ......................................................................................23 Table 23 Households by Type: 2010-2015 ......................................................................................24 Home Ownership .....................................................................................................................................................24 Running Costs ..........................................................................................................................................................25 Shopping for Household Goods ...............................................................................................................................26 Possession of Household Durables ..........................................................................................................................27 DIY and Gardening ..................................................................................................................................................27 Pet Ownership..........................................................................................................................................................28 Table 24 Households by Tenure: 2005-2009 ...................................................................................28 Table 25 Households by Tenure: 2010-2020 ...................................................................................29 Table 26 Running Costs: 2005-2009 ...............................................................................................29 Table 27 Possession of Household Durables: 2005-2009 ................................................................29 Table 28 Possession of Household Durables: 2010-2020 ................................................................29 Table 29 Pet Population: 2005-2009 ...............................................................................................30 Income .....................................................................................................................................................................30 Average Income .......................................................................................................................................................30 Average Income by Age............................................................................................................................................30 Table 30 Annual Gross and Disposable Income (Current Value): 2005-2009.................................30 Table 31 Annual Gross and Disposable Income (Constant 2009 Value): 2005-2009 ......................31 Table 32 Annual Gross and Disposable Income (Constant 2009 Value): 2010-2020 ......................31 Table 33 Average Annual Gross Income by Age (Current Value): 2005-2009 ...............................31 Table 34 Average Annual Gross Income by Age (Constant 2009 Value): 2005-2009 ....................31 Consumer Expenditure..........................................................................................................................................32 Living Costs .............................................................................................................................................................32 Table 35 Consumer Expenditure by Broad Category (Current Value): 2005-2009 .........................33 Table 36 Consumer Expenditure by Broad Category (Constant 2009 Value): 20052009 ..................................................................................................................................33 Table 37 Consumer Expenditure by Broad Category (Constant 2009 Value): 20102020 ..................................................................................................................................33 Work .......................................................................................................................................................................34 Working Conditions .................................................................................................................................................34 Commuting ...............................................................................................................................................................34 Working Women .......................................................................................................................................................35 Alternative Work Options.........................................................................................................................................35 Retirement ................................................................................................................................................................35 Unemployment .........................................................................................................................................................36 Table 38 Employed Population: 2005-2009 ....................................................................................36 Table 39 Employed Population: 2010-2020 ....................................................................................36 Table 40 Unemployed Population: 2005-2009 ................................................................................36 Table 41 Unemployed Population: 2010-2020 ................................................................................37 Learning ..................................................................................................................................................................37 School Life ...............................................................................................................................................................37 University Life..........................................................................................................................................................38 Adult Learning .........................................................................................................................................................39 Table 42 School Students: 2005-2009 .............................................................................................39 Table 43 Graduates: 2005-2009 ......................................................................................................39 Table 44 Higher Education Students: 2005-2009 ............................................................................40 Eating (including Soft Drinks) ..............................................................................................................................40

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Shopping for Food and Drinks .................................................................................................................................40 Dining in ..................................................................................................................................................................41 Dining Out ...............................................................................................................................................................42 Caf Culture.............................................................................................................................................................43 Table 45 Consumer Expenditure on Food (Current Value): 2005-2009 ..........................................43 Table 46 Consumer Expenditure on Food (Constant 2009 Value): 2005-2009 ...............................44 Table 47 Consumer Expenditure on Food (Constant 2009 Value): 2010-2020 ...............................44 Table 48 Consumer Foodservice by Type (Current Value): 2004-2008 ..........................................44 Table 49 Consumer Foodservice by Type (Constant 2008 Value): 2004-2008 ...............................45 Drinking ..................................................................................................................................................................45 Drinking Habits .......................................................................................................................................................45 Shopping for Alcoholic Beverages ...........................................................................................................................46 Table 50 Consumer Expenditure on Alcoholic Beverages and Tobacco (Current Value): 2005-2009 ............................................................................................................47 Table 51 Consumer Expenditure on Alcoholic Beverages and Tobacco (Constant 2009 Value): 2005-2009 ............................................................................................................47 Table 52 Consumer Expenditure on Alcoholic Beverages and Tobacco (Constant 2009 Value): 2010-2020 ............................................................................................................47 Smoking ..................................................................................................................................................................47 Smoking Habits ........................................................................................................................................................47 Shopping for Cigarettes and Tobacco ......................................................................................................................48 Table 53 Smoking Prevalence: 2005-2009 ......................................................................................49 Personal Appearance .............................................................................................................................................49 Shopping for Toiletries and Cosmetics ....................................................................................................................49 Attitudes Towards Hair and Beauty .........................................................................................................................49 Table 54 Expenditure on Cosmetics and Toiletries (Current Value): 2005-2009 ............................50 Table 55 Expenditure on Cosmetics and Toiletries (Constant 2009 Value): 2005-2009 .................50 Fashion ....................................................................................................................................................................51 Fashion Trends ........................................................................................................................................................51 Shopping for Clothes, Shoes and Luxury Goods ......................................................................................................52 Table 56 Consumer Expenditure on Clothing and Footwear (Current Value): 20052009 ..................................................................................................................................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...............................................................................................................................................53 Healthcare ...............................................................................................................................................................53 Health and Well-being .............................................................................................................................................54 Sport and Fitness .....................................................................................................................................................55 Nutrition ...................................................................................................................................................................56 Home Medication and Vitamins ...............................................................................................................................56 Table 59 Health Expenditure: 2005-2009 ........................................................................................57 Table 60 Healthy Life Expectancy at Birth: 2005-2009 ..................................................................57 Table 61 Obese and Overweight Population: 2005-2009 ................................................................57 Table 62 Consumer Expenditure on Health and Wellness (Current Value): 2005-2009 .................57 Table 63 Consumer Expenditure on Health and Wellness (Constant 2009 Value): 2005-2009.........................................................................................................................58 Leisure and Recreation ..........................................................................................................................................58 Staying in .................................................................................................................................................................58

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Going Out ................................................................................................................................................................58 Public Holidays, Celebrations and Gift-giving Occasions.......................................................................................59 Culture .....................................................................................................................................................................59 Holidays ...................................................................................................................................................................60 Table 64 Household Possession of Cable TV and Satellite TV: 2005-2009 ....................................60 Table 65 Household Possession of Cable TV and Satellite TV: 2010-2020 ....................................61 Table 66 Consumer Expenditure on Package Holidays (Current Value): 2005-2009......................61 Table 67 Consumer Expenditure on Package Holidays (Constant 2009 Value): 20052009 ..................................................................................................................................61 Table 68 Consumer Expenditure on Package Holidays (Constant 2009 Value): 20102020 ..................................................................................................................................61 Consumer Technology ...........................................................................................................................................61 In-home Technology.................................................................................................................................................61 Portable Technology ................................................................................................................................................62 E-commerce and M-commerce ................................................................................................................................63 Table 69 Household Possession of Broadband Internet-Enabled Computers, DVD Players and Video Game Consoles: 2005-2009 ................................................................63 Table 70 Household Possession of Broadband Internet-Enabled Computers, DVD Players and Video Game Consoles: 2010-2020 ................................................................63 Table 71 Household Possession of Mobile Telephones: 2005-2009 ...............................................63 Table 72 Household Possession of Mobile Telephones: 2010-2020 ...............................................64 Transport ................................................................................................................................................................64 Getting Around ........................................................................................................................................................64 Air Travel .................................................................................................................................................................65 Table 73 Household Possession of Passenger Vehicles: 2005-2009 ...............................................65 Table 74 Household Possession of Passenger Vehicles: 2010-2020 ...............................................65 Table 75 Consumer Expenditure on Transport Services (Current Value): 2005-2009 ....................66 Table 76 Consumer Expenditure on Transport Services (Constant 2009 Value): 20052009 ..................................................................................................................................66 Table 77 Consumer Expenditure on Transport Services (Constant 2009 Value): 20102020 ..................................................................................................................................66 Money......................................................................................................................................................................66 Savings .....................................................................................................................................................................66 Loans and Mortgages...............................................................................................................................................67 Credit .......................................................................................................................................................................67 Table 78 Savings and Savings Ratio: 2005-2009 ............................................................................68 Table 79 Consumer Loans, Mortgages and Credit (Current Value): 2005-2009 .............................68 Table 80 Consumer Loans, Mortgages and Credit (Constant 2009 Value): 2005-2009 ..................68 Table 81 Financial Cards in Circulation: 2005-2009 .......................................................................69

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CONSUMER LIFESTYLES IN VIETNAM

STRUCTURE OF THE REPORT
This report forms part of the report series that complements the Euromonitor International Countries and Consumer 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 statistics offices. 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 and official pan-regional and global sources. Furthermore, Euromonitor International has undertaken an extensive amount 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 in the data, which were not reconcilable in every instance. Even when data are produced on specific parameters by the same national statistical office, such as total population in a particular year, discrepancies can occur depending on whether the data were derived from a survey, a national census or a projection and whether the data 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 are presented for 2010, 2015 and 2020.

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

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Impacted by economic fluctuations and the worldwide financial crisis, Vietnam is facing tougher economic times alongside other countries. As a result, Vietnamese consumers are generally becoming more careful when making purchases, only spending money on necessary items. Some choose to travel further to find a cheaper price. According to Vietnamese newspaper, The Labourer, almost 80% of the Vietnamese population claim to be spending less, of which 20% are the poorest segment of the population whose spending only accounts for 7.2% of the countrys consumption. Meanwhile, the wealthiest 20% of the population are responsible for 43.3% of total consumption. This small section 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 (around US$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 to increase. Thus most Vietnamese consumers will become poorer, as salaries will not increase at the same rate as inflation. 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 in internationally famous brand names. Their high incomes mean that this section of the population does not pay attention to product prices when making a purchase, and the growth rate of spending by this group is expected to increase rapidly in coming years. Impact Vietnamese are estimated to spend more than 40% of their income on food, according to the Vietnam Household Standard Living Survey 2008, conducted by the General Statistics Office (GSO). The Government aims to stabilise food prices to protect the lives of the population, thus the market for food is likely to continue its 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 fisheries sectors, the price of fresh foods such as vegetables, meat and seafood is cheaper than that of processed and packaged versions. On the other hand, in the current economic climate, visiting the market every day is favourable when prices are fluctuating. It is likely, therefore, that fresh food will continue to be favoured by the majority of the population for the foreseeable future. With high incomes that are growing rapidly as a share of total expenditure, the wealthier section of Vietnamese are being targeted by high-end international brands, in particular clothes, shoes, handbags and cosmetics. This has 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 the number 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 are typical characteristics of this group and it is said that they not only create consumer trends and the market for the goods that they demand, but that they also impact on the consumption psychology, behaviour and demands of other consumer age groups in society. This consumer group tends to go shopping quite regularly, on average weekly or fortnightly. Prices are not a major consideration: if this consumer likes a product, they will buy it. With financial independence and dedication to receiving and spreading information rapidly through the mass media and internet, they confidently establish 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 on internet forums, even bringing about boycotts of products through complaints online. They are confident buyers who 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.

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Product quality is not deemed an essential criterion, as there is a standing assumption that all products should be of high quality. Instead, these consumers pay attention to a products design, style, material, function and characteristics. Great attention is also given to quality of service received when buying: the aesthetics of the store, 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 fastidious consumers. Outlook Vietnam has a young population and the countrys relatively high birth rate means that the younger segment is going to continue to account for a major share in the countrys population. Vietnam is also currently at a golden 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 to fashion styles of other countries, such as South Korea and Japan, for their inspiration and as a result, the clothing 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, so when Vietnamese television shows lots of Korean movies, the younger generation shows a preference for Korean make-up techniques, which impact on demand and sales of cosmetics. In consequence, in addition to the popular brands of Revlon, LOral and Shiseido, the cosmetics market has welcomed Korean products including OHUI, 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 latest models 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 larger cities. With an increasing number of young people using a laptop or netbook for studying, working or entertainment, access to the internet for downloading information, communicating and shopping online while on-the-go is seen as increasingly, and critically important. As a result, coffee shops offering wi-fi access are increasing in popularity.

Promotion of Products Made in Vietnam

The Vietnamese market has been flooded for years with Chinese-made or Chinese-grown products, including vegetables, 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 textiles and garments. It is estimated that Chinese products account for around 60%-80% of the market and Vietnamese producers cannot compete, owing to higher production costs. Owing to trade liberation rules applied since Vietnam became the 150th member of the World Trade Organization (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 a campaign to encourage them to buy products made in Vietnam. This campaign has been running for several years, but it was heavily emphasised in early 2010. At the Governments encouragement, many retailers have been trying to introduce and deliver Vietnamese products 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 choose them. Simultaneously, in conjunction with producers, they have organised promotional programmes to reduce

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domestic product prices. Moreover, retailers such as Saigon Co-op deliver Vietnamese products by van to customers in rural areas. Meanwhile, a consumer product survey called high-quality Vietnamese products, conducted by Saigon Tiep Thi magazine each year, has attracted a lot of attention from the mass media, informing consumers of the results, and it has become a reliable source of information on which consumers often rely when making a purchase. Fortunately for the domestic market, the number of Vietnamese products voted for by consumers has increased over time, with brand names showing success including An Phuoc, Viet Tien, Vinasoy, Hung Phat Tea, Trung Nguyen Coffee, Vinh Hao Mineral Water, Tribeco, Vinacafe, Dai Dong Tien Plastic, Duy Tan Plastic, Cholimex, Tuong An and My Hao. Based on this survey, many trade fairs have been organised in provinces 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 the country 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 Vietnamese Government 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 a movement towards domestic product purchases, especially in rural areas. The Government will continue to encourage Vietnamese consumers to use domestic products. However, despite efforts made by the Vietnamese Government and manufacturers, many Vietnamese consumers still buy Chinese goods, even where they know the Chinese products to be of lower quality. This is mainly because they are very cheap and thus more affordable for the majority of Vietnamese. Moreover, Chinese products 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 of Vietnamese 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, while Viet Tien, An Phuoc and Nha Be are popular Vietnamese mens wear and accessories brands and OXY, Moc Mien, Sifa Fashion, NEW and Senorita are equally popular with women. Additionally, young fashion designers are winning customers with well-designed Vietnamese clothes. Tea and coffee are two products with which Vietnamese producers can compete against China to win Vietnamese 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 international markets. Vietnamese coffee is best known through Trung Nguyen Coffee, not only for its coffee products but also its franchise of coffee shops, while another Vietnamese coffee brand is Vinacafe. With regards to tea, Tam Chau 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 Huong Fish 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 Vietnamese consumers for some years. Vietnam has had a high growth rate of internet users in recent years. Owing to cheap connection fees, the number 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,

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and an increase of 112.7% from 2005. With this number of internet users, Vietnam has been ranked seventh among countries in Asia by Internet World Stats. Vietnam also has one of the most rapidly growing mobile phone markets in the world. According to the Ministry of Information and Communication, there were 135.3 million telephone users in January 2010, an increase of 62.3% on the same period of the previous year, among whom were 115.7 million mobile phone subscribers, 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 significant increase from 7.5% in 2005. For Vietnamese consumers, mobile phones are not just a means of communication, but are also a fashion statement and demonstration of ones social status. A small proportion of Vietnamese consumers are willing to pay significant amounts of money for expensive mobile devices, as a result of which Vietnam is considered a prime market for smart phones such as the iPhone, HTC and BlackBerry devices. Smart phones are currently estimated 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 significantly over 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 expected to 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 of use, 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 laptop producers have been cutting their prices to make their products more affordable for the majority of Vietnamese users, 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 an important 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 in recent 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 has encouraged the development of e-commerce. Although e-commerce in Vietnam is in the early stages, it is becoming 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, as they are not affordable and the roads in Vietnam are unsuitable. However, there is a paradox here, which is that the prices at which cars are sold in Vietnam are said to be some of the highest in the world, despite the fact that Vietnam is one of the poorest countries. This is mainly because of the Governments protection of the countrys infant automobile industry. However, a small number of high-income earners are willing to pay the high price demanded, 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% on the previous year according to the Department of Land Transportation Police. With a population of more than 86 million people, the number of cars is indeed a tiny one, with a rate of 8 cars per 1,000 inhabitants.

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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 and expensive cars in the world, such as Rolls Royce, Bentley, BMW and Mercedes, valued at hundreds of thousands 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 Rolls Royce Phantoms, more than 20 Bentleys and seven BMW X6s (the latter after its launch in the USA in April 2008). Outlook Since 2007, when the Vietnamese stock market and real estate become very hot, there has been a newly emerging high-income group. These individuals invest in luxury cars, not merely as a means of transport, but as a status symbol. The demand for the most luxurious of cars by Vietnamese high earners is predicted to increase over 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 cars would 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 facing difficulties 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 two stages, 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 has fallen significantly over the past 10 years. According to the National Population Survey conducted by the GSO in April 2009, the birth rate in that year was two infants per female, which was lower than the 2.3 infants/female in 1999. Owing to the Programme, the number of babies born in Vietnam has been decreasing continuously during 2005-2009, and it was estimated that there were 4.7 million babies and infants in Vietnam in 2009, a fall of 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 average family income in Vietnam have increased, the number of children in each household has fallen. Whereas in the past, especially in rural areas, one couple might have had 10 or more children and thus not have had enough time and money to take good care of all of them, the situation is now significantly altered, with most babies being 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 growing baby might help the new-born, so mothers-to-be usually ask their relatives or friends for old clothes before giving birth, and they do not use new clothes for the new-born baby. However, the belief is gradually changing and although some families in rural areas still follow this tradition, most Vietnamese mothers now just ask for a few 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 being used in Vietnam. A higher living standard, higher disposable incomes and lifestyle changes have moved parents towards the convenience of modern baby-care products such as food-makers, training cups, baby strollers and buggies, baby walkers, car seats and breast pumps. Despite having fewer babies, the busier lifestyles and higher ambitions of Vietnamese women have resulted in an increase in bottle feeding for babies, especially in big cities such as Ho Chi Minh City or Hanoi, although breast feeding is still generally encouraged.

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Parents also now tend to send their babies to crches sooner, especially those living in urban areas. According to the Labour Code, women can take four months off after giving birth, after which some of them ask for two more months off without salary. For those whose parents cannot help them to take care of the baby or who cannot find domestic 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 Governments family planning programme, related markets have been growing substantially due to changes in consumer habits and perception. In the past, the Vietnamese had to make clothes and other things related to caring for a baby, but they now usually use ready-made products to save time. More players have joined the baby clothing market, selling colourful, 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 are rarely chosen by Vietnamese consumers due to higher prices or concern about materials used to make Chinese products. As textiles and garments are one of Vietnams comparatively advantageous markets, and owing to the sustainable 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 disposable nappies were imported from other countries such as Thailand or Taiwan. However, most families now using disposable nappies for their babies, use domestically produced nappies. Vietnamese consumers have also become familiar with well-known brands such as Huggies, Pampers, Bobby, Nannys and Zuno, and these products have become so popular that the three producers involved have won and retained significant market share 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 for such products remains small and mostly imported from abroad. In Ho Chi Minh City, MBCare Group has been successful 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, as transport in Vietnam discourages the use of such products, so this will be a slowly growing market in coming years. The fact that fewer women are breast feeding their babies has created an opportunity for powdered milk producers and helped this market grow sharply in Vietnam in recent years. There are many brands of powdered milk for each stage of a childs growth, including Friso, Similac, Meiji, Dumex, Lactogen, Dutch Lady and Vinamilk. Manufacturers are working hard to persuade female consumers to trust their products for babies and this 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, such as 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 of toy is suitable for which age. There are several retailers focusing on high-income consumers, who can afford to care about the quality of the toys for their babies, such as MBCare Group, Rainbow and World of Toys, which sell 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 each family 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 to have a third child and accept the punishment from the Government for this. Therefore, the number of kids of three to eight years old increased by 4.8% during the review period of 2005-2009, and the number of kids is expected 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.

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With the increase in the number of kids, spending for this group has also risen. This is not only because of an increase 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 for toys in this group is high. Being a traditionally Eastern country, children are expected to listen to their parents without demur. However, a freer and more liberal lifestyle development in recent years in Vietnam has encouraged some children to give their opinions on what they like and what they think. Vietnamese children now to some extent can choose the products 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 even prevent the kids from watching too much TV. The parents are always watching their kids, even at home or on the way to and from school. Some kids in high-income families may have a computer on which they can play and 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 for Vietnamese parents and so there are no debates in the mass media on the subject. At the time of writing, there was 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 for around 60%-80% of the market. Vietnamese products cannot compete with Chinese products due to higher production costs. Consumers can buy clothes made in China for VND15,000 (less than US$1), with which price domestic manufacturers cannot compete. Equally, the Chinese products are well made and well styled in fashionable colours, while locally produced clothing tends to be simple and unattractive to kids, although several domestic brands have managed to build a positive image, including YF (Young Fashion), Viet Thy, Anh Thu, 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 high cost 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 domestic manufacturers ignore this market because they cannot compete with Chinese products in terms of cost or creativity. 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 as electronics, 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 a powerful 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 are requesting from their parents is changing accordingly. To ignore this development would be a mistake for domestic manufacturers, as they risk being blocked entirely from the market, as has happened in other product sectors.

Tweenagers
Vietnam has successfully implemented family planning since the 1990s; however, it is said that the result of the family 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

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was expected to rise by 4.9% from 2010, reaching 6.3 million tweenagers in 2020, due to an increase in the number of kids in the 2000s. This group has become more powerful in consumer terms in recent years, although parents are still the main decision-makers for consumption by tweenagers. The change has come about because this group has started to decide how to spend their pocket money, and this is an age group that is easily influenced by advertisements and personal recommendations (such as from friends). Normally, the money spent by this age group comes from parents. In most families, the parents give pocket money to the children monthly or weekly (a few give it daily). The amount of money that parents give their children depends on the familys income. Pocket money is usually enough to allow the tweenagers to buy sweets, cakes, or snacks for themselves and their friends during break time at school. There is no current survey data 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 areas such as Ho Chi Minh City. The argument given is usually that of convenience for the parents to be able to contact the tweenagers if need be. Besides making and receiving calls, this group may use mobile phones to play games 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 the time they start school at six years old. The higher the grade, the heavier the educational workload and the less time allowed for entertainment. Learning is required even during the summer holiday and sometimes it seems as if children have forgotten playtime. Even when tweenagers have playtime, the leisure activities available are poor, with traditional games such as skipping, hide and seek, etc. falling, especially in urban areas, where playgrounds are less common. In free time tweens may choose to watch TV, play computer games, go shopping or to the theatre with their parents. In Ho Chi Minh City, many kids, tweenagers and teenagers enjoy the TV drama series, Ngay xua ngay xua (Once Upon a Time), which relates fairytales. Impact Demand for clothes in this age group is high and tweenagers can influence their parents decisions on clothing purchases. Here, as with kids, Chinese-made goods are dominant, as they provide fashionable and attractive clothing for the age group. This age group is easily influenced by advertising, and it is targeted through television Milk producers are a good example here: since milk is deemed a necessary nutritional item, if children persuade their parents to buy milk 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 have started 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. Although the impact of this programme did not result in such significant decreases as for current tweenagers, it did reduce the growth rate by 2.8% from 2005, to 12.4 million teens in 2009. Over coming years, as the tweenagers become teenagers, this growth rate will continue to decline, by 10% to 2020, when there will be nearly 11 million teenagers. Of course, teenagers need money to meet their daily needs, and most Vietnamese parents give teenagers monthly 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.

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Some teenagers are quite mature and do not ask their parents for money, instead earning a wage in a part-time job, perhaps being a stylist, model, musician, writing articles or organising events. In Vietnam, where traditionally most children have relied on their parents until they become an adult, this is an interesting and positive 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 positive aspects of mobile phone use, such easy access to the internet (with the popular GPRS) has created some negative aspects. Teenagers are at an age where they are half mature, half child, and they tend to show off to get attention 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 fighting one-another. Teenagers today are more concerned with appearing attractive and fashionable, and they take more care over their appearance than previous generations. Vietnamese teenagers are significantly influenced by South Korean fashions and movie celebrities, and they thus use the cosmetics and imitate the hair styles (including dying their hair red or brown) popular in South Korea. Impact Teenagers are interested in fashion, and they shop for clothes, shoes and cosmetics. They may frequent shopping malls, stores or traditional markets. However, as yet there is no targeted market segment for teens in any of these three products, and there is no clear distinction in products for teens and for twenty-somethings. Clothing and footwear styles and brands for teens and those in their twenties are mixed together, which makes it easy for manufacturers to produce in bulk, but means that there is no differentiation for these two age groups. Despite this, as both groups look constantly for new styles and influences in fashion, the clothing and footwear market has 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 this technological freedom are emerging. Online retail is not regulated with regard to the age of shoppers, and combined 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 was predicted 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 the review period, to reach 16.7 million people in 2009. However, with decreasing numbers of teens, tweens and kids, 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 are said to be dynamic, creative, idealist, intelligent, independent and hard-working. At this age mature, twentysomethings start to work and earn money, make their own decisions, often for the first time, and choose what to wear, what to do and with whom to make friends. Because twenty-somethings are dynamic, they are early adopters of new technology. Laptops, netbooks, mobile phones and Bluetooth devices are popular with the 8X generation, for whom it is said that a mobile phone is one of their three indispensable belongings. It is estimated by the Ministry of Post and Telecommunication that there are 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 status symbols. The other two indispensable items for an 8X-er are said to be a credit card and a USB storage device. An increasing number of twenty-somethings now use a credit card, mostly to shop online. With the ability to connect to the internet on their laptop via wi-fi in a coffee shop, 8X-ers can shop easily for books and other items, usually for cheaper prices. The USB stick is the 8X-ers mobile hard disk, on which they can exchange and store music, pictures, stories, educational files, working materials and books. The USB storage device is increasingly a complement to 8X-ers laptops or netbooks.

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Impact The rapid growth of the mobile phone market is put down to twenty-somethings, as their demand for communication 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 providers continuous special offers and discounts, mobile users can change their phone regularly, increasing the handset market. In addition to imported mobile phones of popular makes such as Nokia, Samsung, LG, BenQ-Siemens and 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 assembled them 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 or Hanoi. These outlets have also embraced e-commerce, selling phones and laptops online and providing additional services such as installing games, apps and software on phones and laptops for buyers. Some of the more 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 be taken 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 are mostly bought by twenty-somethings, as they are affordable, although some 8X-ers use brands such as IBMLenovo, Dell, Asus or the Apple MacBook. With their dynamic, high-tech image, 8X-ers have been driving the development of this market. Coffee shops are the most popular places for twenty-somethings to go when they have free time, to meet friends or business associates, or to relax. Coffee shops offering wi-fi internet access are thus in great demand and to meet it, coffee shops in larger cities such as Ho Chi Minh City or Hanoi have installed internet routers to provide wi-fi to their customers, have redesigned their shops with different areas for different activities, such as group gatherings in one area and workers in another. There are more and more coffee shops following this pattern 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-somethings start to earn their own money, they also need to have their own transport, and they often buy a motorbike to replace a bicycle or old motorbike given them by their parents when they were teenagers. Currently, there is a trend 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 they numbered 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, and are 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 public holidays. Traditionally, after work each day Vietnamese women do the housework and take care of their children (some may have domestic help), while the men go to coffee shops, restaurants, bars or pubs to meet their friends or business associates to maintain and build up social relationships. However, lifestyles are changing and a greater sense of freedom and equality for Vietnamese women has permeated the country, with traditional family life gradually changing. Working dinners and eating out with friends have reduced the number of family meals held, where all family members meet to eat and talk. As a result, the connection between husbands and wives, children and parents, has been changing, resulting in a higher divorce rate in Vietnam. Impact

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Although this age group has high spending power, they usually spend money on necessary goods. It is estimated by the GSO, from a survey on household living standards in 2008, that food accounted for more than 40% of a Vietnameses expenditure. Where the Vietnamese go to buy food and household items varies according to the different regions of the country. A survey on high-quality Vietnamese products conducted by Sai Gon Tiep Thi magazine in 2008 showed that 67.3% of southern Vietnam consumers chose to shop in supermarkets, while northern Vietnamese favoured specialist stores and the central and highland area consumers predominantly shopped in traditional markets. While traditional markets are everywhere in Vietnam, supermarkets have expanded their outlets widely to popularise these modern channels of consumption. The most successful supermarket in Vietnam is Saigon Coop, with its CoopMart. The Saigon Coop launched its 44th outlet in Da Nang 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 opened to meet the high demand for eating out. In fact, most restaurants, from high-class to low-end, are crowded at night. They sell not only food but also drinks including beer, soft drinks and other alcohol. This trend continues to grow. Thirty-somethings also, of course, use mobile phones and motorbikes, although for them the onus is not on fashion, 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, for this consumer segment, mobile providers usually look to sell Nokia E or N series, or Apple phones, while motorcycle vendors favour SH, Dylan and Piaggio brands for this age group. Value sales from this age group are high and sustainably so, while the market segment is predicted to expand along with the number of thirtysomethings over coming years. The clothing market for this age group is diverse, as there is demand for work clothes, party clothes, clothes for special 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 Vietnamese expected 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 the characteristics of thirty-somethings. By contrast, they look to reinforce their status in society through their consumer decisions. With many years of employment and establishing relationships, they may have become expert in a particular area, they may be executives or even own their own business. Most successful businessmen are of around this age. Being important decision-makers in both their families and businesses, middle-aged adults have the highest spending power of all groups, impacting purchases not only by their children, but also possibly by their grandchildren. 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 those in 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-aged adults 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 the road 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.

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Older Population
Vietnam has a young population due to a high birth rate, thus the older population numbered 4.9 million in 2009, an increase of 5.9% over the review period. However, as with the middle-aged group, owing to the high numbers 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 own businesses. Therefore, most are not earning. Former public sector workers receive a retirement pension, but other 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 it is 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, some Vietnamese purchase insurance packages for their parents, and insurance companies have expanded sales of life insurance products in recent years.
Table 1 '000 2005 Babies/Infants (0-2 years) Kids (3-8 years) Tweenagers (9-12 years) Teens (13-19 years) People in their twenties People in their thirties Middle-aged Adults (4064 years) Older Population (65+ years)
Source:

Consumer Segmentation: 2005-2009

2006 4,968 8,935 6,789 12,809 15,728 12,881 17,496 4,695

2007 4,913 9,036 6,550 12,751 16,035 13,113 18,245 4,763

2008 4,819 9,219 6,314 12,620 16,349 13,352 19,009 4,832

2009 4,728 9,404 6,122 12,427 16,659 13,594 19,790 4,902

% Growth -4.6 4.8 -12.5 -2.8 7.9 7.4 18.1 5.9

4,957 8,973 6,996 12,790 15,435 12,657 16,762 4,628

National statistics, Euromonitor International

Table 2 '000

Consumer Segmentation: 2010-2020

2010 Babies/Infants (0-2 years) Kids (3-8 years) Tweenagers (9-12 years) Teens (13-19 years) People in their twenties People in their thirties Middle-aged Adults (40-64 years) Older Population (65+ years)
Source:

2015 4,714 9,437 6,313 10,694 17,880 15,136 24,683 5,515

2020 4,542 9,376 6,301 10,960 16,499 16,743 28,338 7,009

% Growth -2.7 -1.6 4.9 -10.0 -2.7 21.0 37.6 41.0

4,670 9,531 6,006 12,182 16,957 13,838 20,589 4,973

National statistics, Euromonitor International

PEOPLE
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Population
Vietnam has a large population, estimated at 87.6 million in 2009, an increase of 5.3% from 2005. Vietnam ranks 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, reaching 99.8 million people in 2020. The Vietnamese population is young, with a median age of 26.4 in 2009. However, this median age has been rising gradually following several decades of the family planning programme, and it is estimated that the median age was expected to reach 31.2 by 2020. According to the results of a population survey carried out by the GSO in 2009, the Vietnamese ageing rate, calculated by the number of those above 60 years old against those below 15 years old, has been increasing, with the ageing rate in 2009 at 35.9% an increase of 11.4 percentage points from 1999. Owing to the gradual changes towards gender equality in the country, the proportion of males to females is nearly 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 as large 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% in 2009, and over 60s had increased from 8% in 1999 to 9% in 2009. This advantageous population ratio only happens 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. The average 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 was due 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. As the 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 of Vietnamese compared with all other ethnic groups. Impact Despite improvements to living standards in recent years, Vietnam remains a poor country with a large population. The majority of Vietnamese incomes is spent on food and other necessities. However, with a large earning population, Vietnam has enormous potential as a market, with high rates of spending opening ever-more consumer opportunities. While foreign investors explore the domestic market, domestic manufacturers have been ignoring it, focusing on exports 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 manufacturers have 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 stage of life. There were an estimated 39.7 million married people in Vietnam in 2009, accounting for 45.2% of the population. In the past, people got married when they were very young, with average ages at first marriage for women of 13 and for men of 16. However, Vietnamese law has changed, owing to medical concerns about the effects of such early 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 earning enough money to support their family life. The average age of first marriage has been increasing and marriage at

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the age of 25-30 is popular in urban areas, while the age for first marriage in rural areas may be under 25. On average, 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 commitment between the couple, but also between the two families. While parents can still present an obstacle to marriage if they disagree with the couples decision to wed, more independent, modern couples are getting married without their parents consent. Because marriage today is made official by the registration of a certificate issued by the Government, these marriages are legal. However, two trends have emerged in recent years. The first is that some couples choose to live together before getting married. Most of these are either students or those starting out in their careers. The second is single parenthood. Recently, a number of movie stars and singers have become single mothers, which has had an important influence on the younger generation. However, despite a noted rise in co-habitation and singlemotherhood, 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 is partly owing to an increase in the average age of marriage, but equally, more liberated women do not want to have 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 more traditional family lifestyle, with activities bringing all family members together, have been replaced by an urge to make money, have a successful career and, in the case of the children, study hard. Time spent as a family has fallen, with consequential break-ups. In the past, divorce was seen as a serious problem for society, but nowadays 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 held at home with relatives of the two families; part two is a wedding party organised in a restaurant or hotel for relatives, 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 and rapidly grown in recent years to help couples to simplify their wedding plans. This is now a lucrative industry in Vietnam. 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 often rent an apartment or even just some rooms for this trial marriage stage. This developing trend has impacted the housing market for rentals in recent years.

Town Or Country
Being an agricultural economy, almost 72% of the Vietnamese population live in rural areas. It is estimated that there are 62.7 million people living in rural areas, having increased by 2.6% from 2005. The positive growth here is generally as a consequence of high birth rates in these areas. Meanwhile, the process of urbanization has turned some rural areas into cities, such as Tuyen Quang Town and Tra Vinh Town, which had become Tuyen Quang City and Tra Vinh City by 2010, while some cities have incorporated their rural outlying areas in their expansion, including Hanoi and Ha Tay becoming new Hanoi in 2008. Industrialization has created a wave of migrants from rural to urban areas, increasing the urban population enormously. It is estimated that the population in urban areas in 2009 had increased by 12.8% from 2005, reaching 24.9 million. According to the GSO population survey in 2009, the south-east areas had the highest level of urbanization, with 57.1% of the population living in urban areas. The next highest urban population was in the Red River Delta, with 29.2% population living in urban areas. The survey also revealed that some cities and provinces had population growth rates more than two times higher than the countrys average growth rate during 1999-2009. These included Binh Duong Province, Ho Chi Minh City, Kon Tum, Binh Phuoc, Gia Lai and Da Nang. Binh Duong, in particular, more than doubled its population over this 10-year period.

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The Vietnamese population is not distributed equally: 43% of Vietnamese live in the Red River Delta and Mekong Delta, while only 19% of the population live in the two mid-land areas and in the mountains in the north and Highlands. The survey data also showed that the south-east had the highest growth rate of population, at 3.2% annually, while the Highlands had the highest immigration rate, increasing its population by 2.3% annually. Ho Chi Minh City had the highest population in the country at almost 6 million people, followed by Hanoi with 2.6 million people, Haiphong with 846,000, Da Nang with 771,000 and Bien Hoa with 626,000 in 2009. Impact Although 28.4% of the population live in urban areas, purchasing power in such places is quite high and these are the target consumers in the country. People in urban areas have higher incomes than those who live in rural areas and thus their living standard is also higher. According to a survey on household living standards conducted in 2008 by the GSO, monthly income per capita in urban areas was VND995,200, being 2.1 times higher than that in rural areas. However, with 72% of the population, rural dwellers are now considered a market with great potential, especially for necessary goods and services. Many manufacturers and retailers are focusing on this market, as the income gap between urban and rural areas is shrinking. The GSO conducts a household living standards survey every two years, which showed that the gap between monthly income per capita of urban and rural inhabitants was 2.4 times in 2002, 2.2 times in 2004 and 2.1 times in 2006. In recent years, some retailers have been selling products in rural areas by means of mobile shops on lorries, including Saigon Coop and Fahasa. This became particularly popular under the government scheme to promote Vietnamese-made products. Most rural inhabitants work on farms; however, some are under-employed and this, combined with industrialization, has reduced the agricultural area of the country. Some agricultural workers have become unemployed as a consequence, and have moved to urban areas, especially Hanoi and Ho Chi Minh City, to find new job opportunities. This has a positive effect in terms of increasing the labour force in urban areas and creating faster growth for the housing services and essential goods markets, but immigration is causing social problems such as housing shortages, crowded public transport and increased pressure on services. Southern Vietnamese are said to be easy-going and generous, while northerners are serious and thrifty, and those living in the centre of the country are miserable. Therefore, it is deemed easier for northern producers to enter the southern market, than southern producers to enlarge their market in the north.
Table 3 '000/as stated 2005 0-14 yrs 15-64 yrs 65+ yrs TOTAL Median age of population (years)
Source: Note:

Population by Age: 2005-2009

2006 24,343 55,265 4,695 84,302 25.3

2007 24,029 56,615 4,763 85,407 25.6

2008 23,742 57,940 4,832 86,515 26.0

2009 23,514 59,211 4,902 87,627 26.4

% Growth -4.6 9.8 5.9 5.3 1.5 years

24,655 53,915 4,628 83,198 24.9

National statistics, UN, Euromonitor International As of 1st January

Table 4 '000/as stated

Population by Age: 2010-2020

2010 0-14 yrs 15-64 yrs 65+ yrs TOTAL Median age of population (years) 23,367 60,405 4,973 88,744 26.8

2015 23,554 65,303 5,515 94,373 28.9

2020 23,365 69,395 7,009 99,769 31.2

% Growth 0.0 14.9 41.0 12.4 4.4 years

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Source: Note:

National statistics, UN, Euromonitor International As of 1st January

Table 5 '000/as stated

Male Population by Age: 2005-2009

2005 0-14 15-64 65+ TOTAL Median age of male population (years)
Source: Note:

2006 12,412 27,554 2,183 42,149 24.8

2007 12,254 28,237 2,213 42,703 25.2

2008 12,109 28,907 2,243 43,259 25.6

2009 11,994 29,550 2,273 43,817 25.9

% Growth -4.6 10.0 5.6 5.3 1.5 years

12,570 26,871 2,153 41,593 24.4

National statistics, UN, Euromonitor International As of 1st January

Table 6 '000/as stated

Male Population by Age: 2010-2020

2010 0-14 15-64 65+ TOTAL Median age of male population (years)
Source: Note:

2015 12,020 32,631 2,540 47,191 28.5

2020 11,930 34,717 3,232 49,879 30.7

% Growth 0.1 15.1 40.4 12.4 4.4 years

11,920 30,154 2,303 44,377 26.3

National statistics, UN, Euromonitor International As of 1st January

Table 7 '000/as stated

Female Population by Age: 2005-2009

2005 0-14 15-64 65+ TOTAL Median age of female population (years)
Source: Note:

2006 11,931 27,711 2,512 42,154 25.7

2007 11,775 28,378 2,550 42,704 26.1

2008 11,633 29,033 2,589 43,255 26.5

2009 11,520 29,661 2,629 43,810 26.9

% Growth -4.7 9.7 6.2 5.3 1.5 years

12,086 27,044 2,475 41,605 25.3

National statistics, UN, Euromonitor International As of 1st January

Table 8 '000/as stated

Female Population by Age: 2010-2020

2010 0-14 15-64 65+ TOTAL Median age of female population (years)
Source: Note:

2015 11,534 32,672 2,975 47,181 29.4

2020 11,435 34,678 3,777 49,890 31.7

% Growth -0.1 14.6 41.5 12.4 4.4 years

11,447 30,251 2,670 44,368 27.3

National statistics, UN, Euromonitor International As of 1st January

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Table 9 '000

Population by Ethnic Groups: 2005-2009

2005 Vietnamese Tay Thai Muong Khome Other TOTAL

Source:

2006 72,254 1,707 1,562 1,319 1,178 6,282 84,302

2007 73,153 1,738 1,594 1,344 1,196 6,383 85,407

2008 74,053 1,770 1,625 1,368 1,213 6,486 86,515

2009 74,949 1,800 1,657 1,395 1,230 6,596 87,627

% Growth 5.0 7.5 8.4 7.8 5.8 6.8 5.3

71,362 1,674 1,529 1,294 1,162 6,177 83,198

National statistics, UN, Euromonitor International

Table 10 '000

Population by Ethnic Groups: 2010-2020

2010 Vietnamese Tay Thai Muong Khome Other TOTAL

Source:

2015 80,472 1,984 1,841 1,539 1,332 7,204 94,373

2020 84,887 2,129 1,988 1,654 1,414 7,697 99,769

% Growth 11.9 16.3 17.8 16.7 13.3 15.0 12.4

75,866 1,831 1,687 1,417 1,248 6,696 88,744

National statistics, UN, Euromonitor International

Table 11 '000

Population by Marital Status: 2005-2009

2005 Married Divorced Widowed Single Unknown TOTAL

Source:

2006 37,602 654 3,867 41,908 272 84,302

2007 38,298 690 3,929 42,224 265 85,407

2008 38,973 724 3,992 42,567 259 86,515

2009 39,651 757 4,053 42,913 253 87,627

% Growth 7.5 22.3 6.6 3.2 -9.2 5.3

36,898 619 3,804 41,599 279 83,198

National statistics, UN, Euromonitor International

Table 12 '000

Population by Marital Status: 2010-2020

2010 Married Divorced Widowed Single Unknown TOTAL

Source:

2015 43,589 937 4,418 45,203 225 94,373

2020 46,617 1,063 4,710 47,169 210 99,769

% Growth 15.6 34.7 14.4 9.0 -15.2 12.4

40,333 789 4,116 43,259 248 88,744

National statistics, UN, Euromonitor International

Table 13

Marriage and Divorce Rates/Average Age at First Marriage: 2005-2009

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As stated 2005 Average age of men at first marriage (years) Average age of women at first marriage (years)
Source:

2006 22.7 21.5

2007 22.8 21.6

2008 22.9 21.6

2009 23.0 21.7

22.7 21.4

National statistics, UN, Euromonitor International

Table 14 As stated

Population by Urban/Rural Location and Population Density: 2005-2009

2005 Urban ('000) Rural ('000) Population density (people per sq km)
Source:

2006 22,797 61,505 272

2007 23,479 61,928 275

2008 24,174 62,341 279

2009 24,887 62,739 283

% Growth 12.8 2.6 5.3

22,063 61,135 268

National statistics, UN, Euromonitor International

Table 15 As stated

Population by Urban/Rural Location and Population Density: 2010-2020

2010 Urban ('000) Rural ('000) Population density (people per sq km)
Source:

2015 29,451 64,922 304

2020 33,486 66,283 322

% Growth 30.6 5.1 12.4

25,650 63,095 286

National statistics, UN, Euromonitor International

Table 16 '000

Population by Major Cities: 2005-2009

2005 Ho Chi Minh City Hanoi Haiphong Da Nang Bien Hoa

Source:

2006 5,392 2,221 694 696 564

2007 5,578 2,355 742 720 584

2008 5,771 2,496 793 745 605

2009 5,968 2,645 846 771 626

% Growth 14.6 26.3 30.1 14.6 14.9

5,210 2,095 651 673 545

National statistics, UN, Euromonitor International

Table 17 '000

Population by Major Cities: 2010-2020

2010 Ho Chi Minh City Hanoi Haiphong Da Nang Bien Hoa

Source:

2015 7,264 3,612 1,195 939 766

2020 8,500 4,542 1,530 1,099 901

% Growth 37.7 62.5 69.9 37.9 39.1

6,171 2,795 900 797 648

National statistics, UN, Euromonitor International

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HOUSE AND HOME

Households by Annual Disposable Income
Although gross domestic product (GDP) per capita in Vietnam has increased by more than US$1,000 since 2008, Vietnam is still considered a poor country. The large part of households have low annual disposable income. It is estimated that 19.1 million households had a disposable income of above US$500, of which 17.2 million households had a disposable income of US$1,000 in 2009. In 2005 89.7% of households earned over US$500 and 68.6% earned over US$1,000; in 2009 this had increased substantially to 96.6% and 86.7%, respectively. However, owing to rapid economic development, middle-income Vietnamese have gradually increased. These are the white-collar workers or self-employed. Economic development and the opening of the market has given Vietnamese citizens numerous opportunities to earn money, and an increasing number have started businesses and become self-employed, influencing the growth rate of households with a disposable income of more than US$5,000 per year. In 2009 it was estimated that there were 3.0 million households with a disposable income of this level or above, increasing from 1.1 million in 2005. A stock market and real estate boom in recent years caused some Vietnamese households to acquire riches rapidly. The early stage of development in the stock market was in safe transactions for investors, who rarely lost their money. Despite the worldwide financial crisis in 2008-2009, the stock market in Vietnam and its investors were not badly impacted. Meanwhile, housing supply in Vietnam never meets the high demand, especially in big cities such as Ho Chi Minh City or Hanoi, which has pushed housing prices up sharply, offering excellent opportunities for investors and even speculators. As a result, the number of households with annual disposable incomes above US$10,000 increased from 304,000 in 2005, to 749,000 in 2009. Although the real estate market in Vietnam has now frozen and the stock market has cooled due to government regulation, these increasingly open opportunities have shown Vietnams market potential to investors. As a result, it is expected that the number of middle- and high-income households will increase rapidly in the future. However, the real measurement of living standards is not based on the current value of disposable income, but its real value, which is subject to inflation. Vietnam was said to be good at controlling its inflation rate up to 2006 when it joined the WTO. High inflows of foreign direct investment and a boom on the stock market that attracted foreign portfolios and domestic investment, in addition to the macroeconomic environment, have made the inflation rate in Vietnam jump significantly since 2007. High inflation has made the real value of incomes lower, which has made goods and services more expensive, and households are said to be poorer even though their income has increased. Impact The high inflation rate has made Vietnamese households poorer, while the majority fall into the under US$5,000 income bracket. Therefore, the main consumer trend in Vietnam in 2009 was of saving more and spending less. Spending was most likely to be on necessary goods and services rather than luxury items. The stock market and real estate boom have created a nouveau riche, whose rapid acquisition of wealth has come too easily to be carefully saved: instead they buy imported luxury goods, which have continued despite inflation and a fragile economy. The import of luxury cars, in particular, has sustained the car market, while most other markets are facing difficulties.

Households by Number of Occupants

Household size in Vietnam has been getting smaller for years, as traditional four-generation families no longer exist due to more independent children who are choosing to avoid insular, complicated relationships between family members. In the past, one four-generation household might have contained more than 10 people. However, the most common household size in Vietnam is now around four people, partly as a result of government family planning programmes which have reduced families to one or two children. It was estimated that there were 6.2 million households of four members in 2009, an increase of 10.5% from 2005. This household size was expected to continue to be most common in Vietnam.

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Unlike some Western countries where children usually live with their parents until the age of 18, when they move out to live independently, Vietnamese children usually stay with their parents until they get married. Some even continue to live with their parents after their wedding because they cannot buy their own home. Therefore Vietnamese households still sometimes contain more than two generations. Impact There is no tradition of renting a home in Vietnam; the Vietnamese like to live in their own home. Any family renting a home will think of this as a short-term measure. This has the result of demand exceeding supply in the real estate market, thus housing and land prices rarely decline. As housing prices are very high in comparison with other countries, and there has been a fall in the average size of a household, the average size of homes has also decreased, especially in urban areas. As well as houses, Vietnamese live in apartments and owing to high demand for housing, there have been many real estate investors building new cities, such as Phu My Hung, Thu Thiem and Nam Thang Long. It is very difficult to buy a home in big cities such as Ho Chi Minh City or Hanoi. Cities and industrial areas such as Binh Duong or Dong Nai, which have industrial zones or export processing zones, have also attracted many workers (usually immigrants from rural areas), causing high demand for homes. Here, though, demand is for the more unusual rental market, either of homes or just rooms.

Single-person Households
Better educated, liberated, with higher social status and earning a higher income, some Vietnamese are now deciding to live separately from their parents while they are still single. Although quite rare in Vietnam, singleperson households are an increasing trend, especially in Ho Chi Minh City and Hanoi. In 2009 there were around 816,000 single-person households, accounting for 4.1% of total households. While the number of singleperson households was expected to increase to 965,000 in 2020, the percentage of total households that this represented (4.1%) was to remain the same. Impact An individual living alone typically has a simple life. It is more common for single-person households to be on higher incomes, therefore often they will own their own home. Owing to the time spent on shopping and cooking, residents of single-person households might only cook once or twice a week, instead eating out with friends or business partners after work. They also tend to enjoy relaxing in their own homes, which will be well decorated and well equipped.

Couples Without Children

Traditionally, the Vietnamese like to have children and couples that cannot have any are considered unfortunate. Although most couples, then, do have children, a small number of Vietnamese couples, especially those who have lived abroad or who are well educated and live in urban areas, may choose not to have any. Busy lifestyles, hard work for a career and ambition for higher social status and income have all influenced an opinion that having children can present an obstacle to promotion. There is also a belief that some couples are rendered unable to have children owing to chemicals in the food and health system causing infertility. All this has resulted in the highest increase for couples without children. In 2009 1.5 million households were couples without children, accounting for 7.3% of total households, an increase from 6.9% of total households being of this type in 2005. Impact Of course, couples without children have more freedom, but those who are unable rather than unwilling to have children may feel sadness as a result. Either way, their higher income and free time is often spent on leisure, including travel.

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For those who wish to have children, but cannot, the options available for having a child through artificial means are very expensive, at more than VND100 million. Demand for these services in Vietnam have increased significantly in recent years, and most hospitals are overloaded.

Couples With Children

Households of couples with children are the most common in Vietnam, accounting for 78.7% of total households, at 15.6 million in 2009, an increase of 9.6% on 2005. The birth rate in Vietnam has been decreasing over time, owing to the government family planning programme, which has reduced pressure on parents to have many children. This is especially welcome in the current economic climate. Spending patterns between those who have children and those who do not differ mostly in the amount spent on consumer durables, and the expense of school fees. Impact The large number of households of couples with children has created high demand for consumer goods and services catering to them, including foods, clothes, durable goods such as refrigerators, TVs, motorbikes, and even luxuries such as travel services. Parents greatest concern, especially in big cities, tends to be the choice of a good kindergarten or school for their child. There is a shortage of kindergartens with qualified staff, as most are oversubscribed and do not meet standards. Alongside this, public schools are known to be strict and the national curriculum gives little free time to students for relaxation. As a result of all this, private educational services is a profitable industry for investors, both domestic and foreign. There are an increasing number of international kindergartens and schools, from primary to higher levels, opening in the larger cities. Although private school fees are higher than public ones, an increasing number of parents are sending their children to study privately due to the perceived quality of these institutions, which include Anh Duong Nursery, British International Schools and Vietnam-Australia International Schools.

Single-parent Families
The number of single-parent families decreased by 9.8% during the review period. In 2009 there were 845,000 single-parent families in Vietnam, compared with 937,000 in 2005, and accounting for 4.3% of total households. Traditionally, having children outside marriage has been condemned strongly by society. However, the trend for single-motherhood has increased in recent years, partly owing to some high-profile single mothers among Vietnamese celebrities. Impact Single-parenthood is difficult, with the parent having to play both mother and father. If the children are grown up, the family will not be considered any differently to other families in society; however, if the children are still young, it is quite hard for single parents in both economic and psychological terms. In general, single-parent households do not have different consumption patterns to other households with children. However, those who are bringing up children alone on one income will tend to buy only necessary items and try to save more.
Table 18 '000 2005 above US$500 above US$1,000 above US$5,000 above US$10,000 16,601 12,696 1,065 304 2006 17,361 13,858 1,375 395 2007 18,097 15,280 1,876 503 2008 18,842 16,949 3,046 750 2009 19,146 17,176 3,027 749 Annual Disposable Income per Household (Current Value): 2005-2009

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above US$25,000 above US$45,000 above US$75,000 above US$150,000

Source:

98 47 25 11

117 57 30 13

142 68 36 15

198 96 51 22

200 97 52 22

National statistical offices, Euromonitor International

Table 19 '000

Annual Disposable Income per Household (Constant 2009 Value): 2010-2020

2010 above US$500 above US$1,000 above US$5,000 above US$10,000 above US$25,000 above US$45,000 above US$75,000 above US$150,000
Source: Notes:

2015 21,550 20,480 6,468 1,736 347 166 89 38

2020 23,523 23,098 12,340 4,294 728 309 164 70

% Growth 20.5 31.0 277.0 432.9 245.2 202.9 202.5 201.9

19,516 17,628 3,273 806 211 102 54 23

National statistical offices, Euromonitor International Constant value at 2009 prices

Table 20 '000

Households by Number of Persons: 2005-2009

2005 1 person 2 persons 3 persons 4 persons 5 persons 6+ persons Total households

Source:

2006 783 1,691 2,802 5,797 4,009 3,743 18,825

2007 793 1,717 2,850 5,948 4,096 3,746 19,151

2008 804 1,744 2,898 6,090 4,180 3,762 19,479

2009 816 1,772 2,947 6,225 4,263 3,789 19,812

% Growth 5.3 6.4 7.0 10.5 8.8 0.8 7.1

775 1,666 2,754 5,632 3,918 3,759 18,503

National statistics, UN, Euromonitor International

Table 21 '000

Households by Number of Persons: 2010-2020

2010 1 person 2 persons 3 persons 4 persons 5 persons 6+ persons Total households

Source:

2015 895 1,952 3,255 6,966 4,739 4,076 21,882

2020 965 2,107 3,515 7,542 5,126 4,381 23,637

% Growth 16.6 17.0 17.3 18.7 18.0 14.6 17.3

828 1,800 2,997 6,355 4,343 3,824 20,148

National statistics, UN, Euromonitor International

Table 22 '000

Households by Type: 2005-2009

2005 Single-person Couples without children Couples with children 775 1,280 14,236

2006 783 1,331 14,601

2007 793 1,385 14,968

2008 804 1,416 15,287

2009 816 1,451 15,601

% Growth 5.3 13.3 9.6

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Single-parent family Other Total households

Source:

937 1,276 18,503

916 1,193 18,825

897 1,107 19,151

869 1,102 19,479

845 1,099 19,812

-9.8 -13.8 7.1

National statistical offices, Euromonitor International

Table 23 '000

Households by Type: 2010-2015

2010 Single-person Couples without children Couples with children Single-parent family Other Total households
Source:

2015 895 1,725 17,552 748 962 21,882

828 1,504 15,942 837 1,037 20,148

National statistical offices, Euromonitor International

Home Ownership
The Vietnamese do not like to rent property, instead preferring to own their own home. This is probably owing to the Vietnamese agricultural tradition: in the past, when the population was not as large and land was abundant, each family had a large area of land of their own. When the children grew up and got married, the parents would give part of their land to their children as their heritage. As a consequence, the idea of renting ones home is unpopular. In 2009 18.4 million, or 92.7% of Vietnamese households, were home owners. However, this negative perception of renting has changed in recent years, especially in big cities such as Ho Chi Minh City and Hanoi. As the cities that have developed the fastest in the country, these have attracted an inflow of immigrants from rural areas looking for work, but housing and land there is limited. Moreover, an increasing number of foreigners have arrived in these cities. As a result, house prices have increased significantly, making homes unaffordable for many people, and demand for rentals has increased. There were 990,000 households renting in 2005, accounting for 5.4% of total households. This increased to 1.1 million households in 2009, accounting for 5.7% of all households, an increase of 15.0% over the review period. It is this tradition of living in ones own house that has caused a serious shortage of housing supply in the Vietnamese real estate market in recent years. According to the Ministry of Construction, Vietnam currently has a total housing area of more than 1 billion square metres, which equates to around 11 square metres per person. Therefore, in order to maintain this level of space per inhabitant, the country would need an additional 97,459,000 square metres of housing by 2020, to allow for the estimated population, i.e. almost doubling the housing stock. It is this high demand for housing that has made housing prices in Vietnam some of the highest, while incomes are ranked among the lowest in the world. The Government has intervened in the housing market, with tight regulations and administrative procedures for purchasing property and land, and limits on the amount of money that an investor can borrow from banks. Whenever the economy is in peril, as with the recent financial crisis, the Government looks to control the real estate market first of all. It is for this reason that in the last few years the housing market has remained frozen, with the exception of particularly popular areas such as Ho Chi Minh City and Hanoi. Economic reform in Vietnam has created unbalanced growth between rural and urban areas, which has seen a flow of migrants from rural to urban areas in search of better job opportunities. Since 2007, though, when the inflation rate in Vietnam started to increase sharply, there has been a trend of returning to rural areas for a less expensive lifestyle. It is very hard for migrant workers to afford life in the cities, with the high cost of renting a home and buying food and clothes on their very low salaries. This has meant that factories and other manufacturers have found it increasingly difficult to hire workers in the last few years.

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For those who want to buy a home but cannot afford to buy outright, mortgages are available from the bank. Currently, banks offer several mortgage products, with differing lengths of loan term (terms of 15-25 years are the most popular). Normally, loan application documents ask for ID, residence permit, documents proving income and loan repayment ability, and a contract for house construction, renovation or purchase. Some banks offer loans of up to 70% of the purchase value. Impact An increasing number of Vietnamese living overseas are returning to their homeland due to more open government policy, and are buying homes in Vietnam. Therefore, although the real estate market has been stable in recent years due to government regulation, and the price of houses has slowed its increase, prices are expected to increase sharply in 2010, reaching their peak at the end of 2011. Population density in Vietnam is now at 283 people/km2, which is twice as high as other Asian countries and five times higher than the world average. This has resulted in demand outstripping supply with regards to land and housing, so apartments, especially in big cities, have increased sharply in recent years. However, it is estimated that around 50% of apartments marketed are premium, 5% are luxury, 45% are of a medium standard and 3% are of a popular standard, while demand for the latter apartments is said to be very high. Therefore, there have been many more investors focusing on building popular-standard apartments to sell in coming years. When Vietnam opened its doors to the world economy, it saw an influx of foreigners coming to live and work there. Because foreigners are not allowed to buy houses in Vietnam, they have to rent, and so there has been an increasing demand for rentals in recent years, especially in the major cities. The foreigners tend to inhabit specific areas with respect to nationalities, such as a Korean area, a Japanese area or a Western area, in which they find shops, restaurants and services akin to their own country.

Running Costs
The utilities are another necessity. Although prices of such necessary goods increased many times during the review period, people have little choice but to spend their money on these. The electricity market is a monopoly, dominated by the state-owned Vietnam Electricity (EVN) for years. EVN increased the electricity price in March 2010, to VND1,058 per kWh excluding value-added tax (VAT), representing an increase of 6.8% on 2009. Although this new price is said to not impact significantly on consumer expenditure, its indirect influence through increases to prices of consumer goods will be evident. The Ministry of Industry and Trade has estimated that the new electricity price will increase other prices from between 2.8% and 3.2%, with consumer expenditure increasing from 0.2% to 0.3%. With over VND8,000 trillion spent on electricity in 2009, an increase of 117.4% on 2005, it is highly likely that consumer spending will be impacted even more than the Government has estimated. Almost all Vietnamese households use gas for daily cooking. Gas is provided to each household by gas retailers, which are dealers of gas companies such as Saigon Petrol, Vinagas and Gia Dinh Gas. The gas price is not stable, fluctuating frequently during the year, but on an increasing trend. Normally, gas retailers offer a small promotion, such as a packet of sugar or a small bottle of washing-up liquid. In 2010 more than VND7,000 trillion was spent on gas, an increase of 109.5% on 2005. Household waste is collected by private companies, co-operatives and state-owned public service companies. For the latter, Vietnamese citizens do not have to pay for the service. However, these companies usually collect waste only on main roads of cities, while private companies and co-operatives are responsible for waste collection in smaller roads, for which people have to pay. Regardless of household income, each household currently pays VND3,000 per month for the waste collection service. Vietnam is one of the countries to have been influenced seriously by climate change, with some cities flooding when it rains. Exacerbating the situation, the drainage system is old and no longer able to carry off the superfluous water in the cities. In order to remedy the situation, the city authorities have commanded that the ground be raised by around 70cm in areas at risk of flooding, and inhabitants are obliged to raise the street level of their homes to match the new ground level an expense that few can afford.

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Impact An increase in the price of electricity has had a knock-on effect on the cost of living, affecting purchasing power in 2010. Vietnamese are looking to prioritise food and utilities and cut expenditure wherever possible. Unfortunately, as Vietnam is a hot country there is high demand for electric fans and air conditioning in the summer precisely the season when drought makes it hard for the hydroelectricity power stations to meet electricity demand. The common shortage of electricity supply has resulted in increasing demand for hiring or buying electricity generators. Cooking with gas has become increasingly popular in Vietnam, replacing electricity or coal, and increasing demand for gas cookers in the country. For those, in particular, who want a modern kitchen a gas hob is seen as desirable. A preference is also emerging for individual gas hobs, rather than free-standing, traditional gas cookers. The environmental movement has also impacted on Vietnamese cooking choice, with some homes and restaurants now sporting induction hobs, although demand for this kind of cooker is still small, as its price is quite high. Upgrading drainage and raising flood-risk areas in big cities has forced residents to repair their houses, with resultant increases in demand for related goods and services, such as construction materials. Cities are expected to continue this work in flood-risk areas over coming years, which will mean a significant increase in construction materials and services.

Shopping for Household Goods

Traditionally, shopping daily for groceries is Vietnamese womens main task. In general, most women shop at traditional markets, known as wet markets. These markets are found throughout the country in varying sizes, from large markets located on main streets (Ben Thanh market, An Dong market, Dong Xuan market), to unnamed ones located in small alleys. Markets sell everything from rice, fish, meat and fruit, to clothes, shoes and flowers. Over the past 10 years or so, Vietnamese in main cities and provinces have become more familiar with more modern shopping channels such as supermarkets, hypermarkets and convenience stores, of which supermarkets are the most popular. The majority of Vietnamese prefer these channels as they do not have to worry about product quality and they do not have to bargain. Currently, Coopmart is the most successful supermarket chain in Vietnam, with 44 outlets located from the central part of the country to the south. Other supermarkets include Citimart, Maximark and Big C, and hypermarkets Metro and Cash & Carry. There are several convenience stores, such as Shop & Go and Coop Convenience Store, mainly located in Ho Chi Minh City and Hanoi. With a smaller range of products, these latter stores have not attracted as much business. Consumer durables are usually purchased from specialist superstores, such as Nguyen Kim, Thien Hoa, Cho Lon and WonderBuy, as well as specialist stores unique to certain areas of the country. Consumers can visit different zones of the store, selling different products, from TVs and cameras to washing machines, refrigerators and microwave ovens. Smaller specialist stores are usually first or second dealers for certain companies, with a smaller range of products, but they may offer goods at cheaper prices, accepting smaller profits to attract more customers. Vietnamese consumers usually want to see and touch the item that they are going to buy, thus they tend to go to bricks and mortar shops. However, some consumers are becoming accustomed to newer retail formats, such as online, telephone or TV shopping, especially consumers in urban areas. Price is always the key driver for Vietnamese consumers. Traditional markets do not offer large discounts to consumers, as superstores and specialist stores do. Advertisements about sales and special offers always attract attention and shops are always crowded when the sales are on. Impact Although modern shopping channels such as supermarkets give the consumer less concern about product quality and hygiene, traditional markets are still preferred because of the freshness of the produce and the extensive range of choice. Among a range of products, each big market tends to specialise in one main item and become famous for it. Soai Kinh Lam market is known for its textiles, for example, and An Dong market for clothes,

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while Ho Thi Ky market is known for flowers. Therefore, although some markets may have closed or moved, these markets have existed for a long time and have become a symbol within their area. Choosing specialist stores and superstores for shopping for consumer durables has become increasingly popular in Vietnam. With their large-scale sales and strong financial status, specialist superstores such as Nguyen Kim, Thien Hoa or Best Caring are strongly supported by manufacturers, which provide promotions and special offers in order to attract consumers based on price. These superstores are no longer just found in the larger cities, but also in other provinces. The most successful supermarket chain, Coopmart is trying to access the northern market with 100 outlets by 2015.

Possession of Household Durables

Owing to increasing disposable income, the percentage of Vietnamese households with consumer durables has increased over the review period, with a small percentage difference between rural and urban homes. The regions with the highest percentage of households with consumer durables were Red River Delta and Mekong River Delta, with 99.7% and 99.6%, respectively, in 2008, according to the GSO survey on living standards. Most Vietnamese households own a colour TV (86.0% in 2009), while refrigerators, telephones and vacuum cleaners were owned by a significant percentage of households (around 30% in each case). The aforementioned GSO survey estimated that there were 92.1 TV sets per 100 households in the country, of which 108.6 TV sets per 100 households in urban areas and 85.7 sets per 100 households in rural areas. The telephone is the second most popular consumer durable in Vietnamese households, at 38.6% in 2009. The telephone has shown significant growth in recent years, due to big promotions from service providers such as VNPT and Viettel. The GSO estimated the number of telephones at 107.2 per 100 households in 2008, with some households having more than one telephone. This figure was broken down further into 176.6 telephones per 100 households in urban areas, with 80.2 per 100 households in rural areas. With PC use becoming increasingly popular, both of established imported and developing domestic brands, computers have become increasingly affordable. Meanwhile, local production of washing machines has lowered their prices. This explains the significant increase in household ownership of these two items, with 11.0% of Vietnamese households with a personal computer in 2009, and 12.6% of households with a washing machine. Impact TVs popularity means that the market for TV sales is crowded. The Vietnamese favour Japanese brands such as Sony, Sharp, Toshiba, JVC and Panasonic, rather than Korean ones like LG or Samsung. With increasing domestic manufacture, TV prices have become more affordable in recent years, and manufacturers are diversifying their product range to provide LCD TVs and other slim-line models. Local production of refrigerators has had the same effect, with 29.9% of Vietnamese households owning one in 2009. With busier lifestyles, more women now see these domestic goods as essential, resulting in increasing demand during the review period. Telephones have become commonly owned for a long time, owing to cheap prices. Vietnamese households rarely have to buy a telephone, as service providers normally give a handset away as a gift when a household subscribes to their network. Houses in big cities often have more than one telephone, as there is often more than one floor and many rooms; thus multiple telephones on one line has been common for some years. Personal computers are highly in demand, both by businesses and by students and families. Imported brands such as Acer, Dell and HP are firmly in the market, as are the domestic Robo, Elead and CMS. However, personal computers are mainly popular in urban areas, with rural areas offering massive potential for PC manufacturers and retailers.

DIY and Gardening

Do-it-yourself (DIY) as a hobby or pastime is a new concept in Vietnam, as the Vietnamese have traditionally undertaken home repairs or craft projects themselves for economic reasons. In recent years, however, the idea of

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DIY as a hobby has begun to expand. Currently, there is one website, www.diy.vn, gathering together DIY-ers in different areas, such as tools, technology, vehicle maintenance and gardening. In rural areas, gardening is not for leisure but for employment and earning money. Agricultural labourers work until harvest time, when they are underemployed for several months. Urban inhabitants do gardening for leisure or to grow fruit and vegetables. Wealthier inhabitants, of course, have larger gardens, while other people have just a few flower pots. Busier urban inhabitants tend not to spend time gardening, except perhaps at the weekend, while wealthier city dwellers often hire professional gardeners to take care of their gardens. Impact The lack of popularity of DIY as a hobby means that few products are sold in this area, although some supermarkets sell sets of gardening tools. However, the market for gardening products is small, as inhabitants do not need many tools to take care of several flower pots in their houses. Currently, urban inhabitants are planting fresh vegetables, partly for leisure and partly to meet their desire for fresh vegetables. As vegetables sold in markets are grown using many chemicals, they are not deemed healthy, and inhabitants are growing their own organic fruit and vegetables. Few companies offer advice on gardening, however, and seeds and other products are still not widely available.

Pet Ownership
Pets are another slightly unusual concept in Vietnam. Vietnamese households usually have dogs or cats, but these are not pets in the Western sense, but working animals: dogs are for security, while cats are to catch mice. These are the most popular animals found in Vietnamese homes. However, an increasing number of Vietnamese households in the big cities own pets. Dogs, in particular, as well as birds and fish. The Vietnamese can buy pets at www.phuonganhpetmart.com, from where they can choose cats, chickens or numerous different breeds of dog. Alongside the more traditional veterinary clinics are the new pet clinics, which have appeared to care for pets. So far, only one professional veterinary clinic (thuypetpro.com) has shown an interest in services and products for pets, while pet lovers have created their own website (www.yeuthucung.com) to connect with other Vietnamese pet owners and share their experiences on caring for pets. Impact Demand for pets has been increasing in recent years, showing market potential for pets and associated products. In addition to specialist pet supermarkets and shops that can be easily found in cities, Vietnamese who want more unusual pets such as Tarantulas, flying squirrels, porcupines, centipedes and snakes, can order online, some via more illegal channels. It is hard to estimate the value of this growing market, but it is evidently full of potential. The increasing pet population in Vietnam has created a new market for pet food and pet care products. Pet food is usually sold in supermarkets, specialist pet supermarkets, pet shops or veterinary clinics, while pet care products, pet clothes, cosmetics, medicines and other items are mainly sold in veterinary clinics or specialist pet shops.
Table 24 '000 2005 Home owner Home owner, without mortgage Home owner, with mortgage Rented Other Total households
Source:

Households by Tenure: 2005-2009

2006 17,463 17,281 181 1,035 328 18,825

2007 17,760 17,547 212 1,075 316 19,151

2008 18,061 17,806 255 1,109 310 19,479

2009 18,365 18,063 302 1,139 308 19,812

% Growth 7.0 6.3 76.1 15.0 -10.6 7.1

17,169 16,997 172 990 344 18,503

National statistical offices, Euromonitor International

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Table 25 '000

Households by Tenure: 2010-2020

2010 Home owner Home owner, without mortgage Home owner, with mortgage Rented Other Total households
Source:

2015 20,180 19,377 804 1,331 370 21,882

2020 21,615 20,372 1,243 1,551 470 23,637

% Growth 15.8 11.2 260.2 33.0 51.8 17.3

18,672 18,327 345 1,166 310 20,148

National statistical offices, Euromonitor International

Table 26 VND million

Running Costs: 2005-2009

2005 Electricity Gas Liquid fuels Solid fuels Heat energy TOTAL
Source:

2006

2007

2008

2009

3,698,989 4,365,483 5,285,022 7,094,080 8,040,202 3,424,586 3,965,648 4,751,044 6,333,702 7,174,350 355,306 399,870 473,013 627,142 706,550 456,588 513,091 582,156 748,210 818,255 808,721 958,389 1,181,565 1,643,140 1,923,356 8,744,190 10,202,481 12,272,800 16,446,274 18,662,712
National statistical offices, Euromonitor International

Table 27 % of households

Possession of Household Durables: 2005-2009

2005 Colour TV set Dishwasher Freezer Microwave oven Personal computer Refrigerator Telephone Tumble drier Vacuum cleaner Washing machine
Source:

2006 78.2 0.5 8.3 13.1 7.9 22.7 33.5 1.0 25.3 9.3

2007 81.2 0.6 9.5 14.5 9.0 24.8 35.6 1.0 27.1 10.3

2008 83.8 0.8 10.5 16.0 10.0 27.3 37.3 1.1 28.9 11.4

2009 86.0 1.0 11.4 17.1 11.0 29.9 38.6 1.2 30.7 12.6

74.5 0.4 7.0 11.3 6.7 21.0 30.5 0.9 23.8 8.4

National statistical offices, Euromonitor International

Table 28 % of households

Possession of Household Durables: 2010-2020

2010 Colour TV set Dishwasher Freezer Microwave oven Personal computer Refrigerator Telephone Tumble drier Vacuum cleaner 88.1 1.2 12.0 18.5 11.9 32.8 39.5 1.2 32.3

2015 95.2 2.8 13.9 23.9 15.7 47.6 42.1 1.4 39.3

2020 98.0 4.4 14.7 27.1 18.5 55.8 42.8 45.2

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Washing machine
Source: National statistical offices, Euromonitor International

13.8

20.5

25.6

Table 29 '000s of animals

Pet Population: 2005-2009

2005 Pet Population Dog Cat Bird Fish Small Mammal Reptile
Source:

2006 11,420 3,400 2,200 1,250 4,570

2007 12,170 3,650 2,540 1,200 4,780

2008 13,210 3,740 2,750 1,180 5,540

2009 14,477 3,944 2,887 1,275 6,371

% Growth 24.8 23.3 45.8 -38.9 47.1

11,600 3,200 1,980 2,088 4,332

National statistics, UN, Euromonitor International

INCOME
Average Income
Since the countrys economic reform in 1986, Vietnam has developed significantly. National statistics show that Vietnam achieved GDP of VND516,568 billion in 2009 at 1994 constant prices, an increase of 88.7% on 2000. With average inflation of around 7% per year during 2000-2008, Vietnam has been enjoying a good economic performance, which has reduced the unemployment rate in the country. This economic development has created more jobs and business opportunities for the Vietnamese, as a result of which incomes have increased. Data from the GSO show that estimated GDP per capita in 2009 was VND19,278,000 in current prices, an increase of 10.5% from 2008 and 89.3% from 2005. Annual gross income per capita was VND15.7 million and disposable income was VND13.4 million in 2009 in current prices, an increase of 98.4% and 99.7% from 2005, respectively. Since 2007, when the country first had to cope with high inflation rates, the Vietnamese Government has increased the regulated minimum wage several times, most recently to VND730,000 per month from May 2010 (increasing from VND80,000 from May 2009). However, according to the Institute of National Economic Management, the current minimum wage meets only 60%-65% of peoples daily needs and is 20% lower than the real wage paid for simple labour in the labour market. This regulated minimum wage is just a little higher than the poverty line, and does not ensure enough money for people to live, but many companies apply this minimum for unskilled labour, and thus the majority of unskilled labourers face financial difficulties.

Average Income by Age

Obviously, those of working age have higher incomes, with an average gross income for this group of VND21 million to VND23 million a year. Those aged 45-49 earn the highest average income, at VND23.5 million in 2009. In consumer terms, manufacturers view 25-45 year-olds as the most powerful group, as these are wage earners, decision-makers and thus spend the most. This group also decides fashion trends and life style choices that affect all other income/age groups.
Table 30 VND per capita 2005 Annual gross income Disposable income 7,907,330 6,689,701 2006 2007 2008 2009 Annual Gross and Disposable Income (Current Value): 2005-2009

8,993,916 10,653,839 13,985,184 15,684,284 7,580,644 8,980,256 11,885,355 13,360,354

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Source:

National statistical offices, Euromonitor International

Table 31 VND per capita

Annual Gross and Disposable Income (Constant 2009 Value): 2005-2009

2005 Annual gross income Disposable income

Source: Notes:

2006

2007

2008

2009

12,109,490 12,824,825 13,954,750 14,964,684 15,684,284 10,244,782 10,809,577 11,762,635 12,717,787 13,360,354

National statistical offices, Euromonitor International Constant value at 2009 prices

Table 32 VND per capita

Annual Gross and Disposable Income (Constant 2009 Value): 2010-2020

2010 Annual gross income Disposable income

Source: Notes:

2015 22,433,779 19,351,852

2020 31,060,778 26,868,550

16,497,387 14,075,349

National statistical offices, Euromonitor International Constant value at 2009 prices

Table 33 VND

Average Annual Gross Income by Age (Current Value): 2005-2009

2005 15-19 yrs 20-24 yrs 25-29 yrs 30-34 yrs 35-39 yrs 40-44 yrs 45-49 yrs 50-54 yrs 55-59 yrs 60-64 yrs 65-69 yrs 70-74 yrs 75-79 yrs 80+ yrs
Source:

2006 11,948,427 12,613,684 12,904,099 13,077,985 13,333,062 13,624,699 13,786,357 13,642,512 13,112,491 12,320,951 11,596,020 10,972,444 10,426,887 10,099,328

2007 13,884,644 14,744,503 15,134,033 15,358,351 15,662,645 16,004,188 16,192,392 16,023,933 15,407,682 14,489,794 13,639,934 12,911,479 12,274,563 11,893,734

2008 17,848,572 19,098,092 19,686,941 20,012,325 20,413,389 20,852,420 21,092,550 20,876,304 20,090,142 18,925,825 17,833,525 16,899,450 16,082,188 15,596,384

2009 19,613,824 21,155,447 21,904,338 22,305,599 22,760,436 23,246,262 23,510,070 23,271,120 22,406,939 21,135,885 19,929,525 18,898,479 17,996,428 17,463,744

10,699,599 11,238,281 11,463,107 11,604,574 11,830,523 12,093,814 12,240,588 12,110,662 11,627,903 10,908,484 10,255,041 9,691,775 9,198,324 8,902,114
National statistical offices, Euromonitor International

Table 34 VND

Average Annual Gross Income by Age (Constant 2009 Value): 2005-2009

2005 15-19 yrs 20-24 yrs 25-29 yrs 30-34 yrs 35-39 yrs 40-44 yrs 45-49 yrs 50-54 yrs 55-59 yrs 60-64 yrs 16,385,643 17,210,596 17,554,900 17,771,546 18,117,570 18,520,781 18,745,554 18,546,583 17,807,273 16,705,535

2006 17,037,793 17,986,414 18,400,529 18,648,481 19,012,206 19,428,064 19,658,580 19,453,464 18,697,685 17,568,993

2007 18,186,565 19,312,836 19,823,055 20,116,874 20,515,449 20,962,813 21,209,329 20,988,676 20,181,490 18,979,210

2008 19,098,658 20,435,692 21,065,783 21,413,957 21,843,110 22,312,891 22,569,839 22,338,447 21,497,224 20,251,359

2009 19,613,824 21,155,447 21,904,338 22,305,599 22,760,436 23,246,262 23,510,070 23,271,120 22,406,939 21,135,885

% Growth 19.7 22.9 24.8 25.5 25.6 25.5 25.4 25.5 25.8 26.5

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65-69 yrs 70-74 yrs 75-79 yrs 80+ yrs

Source: Notes:

15,704,836 14,842,237 14,086,552 13,632,929

16,535,281 15,646,096 14,868,163 14,401,081

17,866,036 16,911,880 16,077,627 15,578,804

19,082,557 18,083,061 17,208,559 16,688,730

19,929,525 18,898,479 17,996,428 17,463,744

26.9 27.3 27.8 28.1

National statistical offices, Euromonitor International Constant value at 2009 prices

CONSUMER EXPENDITURE
Living Costs
A poor population, most Vietnamese spend the majority of their money on food and non-alcoholic beverages, and other necessary goods. In 2009 the Vietnamese spent VND426.4 trillion on food and non-alcoholic drinks, accounting for 38.1% of total consumer expenditure in current values, an increase of 105.8% on 2005. The GSO survey on household living standards conducted in 2008 found that 12.8% of expenditure went on food, 27.3% on other foodstuff, and 2.7% on drinking and smoking, representing a decrease of 1.9, 1.2 and 0.7 percentage points on 2002, respectively. This indicates that increasing incomes have meant that the share of expenditure for necessary items is decreasing, while spending on other goods is increasing. After food and foodstuff, transportation and communications combined were recorded by the survey as the next highest area of expenditure, with 13.9% of expenditure going on transportation and communications in 2008. Euromonitor figures show that it is transportation, at 13.8% of total expenditure (VND154.8 trillion) in 2009, that is the major expense of these two categories, with large increases since 2005 partly owing to increasing fuel prices and number of vehicles. However, at 1.4% of total expenditure, communications is not insignificant, and has increased from 1.3% of total expenditure in 2005. Although health care and medical services and education are necessary, it seems that the Vietnamese focus on survival rather than good health or quality of life, dedicating only a small proportion of total expenditure on these two services. Health goods and medical services accounted for 7.2% of expenditure in 2009, with only 6.8% going on education. Of course, leisure and recreation in a poor society will only account for a very small section of expenditure 1.3% in 2009; while the amount spent on leisure and recreation, which includes some of the increasing luxury goods market, has increased since 2005, the percentage of income spent on leisure and recreation has not changed over the review period, from 1.3% in 2005. Impact Although Vietnam is an agricultural country and the third biggest rice exporter in the world, it is also a potential market for imported rice and other agricultural products, due to its sizeable population. In addition to homegrown rice, Vietnamese consume rice from Thailand and Japan, as well as other agricultural products like garlic, carrots and fruit from Thailand, China and the Philippines. Increasing expenditure on non-alcoholic beverages is partly a consequence of increased purchases of bottled water. In recent years, water provided by the state-owned water corporation has been polluted regularly, resulting in higher demand for purified water. Popular brands include La Vie, Joy, Aquafina and Aquacool, but there are numerous bottled and purified water brands in the market. Despite the countrys poverty, there are Vietnamese who are willing and able to spend large amounts of money, buying luxury goods and large ticket items such as cars. Premium shopping centres have been built to cater for this wealthy minority, including Parkson, Vincom and Zen Plaza, where one can find popular branded products. Demand for travel has also been increasing in Vietnam in recent years, owing to increasing incomes. The Vietnamese want to relax with their families and friends after periods of hard work, and combined with active, attractive promotion by tour operators, more and more Vietnamese are going on holiday tours, not only domestically, but abroad.

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There has also been a significant increase in the number of Vietnamese families that choose to send their children to study abroad, another result of increasing incomes in the country. To meet this rising demand, educational organizations and companies have been established in Vietnam to offer overseas study in schools, colleges or universities, as well as offering fellowships to study abroad. Vietnamese students tend to choose to study in Australia, the USA or France.
Table 35 VND billion 2005 Food and non-alcoholic beverages Alcoholic beverages and tobacco Clothing and footwear Housing Household goods and services Health goods and medical services Transport Communications Leisure and recreation Education Hotels and catering Misc goods and services TOTAL
Source:

Consumer Expenditure by Broad Category (Current Value): 2005-2009

2006 239,145 17,237 26,005 24,596 53,465 42,681 81,182 8,031 7,792 38,007 52,316 21,699 612,156

2007 285,051 20,144 30,131 29,528 63,404 52,140 97,902 9,863 9,403 47,088 63,054 26,548 734,257

2008 379,124 26,206 39,363 39,267 84,646 70,107 134,041 13,505 12,707 65,123 84,752 36,052 984,893

2009 426,438 29,011 43,745 44,221 95,519 80,732 154,781 15,569 14,504 76,282 96,719 41,379 1,118,901

207,223 15,055 22,861 21,386 46,721 36,751 68,236 6,855 6,710 33,480 45,931 17,986 529,197

National statistical offices, OECD, Eurostat, Euromonitor International

Table 36 VND billion

Consumer Expenditure by Broad Category (Constant 2009 Value): 2005-2009

2005 Food and non-alcoholic beverages Alcoholic beverages and tobacco Clothing and footwear Housing Household goods and services Health goods and medical services Transport Communications Leisure and recreation Education Hotels and catering Misc goods and services TOTAL
Source: Notes:

2006 341,007 24,578 37,082 35,073 76,238 60,860 115,761 11,452 11,111 54,195 74,600 30,942 872,901

2007 373,369 26,385 39,467 38,676 83,049 68,295 128,236 12,919 12,317 61,677 82,590 34,773 961,754

2008 405,678 28,041 42,119 42,017 90,575 75,017 143,429 14,451 13,597 69,684 90,688 38,577 1,053,874

2009 426,437 29,011 43,745 44,221 95,519 80,732 154,781 15,569 14,504 76,282 96,719 41,379 1,118,901

% Growth 34.4 25.8 24.9 35.0 33.5 43.4 48.1 48.3 41.1 48.8 37.5 50.2 38.1

317,346 23,056 35,011 32,751 71,550 56,282 104,499 10,498 10,276 51,272 70,340 27,544 810,426

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

Table 37 VND billion

Consumer Expenditure by Broad Category (Constant 2009 Value): 2010-2020

2010

2015

2020

% Growth

% CAGR

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Food and non-alcoholic beverages Alcoholic beverages and tobacco Clothing and footwear Housing Household goods and services Health goods and medical services Transport Communications Leisure and recreation Education Hotels and catering Misc goods and services TOTAL
Source: Notes:

456,164 30,301 46,050 47,072 102,485 86,617 166,789 16,761 15,497 84,472 103,759 44,879 1,200,848

642,099 40,097 62,676 66,443 151,750 129,683 252,446 25,457 23,344 137,532 154,018 67,533 1,753,078

908,342 54,864 84,448 94,063 223,145 195,396 366,293 39,101 35,075 228,057 229,143 101,384 2,559,312

99.1 81.1 83.4 99.8 117.7 125.6 119.6 133.3 126.3 170.0 120.8 125.9 113.1

7.1 6.1 6.3 7.2 8.1 8.5 8.2 8.8 8.5 10.4 8.2 8.5 7.9

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

WORK
Working Conditions
According to the Vietnamese Labour Code, work must not exceed eight hours a day or 48 hours per week. Based on this, organisations, the public sector and foreign companies usually work a 40-hour week, from Monday to Friday, while some private sector companies work a 44-hour week, from Monday to midday on Saturday, and the rest work a 48-hour week from Monday to Saturday. The Labour Code says that employers and employees can agree to work overtime, but that overtime must not exceed four hours per day and 200 hours per year. Employees will be paid at least 1.5 times their wages if they work overtime on a week day, and two times their wage if they work overtime at a weekend or on public holidays. Employees must have at least one day or 24 continuous hours off per week. Equally, employees have all nine public holidays paid, which include one day for new year, four days for the lunar new year, one day for King Hungs Anniversary, one day for Reunification Day, one day for International Labour Day and one day for National Day. If a public holiday falls at the weekend, employees are compensated with the equivalent number of days off in the following week. After working full time for a company for one year, employees earn the right to 12 days of paid leave a year, after which one day of leave will be added for every five years that the employee works for the company. On top of this, employees are entitled to paid leave for their own wedding (three days), their childs wedding (one day), or the funeral of their parents, spouse or child (three days). There is no discrimination between males and females in the workplace and gender inequality in Vietnam is not considered a big issue, especially among those who are well educated. There are an increasing number of Vietnamese women achieving success and high social status.

Commuting
Most Vietnamese get to work by motorcycle, as this is the main means of transportation in Vietnam. Although there is a network of buses in the big cities, the poor service and increased travel time means that few people choose this method of commute. The majority of Vietnamese employees work in the inner cities where they live, thus the distance between their home and workplace is not large, with the exception of in Ho Chi Minh City, owing to its sheer size. Those who work in a city in which they do not live, such as Binh Duong (around 20 km from Ho Chi Minh City) or Bien Hoa (around 50 km) usually travel by company buses.

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Although the number of cars in Vietnam has been increasing sharply due to rising incomes, driving to work remains unpopular owing to traffic jams and lack of parking spaces. Car owners still tend to use motorbikes to get to work. The Vietnamese are said to be too lazy to walk, even a very short distance; however far, they always use a motorbike. Motorbikes are seen as more flexible, time-saving and convenient than any other method of transport.

Working Women
Vietnamese women have been liberated for a long time and most of them are able to work. As a consequence, the number of working women has been on the increase. In 2009 there were 21.6 million Vietnamese women working, an increase of 7.4% on 2005. Vietnamese women are entitled to four months of paid maternity leave. However, with the number of women breastfeeding their babies acknowledged to be the lowest in Asian countries, the Ministry of Health is encouraging mothers to breastfeeding their babies for the first six months. To support this move, the Ministry of Labour, Invalids and Social Affairs is considering increasing the duration of paid maternity leave to six months, and this move is expected to be approved by Government soon. There is no perceived discrimination or difference between males and females in the workplace, with job opportunities and remuneration given according to employee capability, regardless of gender. However, Vietnamese women traditionally do the housework and care for the children in addition to working eight-hour days in paid employment, although there is a move towards Vietnamese men helping with some of this domestic work, and some Vietnamese employ domestic help.

Alternative Work Options

Most Vietnamese work full time and there are not many part-time jobs. However, with the countrys economic development, many new forms of work have appeared, some of which do not require people to work in an office in the traditional way. This is particularly the case for those employed in research, the arts and advertising, and Vietnamese workers are becoming much more familiar with part-time roles, and freelance and contract work. While these types of jobs are not common in Vietnam as yet, especially working freelance, demand for part-time jobs has been increasing in recent years, particularly owing to the development of the advertisement industry. Here there are companies that organise events to launch new products, run promotions, and otherwise employ a number of part-time, short-term employees. These jobs are normally taken by students, often females.

Retirement
The official retirement age in Vietnam is 55 years old for females and 60 for males, although those who are in good health and are willing to work can often continue until 65 years old. In practice, very few choose to continue working, most of whom are lecturers, instructors and researchers. Fortunately, Vietnam is a country with a young population, thus the share of pensioners of its total population is small, positively influencing the consumer goods market. Retirees who have worked for more than 20 years (paying into the social insurance scheme) will usually have a pension, as regulated by the Labour Code. However, the pension in Vietnam is said to be inadequate for daily needs, and those on this low income have limited purchasing power. Most of the elderly live with their childrens families, as Vietnamese children traditionally care for their parents as they grow older. Although the elderly can no longer earn, they are of immense value to their children in their help with domestic chores, looking after the children, etc. As life speeds up in the Vietnamese economy and people work longer and harder, elderly parents are becoming increasingly important, if not indispensable, for their help around the home.

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Retirees main concern is their health, and so they usually do exercises in the early morning. Although they no longer earn money working, they spend time gardening and doing other domestic chores. In recent years, owing to their childrens increasing income, more elderly people are having the opportunity to travel not only within Vietnam, but also abroad.

Unemployment
Successful economic development in Vietnam has created more jobs in recent years, which has lowered the unemployment rate. Unemployment in Vietnam in 2008 was 2.0%, the lowest point during the review period, having fallen from 2.2% in 2005, a period of healthy economic development. However, with the impact of the world financial crisis, the unemployment rate in 2009 increased to 2.8%. Urban areas, where most people work in industry and the service sector, was more heavily impacted by the financial crisis than were rural areas. Thus the unemployment rate in urban areas is reckoned to be much higher than in rural areas. According to GSO data, the unemployment rate in urban areas in 2009 was 4.6%, while that in rural areas was 2.3%. Urbanization continues in Vietnam, in some cases transforming rural areas into urban ones. More industrial zones have been built, more factories and companies have been opened, and agricultural areas have shrunk. The majority of those living in rural areas are agricultural workers, without the skills to work in factories or industrial zones. Thus urbanization, by reducing agricultural land, creates more rural unemployment. For this reason, the unemployment rate in rural areas has increased from 1.5% in 2008 to 2.3% in 2009, according to the GSO.
Table 38 '000 2005 Employed male population Employed female population Total employed population Male part-time employees Female part-time employees Total part-time employees
Source:

Employed Population: 2005-2009

2006 22,246 20,535 42,781 450 662 1,112

2007 22,743 20,927 43,671 453 664 1,117

2008 23,265 21,361 44,627 456 666 1,121

2009 23,598 21,558 45,156 458 667 1,125

% Growth 8.5 7.4 8.0 2.7 1.1 1.8

21,751 20,067 41,817 446 660 1,106

ILO, Euromonitor International

Table 39 '000

Employed Population: 2010-2020

2010 Employed male population Employed female population Total employed population Male part-time employees Female part-time employees Total part-time employees
Source: ILO, Euromonitor International

2015 26,432 23,877 50,308 488 714 1,202

2020 28,249 25,278 53,527 499 732 1,231

% Growth 18.5 16.8 17.7 8.4 9.4 9.0

23,831 21,636 45,467 460 669 1,129

Table 40 '000

Unemployed Population: 2005-2009

2005 Unemployed male population 407

2006 405

2007 403

2008 402

2009 571

% Growth 40.3

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Unemployed female population Total unemployed population Male unemployment rate Female unemployment rate Unemployment rate
Source: ILO, Euromonitor International

515 922 1.8 2.5 2.2

513 917 1.8 2.4 2.1

510 914 1.7 2.4 2.0

508 910 1.7 2.3 2.0

730 1,301 2.4 3.3 2.8

41.8 41.2

Table 41 '000

Unemployed Population: 2010-2020

2010 Unemployed male population Unemployed female population Total unemployed population Male unemployment rate Female unemployment rate Unemployment rate
Source: ILO, Euromonitor International

2015 579 734 1,313 2.1 3.0 2.5

2020 610 771 1,381 2.1 3.0 2.5

% Growth -28.0 -28.0 -28.0

847 1,071 1,918 3.4 4.7 4.0

LEARNING
School Life
With busier working lives, the majority of Vietnamese parents, especially in urban areas, have to send their children to nursery, or kindergarten, at a much younger age. There are many kinds of nursery schools, from state-owned to private and foreign ones, most of which only accept children of one year old upwards, although a few accept babies from the age of four months. Whatever the type of nursery, parents have to pay fees, with higher fees for care of younger children. Almost all children go to kindergarten when they reach three years old, and at this level, as with younger children, there are state-owned, private and foreign ones. The majority of Vietnamese children go to stateowned kindergartens, as these are the most affordable; however, this means that state-owned kindergartens are over-subscribed and over-stretched. Unlike in the past, kindergartens now have to teach pupils how to read and write, and even start teaching them English before they move into primary schools at the age of six. The Vietnamese education system consists of 12 grades, divided into three levels. The primary level is compulsory, from grade 1 to grade 5. The intermediate level is from grade 6 to grade 9 (at which point the majority of students leave school), and high school is from grade 10 to grade 12. The academic year is officially from the start of September to May, and students are off school from June to August. However, many students now have to start school in August, in order to do well in the difficult national curriculum. The majority of Vietnamese students attend public schools; however, the national curriculum is criticised as being too difficult academically, leaving students little time to relax. As a result of increasing demand for an alternative, private schools both domestic and international have opened in recent years, with a curriculum combining the national programme and a school-specific element; however, the fees for such schools are quite high. After finishing high school at grade 12, Vietnamese students take two important exams. The first is the high school graduation exam and the second is the national university entrance exam. The latter can only be taken upon passing the former. Although the Government has been considering merging the two exams into one, this move is still under consideration.

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Public education remains the most common choice in Vietnam, but doubts over the curriculums lack of soft skills, the private education sector has become one of the most potentially profitable markets in recent years, with private and foreign schools opening at all levels. Besides students usual studies, they have lots of homework, extra tuition at home, in education centres or at teachers houses, and students are expected by parents to learn skills such as ICT, music or art. All Vietnamese students have to wear uniform when they go to school. Different schools have different kinds of uniforms with different designs. These uniforms are normally provided once a year by schools and they have to be bought before school starts in September. All girls at high school have to wear the traditional ao dai (long dress), while boys wear green trousers and white shirts. Students in these grades do not have to buy a specific uniform from their school, except for sportswear. Some Vietnamese schools are semi-boarding schools where children can stay from morning to afternoon during the term. Demand on sending children to such schools is said to be very high, especially in Ho Chi Minh City and Hanoi where most of parents have to work all day and have no time to pick their children up at noon. It is estimated that in the public school system, semi-boarding schools have accounted for around 90% at primary level, 63% at intermediate level and there is only one school for high school level in Ho Chi Minh City. It is very hard for public schools to become semi-boarding schools in Vietnam since an area for each school is small, and the school does not have enough money to invest because the government has regulated fees over the last 10 years. The fees, including lunch, for each pupil in semi-boarding schools is around VND50,000 per month while private schools ask for fees of around VND300,000 to VND800,000 per month. The Vietnamese education system is said to be backward and in need of change. Its curriculum, programme level, teaching methods and facilities are all in need of an overhaul and update, despite the fact that the Government has spent around 12% of its budget each year on the education sector. With these failings, it is very difficult for the Vietnamese education system to reach the international standard. Despite the move by private education into the Vietnamese market in recent years, there is no evidence that private and international education is better than that given in public schools. The perceived advantage of these alternatives is their application of improved services and the addition of teaching soft skills alongside the national curriculum.

University Life
Undergraduates enter university by passing the national university entrance exam, which is usually held at the beginning of July. Students and their families tend to favour the public universities and colleges, which are said to be better and have lower fees than private ones. It was estimated that there were around 2.4 million higher education students in 2009, an increase of 69.9% on 2005. In the past, most universities followed a semester system, in which the undergraduate programme was taken over eight semesters or four years, with students paying equal fees in each semester. However, to standardise the system with that found more internationally, the Ministry of Education and Training requested that all universities move to a credit system, with students paying fees each semester depending on the number of credits they registered to study. The majority of Vietnamese universities are located in Ho Chi Minh City and Hanoi, where land is limited, so few have dormitories/halls of residence for students. Most students, therefore, rent rooms as a form of home stay with home owners. Only the wealthier students can afford to rent a room by themselves, with several students usually sharing a room to save money. Economic reform has created high demand in jobs in the economic sector, so subjects involving economics and business are particularly popular, especially since 2007 when the financial sector and the stock market boomed. Owing to a lack of teachers in the provinces and in remote areas, the Government is encouraging students to study to become teachers by offering free courses, as a result of which the number of students graduating in education is now the highest among all degree programmes. Normally students finish university at 22 years old. Under the old semester system, it was impossible for students to shorten their university period; however, under the credit system, students can graduate sooner.

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The cost of living and studying in the big cities is quite high, especially as most students are from other provinces where the living standard is much lower. Thus demand among students for part-time jobs is very high. Students become home tutors for school students, work for promotion companies, are interviewers for research companies, waiters or waitresses, or work in fast food outlets. Universities usually have a student support centre to provide part-time job information to students. There are no official statistics about international students studying in Vietnam, nor Vietnamese students studying abroad. An increasing number of international students of varying nationalities have come to Vietnam, principally to study the language, history, culture and Vietnamese traditional music. The majority of international students in Vietnam come from Laos, Cambodia, South Korea or Japan. Meanwhile, the number of Vietnamese students studying abroad has also increased sharply in recent years, with popular degree programmes being in economics-related fields, such as business administration, finance and marketing, as well as languages, education and management. Owing to its more relaxed visa requirements and cheaper education fees, Australia is always the first choice of Vietnamese students, while the USA follows closely owing to its advanced education system. Additionally, the number of Vietnamese studying in other countries has been increasing, with the number of Vietnamese students in Canada being three times higher in 2009 than in 2006.

Adult Learning
After leaving full-time education, many adults take evening classes in order to improve their knowledge and skills, and to enhance their status in the workplace. There are several forms of adult learning, such as short courses, in-service training programmes, distance learning programmes, post-graduate degree programmes, or other higher education programmes, and these forms of adult learning are normally taught at universities or professional institutes. All forms of adult learning are paid for by the students and demand for such programmes has been very high in recent years, especially in the big cities. The most popular fields are languages, such as English, Chinese and Japanese, or economics subjects, such as business administration, finance, accounting and marketing. Within higher education, owing to a requirement for higher qualifications to meet the challenges of senior positions in companies, the demand for post-graduate degrees in Vietnam has increased sharply, especially during 2008-2009, when many people were laid off due to the financial crisis.
Table 42 As stated 2005 Pre-Primary School ('000) Primary School ('000) Secondary School ('000) Compulsory Education Commencement Age (years) School Leaving Age (years)
Source:

School Students: 2005-2009

2006 2,113 7,318 9,347 6 14

2007 2,103 6,810 9,227 6 14

2008 2,095 6,297 8,825 6 14

2009 2,077 5,849 8,396 6 14

% Growth -3.6 -24.8 -10.5

2,154 7,774 9,378 6 14

International Bureau of Education, World Data on Education, UNESCO, Euromonitor International

Table 43 number

Graduates: 2005-2009

2005 Graduates in all programmes in education in humanities and arts in social sciences, business and law 182,489 62,383 7,925 54,210

2006 210,686 78,235 7,833 59,155

2007 242,026 90,079 7,800 66,886

2008 268,815 99,053 8,689 75,426

2009 294,712 107,152 9,527 83,051

% Growth 61.5 71.8 20.2 53.2

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in engineering, manufacturing and construction in agriculture in health and welfare in unspecified programmes
Source: Note:

38,786

41,770

49,529

54,235

58,973

52.0

8,716 5,006 5,463

10,556 6,593 6,544

11,756 7,846 8,130

13,387 8,733 9,292

15,137 9,821 11,051

73.7 96.2 102.3

EUROSTAT, OECD and UNESCO, Euromonitor International Graduates are those who have successfully completed an educational programme

Table 44 As stated

Higher Education Students: 2005-2009

2005 Higher education students inc. universities ('000) Male ('000) Female ('000)
Source:

2006 1,666

2007 1,928

2008 2,131

2009 2,357

% Growth 69.9

1,387

791 596

950 716

1,099 829

1,215 916

1,344 1,013

69.9 69.9

UNESCO, Euromonitor International

EATING (INCLUDING SOFT DRINKS)

Shopping for Food and Drinks
Shopping for food is mainly carried out in traditional markets on a daily basis. However, with busier working lives, some families in urban areas shop for food in either supermarkets or traditional markets once a week, on Saturday or Sunday, resulting in supermarkets and markets being crowded at weekends. Shopping for food is traditionally a womens task, along with the housework, cooking and childcare. However, there is a trend, especially in urban areas, towards men helping their wives with the food shopping. In these cases, supermarkets are often the mens choice, as they do not have to bargain and can choose purchases more easily. However, supermarkets are not only aimed at men, but allow all customers to feel the increased comfort and convenience over the more traditional market, even though the range of products in supermarkets tends to be quite limited, as prices are fixed to ensure quality. Shopping for food in supermarkets has become increasingly popular with urban inhabitants. Most supermarkets have loyalty schemes for their customers, in which Coopmart is the pioneer and has become the strongest loyalty system. Coopmart provides three kinds of loyalty card: the first is a card for regular customers; the second is for Coopmart members; and the third is for VIP customers. Coopmart has also introduced a range of private label products, including rice, rice paper, napkins, toilet tissue, spring rolls of different kinds and frozen fish. Coopmarts private label products sell for between 3% and 20% below the equivalent branded products. Consumers are showing no preference for brands over private label versions, as long as the private labels are considered to be of good quality. In the current economic climate, the Vietnamese are paying even more attention to product prices when they go shopping, especially as food accounts for almost half of average expenditure. Traditional markets, with their more fluid pricing that can change on a daily basis, are said to more accurately reflect the high inflation in the country and how the real value of money has decreased. The Vietnamese eat rice at every meal breakfast, lunch and dinner but they do not buy rice every day, instead ordering 10kg or 20kg at a time from rice retailers. They only go to markets for fresh meat, vegetables,

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fish, seafood or fruit. Meat is the most expensive item of food, with rice, fish and seafood costing less as Vietnam is an agricultural country and has a strong fishing industry. The availability of fresh foods has a big influence on the Vietnamese diet, with inhabitants tending to eat more fresh food than packaged and processed types. In urban areas, however, inhabitants have less time to go shopping for fresh food and to cook, so are resorting to packaged and processed foods, which has increased demand in this area in recent years. Traditional markets and grocery stores are very popular in Vietnam, and are everywhere, in rural and urban areas, big cities and remote locations, small alleys and main roads. There are so many that it is impossible to come up with any official statistics on the number of traditional markets and grocery stores in Vietnam. While traditional markets usually sell a variety of goods, grocery stores do not sell fish, meat, seafood or vegetables, but only packaged products. Online shopping and TV shopping has become more popular with and familiar to Vietnamese consumers, but food is never sold via these channels. However, some retailers have provided telephone retail services for food, including Coopmart and Sai Gon Tiep Thi magazine. Food orders are received from consumers via telephone and then delivered to consumers houses as required, without any extra fee. Foods that are not genetically modified (GM) and those that are organic are a new concept in Vietnam and as yet have not become important to consumers. Most vegetables and fruit planted in Vietnam are grown using ordinary fertiliser. However, as mentioned with regard to gardening, an increasing number of Vietnamese are growing some of their own produce in order to maintain them free of the chemicals used by farmers. As water provided by the national water companies is sometimes polluted and undrinkable, most Vietnamese households, especially in urban areas, drink bottled, purified water. Additionally, it is impossible to boil water at work, in offices, so bottled water is used there, too. This has sharply increased demand for bottled water in recent years and the trend is likely to develop in coming years. Currently, La vie is the most popular brand, followed by Aquafina, Aquacool and Joy. Bottled water, canned soft drinks and snacks are sold in vending machines in public places such as hospitals, parks and theatres, in addition to sales in grocery stores and supermarkets. However, using coins to buy via vending machines is inconvenient and unfamiliar for Vietnamese consumers, so sales through vending machines are low in value and are unlikely to develop significantly over the forecast period. Impact Shopping for food is a regular activity for most Vietnamese households, via either traditional markets or supermarkets. These places are always crowded, especially at weekends. While supermarkets have to give the origin of produce for sale, traditional markets do not, thus markets usually sell imported agricultural products from China due to their cheaper prices, despite the fact that Vietnam is an agricultural country. The Vietnamese Governments encouragement of consumers to buy Vietnamese produce and products has resulted in products of Vietnamese origin being introduced in markets and supermarkets. Demand for fresh foods such as vegetables, fruit, meat, fish and seafood in Vietnam is very high, which means that it is a big market for such products. However, the prices of domestic products have been increasing over time, as Vietnam exports a huge amount to other countries. Although demand for packaged and processed food is not as high as demand for fresh food , it has been increasing owing to busier lifestyles. To take advantage of this, food producers such as Cholomex and Cau Tre have launched a range of new products to meet increasing demand, including spring rolls, stews and fish dishes. There is an increasing trend towards bottled water to replace traditional boiled water, and as a result a number of new brands have appeared in the market, including imitation ones. It is easy to buy bottled water, from traditional markets, supermarkets, convenience stores, grocery stores, vending machines, coffee shops and canteens, at affordable prices.

Dining in

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Traditionally, the Vietnamese eat breakfast, lunch and dinner at home. Vietnamese noodle soups such as Pho and Banh Canh are popular, along with bread or rice, for breakfast, while rice is an essential for lunch and dinner. Increasingly, however, the Vietnamese have no time in their busy schedule to cook three times a day, and so they go out for breakfast, get lunch from a shop near the workplace, and eat dinner at home. Traditional Vietnamese meals normally include rice, fish or meat, and soup. Depending on the region, tastes change between the north and south of the country, making Vietnamese cuisine quite varied. Vietnamese meals are further altered with different kinds of sauces, especially fish sauce or soya sauce. When preparing meals, most Vietnamese prefer to use fresh ingredients rather than prepared ones, which they believe makes meals more delicious and healthier. The Vietnamese prefer cooking at home to eating out. Family meals are believed to connect family members, and general opinion is that families that do not eat together tend to break up more easily. However, busier lifestyles are changing these habits and Vietnamese women now sometimes have working dinners, so they cannot cook, and their families instead eat out or buy ready meals. In fact, demand for eating out and ready meals in Vietnam has been increasing in recent years, especially at weekends when people like to go out to eat for leisure. At weekends, families on a higher income might invite friends to dinner at home. They may eat traditional home-cooked meals or other styles such as barbecues, stews or foreign cuisine such as Thai, Korean or Japanese food. Impact As the lunch break at work is usually only an hour, there is not enough time for people to go home for lunch, especially those who work in big cities at a lengthy commute from their home, so workers buy lunch from local shops. Demand for lunch outlets in the major cities is very high and shops are always crowded at noon. There are many kinds of shops selling lunches, from cheaper ones priced at less than VND10,000 for low-income workers and students, to mid-standard ones at around VND20,000-VND40,000 for white-collar or middleincome workers, and premium versions. Owing to high demand for lunches, many shops have opened, while coffee shops and restaurants also sell lunches. The majority of Vietnamese households cook and eat dinner at home every day. However, sometimes they may buy ready-prepared meals to save time when they are busy or at the weekend. On these occasions, they may not eat rice, instead going for foreign cuisine. Many restaurants, from small to premium types, now sell readyprepared meals, while demand for eating out is also increasing. Of course, all Vietnamese eat local cuisine, but with the inflow of foreigners into Vietnam of many different nationalities, meals typical of other countries are becoming better known in Vietnam. The Vietnamese seem to favour Asian foods rather than Western ones, possibly owing to the fact that there are more Asians coming from South Korea, Japan and Thailand, and so the influence of these is higher than those coming from Western countries. Restaurants selling Asian foods such as Korean Noodle Restaurant and Ashima Mushroom Hotpot are attracting more and more Vietnamese who wish to eat out.

Dining Out
The busier life is, the harder work is, the more complicated social relationships are, the higher income is, the higher the demand for eating out. Eating out can save time when people are too busy, help people relax after a long day at work, help to maintain relationships with friends and business associates, not to mention meet the higher demand for leisure when a person becomes wealthier. It is hard to identify how many people dine out, although income from the foodservice sector has increased sharply from VND259.6 trillion in 2004, to VND430.2 trillion in 2008, an increase of 65.7%. An observation of restaurants, fast food and retail outlets at lunch time in the big cities reveals their popularity, while restaurants are often crowded in the evening. As for choice for eating out, people can go to street stalls for shellfish or Vietnamese noodles, or go to restaurants for stews and foreign cuisine, while fast food outlets such as KFC, Lotteria and Jollibee are also popular.

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Impact As a result of the increasing number of people who buy lunch near to their workplace, especially in urban areas, a catering industry has developed to provide, mainly, lunches for large companies, particularly manufacturing and other industry. Most of the smaller shops selling lunches, serving office buildings, are owned by individuals, rather than being chains. The rising demand for foodservice in the evening has resulted in diversity in restaurants and food retail outlets. Influenced by the cultures of South Korea, Thailand and Japan (the former, in particular, through the movies), more Vietnamese have started to eat Korean food and the number of outlets for Korean noodles, Japanese sushi or Thai stews has risen dramatically. The increasing number of people eating out in the evening has also affected the beverage industry, particularly that of beer. After a hard day at work, beer seems to be the beverage of choice, even for women, and there is a wide variety of beers available in Vietnam, from domestic to imported brands, and the quantity of beer being consumed has increased significantly.

Caf Culture
As Vietnam is a major grower and exporter of coffee, domestic coffee consumption is understandably high, and a cup of coffee in the morning is a regular habit for most Vietnamese men. Equally, the impact of the French lifestyle when Vietnam was its colony has influenced Vietnamese to drink fresh coffee rather than coffee from a machine or instant coffee. Most Vietnamese go to coffee shops to drink coffee, but people also pick up a coffee from street stalls in the morning before work. Coffee from coffee shops is, of course, more expensive than that of street stalls. There are no coffee machines in public places in Vietnam, as the Vietnamese do not like coffee from a machine; however, if time is limited, instant coffee may be used instead of fresh coffee. Impact With increasing demand for coffee and the associated desire to relax in leisure time, the number of coffee shops opening in Vietnam, as well as the quantity of coffee consumed, is expected to increase over the forecast period. In addition to fresh coffee, it is predicted that instant coffee sales are likely to increase as people look to save time in their busy lives. The Vietnamese do not only go to coffee shops in the morning: coffee shops are usually crowded all day. Lower-level coffee shops usually have a TV showing a movie or other free entertainment to attract customers, while medium- and premium-level coffee shops are not only a place to drink coffee, but are flexible offices, places to gather with friends or romantic meeting places for couples. These coffee shops are usually equipped with wi-fi and are decorated in an attractive style. In recent years, some coffee shops have become locations for book or album launches, or even small live shows by singers, and this trend seems likely to continue over the forecast period. Medium- and premium-level coffee shops are, as a result, trying to create unique characteristics. For instance, CIAO Coffee shops successfully opened a chain of book-store coffee shops, which created a movement towards book-store coffee shops in Ho Chi Minh City, which has spread to Hanoi and other big cities and provinces.
Table 45 VND billion 2005 Bread and cereals Meat Fish and seafood Milk, cheese and eggs Oils and fats 18,887 34,555 16,487 17,339 7,528 2006 21,584 39,304 19,172 20,422 8,730 2007 25,812 46,350 23,055 24,745 10,386 2008 33,743 61,339 30,933 33,428 13,668 2009 37,366 68,985 34,863 38,139 15,236 Consumer Expenditure on Food (Current Value): 2005-2009

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Fruit Vegetables Sugar and confectionery Other food TOTAL

Source:

16,784 25,737 3,631 51,676 192,625

19,458 29,808 4,131 59,513 222,121

23,460 35,601 4,846 70,640 264,896

31,657 47,467 6,310 93,380 351,924

36,012 53,556 7,040 104,317 395,514

National statistical offices, OECD, Eurostat, Euromonitor International

Table 46 VND billion

Consumer Expenditure on Food (Constant 2009 Value): 2005-2009

2005 Bread and cereals Meat Fish and seafood Milk, cheese and eggs Oils and fats Fruit Vegetables Sugar and confectionery Other food TOTAL
Source: Notes:

2006 30,777 56,045 27,338 29,121 12,448 27,746 42,505 5,891 84,862 316,732

2007 33,810 60,711 30,198 32,411 13,604 30,729 46,632 6,347 92,527 346,970

2008 36,107 65,635 33,099 35,769 14,626 33,874 50,791 6,751 99,920 376,572

2009 37,366 68,985 34,863 38,139 15,236 36,012 53,556 7,040 104,317 395,514

% Growth 29.2 30.4 38.1 43.6 32.1 40.1 35.9 26.6 31.8 34.1

28,924 52,919 25,248 26,553 11,529 25,703 39,415 5,561 79,138 294,991

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

Table 47 VND billion

Consumer Expenditure on Food (Constant 2009 Value): 2010-2020

2010 Bread and cereals Meat Fish and seafood Milk, cheese and eggs Oils and fats Fruit Vegetables Sugar and confectionery Other food TOTAL
Source: Notes:

2015 52,744 105,773 51,268 60,733 23,350 56,982 81,964 10,440 150,264 593,519

2020 70,537 150,922 71,710 89,471 33,172 84,248 117,444 14,432 205,071 837,008

% Growth 78.3 104.1 92.8 117.4 103.6 115.5 103.8 93.2 85.4 97.9

% CAGR 6.0 7.4 6.8 8.1 7.4 8.0 7.4 6.8 6.4 7.1

39,569 73,932 37,202 41,150 16,293 39,094 57,621 7,470 110,624 422,954

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

Table 48 VND billion

Consumer Foodservice by Type (Current Value): 2004-2008

2004 Consumer foodservice by type and chained/ independent Cafs/bars Full-service restaurants Fast food Street stalls/kiosks Pizza consumer foodservice
Source:

2005 304,241

2006 346,671

2007 389,449

2008 430,183

259,576

14,610 149,480 3,001 92,485 91

17,828 166,621 3,496 116,297 142

22,657 181,763 4,154 138,096 223

27,346 200,966 5,079 156,058 344

32,144 220,258 6,075 171,705 541

National statistical offices, Euromonitor International

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Table 49 VND billion

Consumer Foodservice by Type (Constant 2008 Value): 2004-2008

2004 Consumer foodservice by type and chained/ independent Cafs/bars Full-service restaurants Fast food Street stalls/kiosks Pizza consumer foodservice
Source: Notes:

2005 441,158

2006 468,108

2007 482,916

2008 430,183

% Growth 5.5

407,563

22,940 234,700 4,713 145,212 143

25,851 241,604 5,069 168,633 206

30,594 245,434 5,609 186,471 302

33,909 249,198 6,298 193,511 427

32,144 220,258 6,075 171,705 541

40.1 -6.2 28.9 18.2 277.7

National statistical offices, Euromonitor International Constant value at 2008 prices

DRINKING
Drinking Habits
The Vietnamese, men in particular, have a long-standing tradition of drinking. Being a traditional Eastern country where men are considered the pillars of family society, a strong man is expected to be able to hold his drink this opinion remains unchanged today, meaning that the majority of Vietnamese men drink. Additionally, an increasing number of women are starting to drink, with the result that the alcoholic beverages market has been increasing significantly in recent years, in terms of both quantity and value sales. In terms of value, consumer expenditure on alcoholic beverages in Vietnam in 2009 amounted to VND17.6 trillion, an increase of 29.7% from 2005, in constant 2009 values. Of this, 59.6% was expenditure on spirits. In terms of quantity of alcoholic drinks, according to the Vietnam Beverage Association (VBA), the amount of beer consumed per capita is now around 28 litres per year, with the total amount of beer consumed in 2009 reaching around 2.5 billion litres. The amount of alcohol in general consumed is around 4 litres per head per year. Most Vietnamese have a drink in the evening, after work, while some have an alcoholic drink at noon. More highly educated people account for 77% of drinkers, according to a survey conducted in 2006 by the Institute of Health Strategy and Policy. Normally, after work people do not go home, but instead go out to a pub, bar or restaurant with friends or business associates to have a drink. Vietnamese men, in particular, are set in the habit of drinking after work, which means that eating places, pubs and bars are always crowded in the evening. A person is considered to be abusing alcohol if they drink more than 330 ml of beer with 5% alcohol, or more than 30 ml of alcohol with 30% alcohol per day for men, and more than 220 ml of beer with more than 20 ml of alcohol per day for women. However, at this standard, most Vietnamese who drink, abuse alcohol, regardless of their age. According to a survey conducted in 2006 by the Institute of Health Strategy and Policy, among alcohol abusers, farmers account for the highest share, at 28%, while those in the business sector account for 26% and those who work for the public sector account for 17%. Alcohol consumption in Vietnam has been increasing sharply in recent years. While the average annual growth rate of gross national product (GNP) per capita in Vietnam is around 5%-6%, the average growth rate of alcohol consumption is said to be around 8%-10% per year. The significant increase in alcohol consumption is said to be owing to a number of factors, including long-standing customs, increasing incomes and living standards, and the significant development of the alcohol market. Although all Vietnamese know that drinking is harmful to health and may cause diseases of the heart, liver and stomach, and although the number of deaths caused by drinking and drinking-related illness has been increasing significantly, they still drink. Surprisingly, it is highly educated Vietnamese who predominate, for them drinking

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being a part of socialising to make business connections, make friends, maintain relationships and increase business. There has not been any move by government to reduce alcohol consumption in the country; however, regulations introduced to regulate consumption include Decree 40/2008/ND, which banned the sale of alcohol to under 18s, while Education Law No.38/2005/QH11 banned students from drinking during study time, Decree 150/2005/ND-CP banned drinking during work hours, and alcohol distribution is regulated through No. 10/2008/TT, which prevents the sale of alcohol via vending machines, at schools, hospitals and stations. The implementation of these regulations, though, is weak and needs consideration. Beer is the most popular drink in urban areas, while Vietnamese spirits are popular in rural areas. With higher incomes and living standards, urban inhabitants drink beer on all occasions, from dinner with the family or eating out with friends, to weddings and birthdays. Favourite brands of beer include Heineken, 333, Tiger and Saigon. Lower incomes and customs mean that those living in rural areas tend to drink local spirits instead, on an almost daily basis, and some of these spirits have become popular across the country, including Bau Da, Go Den, Vokka Hanoi and Lang Van. Impact Vietnam has a long-standing tradition of drinking and a large drinking population, so is a profitable market for the beverages industry in general, and alcohol beverages in particular. Vietnam has a high drinking rate among South-East Asian countries, although it is lower than China, Japan and Western or European countries. Domestic beer production has increased significantly in recent years. The VBA reveals that production capacity in 2009 was 2.4 billion litres, some 41.2% higher than the 1.7 billion litres produced in 2006. It was estimated that in 2010 Vietnam would produce 2.7 billion litres of beer, which, in addition to imported beer, would meet the increasing demand in the country. The VBA also reveals that there are around 350 domestic producers of beer, with 20 factories with production capacity of more than 20 million litres per year, 15 factories with capacity of more than 15 million litres per year, and more than 260 factories with capacity of less than one million litres per year. Changes in tax policy have allowed predictions that the beer market will expand faster in coming years. In 2010 imported beer for business had to pay three kinds of taxes: import duty of 47%, special consumption tax of 45% and VAT of 10%. Special consumption tax, however, has fallen from 75% in 2009, and will be 30% in 2012. Beer imports, as a consequence, are likely to increase in the near future, although this could contribute to Vietnams trade balance deficit. Vietnam is a good market for alcohol in general, especially in rural areas. According to the VBA, the growth rate of this market during 2002-2007 was on average 14% per year. The majority of drinkers consume local Vietnamese spirits rather than whisky, brandy, cognac, wine and champagne, which are imported and thus have a higher price. These imported spirits account for a tiny share of around 4% of the market. Domestic production is from two channels: one is industrial production; the other is production by Vietnamese households, accounting for almost 80% of total quantity production.

Shopping for Alcoholic Beverages

It is very easy to buy alcohol in Vietnam, even if you are under-age. Alcoholic drinks are available widely throughout the country, from supermarkets, specialist stores, grocery stores, pubs and bars. Among these, specialist outlets are the most popular channel for beer purchases. These specialists are usually the direct or second dealers of beverage producers, and they may sell one or more than one brand of beer in addition to soft drinks. They are usually cheaper and often deliver to homes free of charge if consumers buy a large quantity. The majority of Vietnamese spirits are sold by grocery stores. With their relatively cheap prices, it is easy for those on a low income to buy spirits from this channel. Imported spirits and wine are usually bought from specialist stores and supermarkets, although with their high prices, only high-income urbanites tend to buy these products. Alcoholic drinks such as spirits, wine and beer are sold in supermarkets and hypermarkets, although few people buy them in these places. One reason is that it is quite difficult to get bottles of spirits and cans of beer home by

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foot or on a motorbike. Therefore people who buy alcohol from the supermarket tend to be those who are purchasing a high quantity, as the supermarket will deliver to their home. Additionally, the coverage of supermarkets and hypermarkets in Vietnam at present is not high, and they are mainly located in big cities, so the channel is unpopular simply owing to its rarity. The Vietnamese prefer cans for beer and bottles for spirits and wine, although canned beer is usually more expensive than bottled beer. There are some Vietnamese spirits that come in plastic bottles, usually because producers want to lower production costs and thus prices, in order to sell more.
Table 50 VND billion 2005 Alcoholic drinks Spirits Wine Beer Tobacco TOTAL
Source:

Consumer Expenditure on Alcoholic Beverages and Tobacco (Current Value): 2005-2009

2006 10,239 6,120 1,462 2,656 6,998 17,237

2007 12,052 7,199 1,732 3,121 8,092 20,144

2008 15,771 9,403 2,278 4,090 10,435 26,206

2009 17,566 10,469 2,543 4,554 11,446 29,011

8,844 5,324 1,257 2,263 6,211 15,055

National statistical offices, OECD, Eurostat, Euromonitor International

Table 51

Consumer Expenditure on Alcoholic Beverages and Tobacco (Constant 2009 Value): 2005-2009

VND billion 2005 Alcoholic drinks Spirits Wine Beer Tobacco TOTAL
Source: Notes:

2006 14,600 8,727 2,085 3,788 9,978 24,579

2007 15,786 9,429 2,269 4,088 10,600 26,385

2008 16,876 10,062 2,438 4,376 11,165 28,041

2009 17,566 10,469 2,543 4,554 11,446 29,011

% Growth 29.7 28.4 32.0 31.4 20.3 25.8

13,545 8,154 1,926 3,465 9,511 23,056

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

Table 52

Consumer Expenditure on Alcoholic Beverages and Tobacco (Constant 2009 Value): 2010-2020

VND billion 2010 Alcoholic drinks Spirits Wine Beer Tobacco TOTAL
Source: Notes:

2015 24,777 14,924 3,543 6,310 15,319 40,097

2020 33,337 20,266 4,722 8,349 21,527 54,864

% Growth 80.8 84.2 77.0 75.0 81.5 81.1

% CAGR 6.1 6.3 5.9 5.8 6.1 6.1

18,439 11,000 2,668 4,772 11,862 30,301

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

SMOKING
Smoking Habits

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Vietnam has one of the highest smoking rates in the world, according to the World Health Organization (WHO). The number of smokers in 2009 were estimated to account for around 23% of the total adult population, of which 42.8% of adult males and 2.8% of adult females were smokers. The number of younger smokers is believed to be increasing, although owing to lower growth rates, their share of the total population is declining. The Ministry of Health estimates that 43.6% of people aged 17-24 smoke. Vietnamese women and children are impacted by smoking, as around two-thirds of Vietnamese households have at least one smoker. More than 40% of males and 1.3% of females working in the health sector are smokers. The Ministry of Health also reveals that the number of people who die each year from smoking-related diseases is around 40,000, while the WHO estimates that the number of people who will die in 2020 due to smoking-related diseases will be higher than the total number of those who die from HIV/AIDS, tuberculosis, traffic accidents and suicide. Although Vietnam has been trying to reduce the smoking rate through regulations and tax increases on tobacco, it seems to be almost impossible to reduce the number of smokers. This seems to be for a number of reasons: the first is that Vietnam has a long-standing custom of smoking, with Vietnamese men being expected to both smoke and drink as a sign of strength and maleness. Smoking is also seen as a very sociable habit, helping to make friends and maintain relationships. Some people even give cigarettes and tobacco as a gift on special occasions such as funerals and weddings. The second reason is the cheap price of tobacco in Vietnam due to low taxes. According to the WHO, countries that have effectively controlled smoking have taxes on cigarettes and tobacco of around 65%-80%, while the highest tax rate on tobacco products in Vietnam is 45%. This means that the average price of cigarettes is one of the lowest in the world, at just around VND3,500 per packet of 20. Research on tobacco conducted by the Ministry of Health in 2010 found that cigarette prices had fallen by 5% from 1996-2006 and had increased little since that time, making cigarettes and tobacco products affordable for most Vietnamese. Third, government regulations and control over illicit trade are ineffective, and although the Vietnamese Government has issued regulations on advertising, warning messages on cigarette packaging, smoking areas, and illicit trade, few of these regulations are met. Anyone of any age can buy cigarettes and tobacco, be they legal or illegally imported, on streets across the country. Although advertising of cigarettes and tobacco are restricted, the authorities have not stopped other types of cigarette marketing. For most Vietnamese, smoking is a normal activity for men, so smoking to some extent is acceptable in many places, even public places. Some people may dislike smoking, but they keep quiet on the subject, and despite knowing the health risks of smoking, people continue to smoke. The impact of more open lifestyles, higher living standards and Western influences have contributed to an increase in Vietnamese women smoking. Currently, cigarette producers are targeting women with marketing, in particular for sales of low-tar cigarettes.

Shopping for Cigarettes and Tobacco

Although the Government has regulated cigarette sales to children, anyone can buy cigarettes in Vietnam without punishment. In rural areas, in particular, fathers often ask their children to go and buy cigarettes for them. The majority of smokers buy cigarettes from kiosks on the street or from grocery stores, rather than supermarkets. Cigarettes cannot be sold from vending machines. It is rare for people to buy cigarettes and tobacco in bulk, unless it is being given as a gift; instead, smokers tend to buy one pack at a time. There are many brands of cigarettes sold in Vietnam, from domestic to imported brands, some being illegal. High- and middle-income Vietnamese prefer 555, Dunhill or Mild Seven, while lower-income consumers smoke Mai and Hoa Binh. In general, though, all Vietnamese smokers prefer imported cigarettes to domestic brands. Impact Vietnam is a profitable market for tobacco producers, but there are barriers against newcomers to the market. Currently, there are four main players in this market. Owing to the health risks of tobacco products, Decree

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No.119/2007/ND-CP (issued on 18 July 2007) declared the monopolistic powers of the Government in producing cigarettes and other tobacco products, in which the Vietnam National Tobacco Corporation (Vinataba), on behalf of the Government, has charge of controlling domestic cigarette production and import of foreign brands. No foreign cigarette producers are allowed to open factories in Vietnam, instead having to sign contracts with Vinataba or its affiliates to produce cigarettes. Among foreign cigarette producers, British American Tobacco (BAT) is the most popular in Vietnam, following by Japan Tobacco International (JTI) and Philip Morris S.A.
Table 53 Smoking Prevalence: 2005-2009 2005 Male (% of male adult population) Female (% of female adult population) TOTAL (% of total adult population)
Source: WHO, OECD, Euromonitor International

2006 43.8 3.1 23.2

2007 43.5 3.0 23.0

2008 43.0 2.9 22.7

2009 42.8 2.8 22.6

44.0 3.1 23.3

PERSONAL APPEARANCE
Shopping for Toiletries and Cosmetics
For most Vietnamese, traditional markets are where they can buy everything they want, so these are important channels for all products, including toiletries and cosmetics. In urban areas, middle- and high-income consumers may go to supermarkets and premium shopping centres to buy these products, where imported brands are sold. The only direct-selling brand for cosmetics in Vietnam is Oriflame. This channel is not so popular in Vietnam, and thus is small in terms of volume sales. While toiletries are necessary, cosmetics are considered a luxury in Vietnam. In urban areas, where inhabitants enjoy higher incomes, most women use cosmetics daily at work, and when attending events and special occasions. Women in rural areas, however, seldom use cosmetics. Spending on cosmetics per capita in Vietnam remains insignificant, although some growth is expected over the forecast period. Impact Although traditional markets are the most popular channel for Vietnamese women to go shopping for toiletries and cosmetics, the quality and origin of these products sold in markets are unreliable. However, cheap prices mean that consumers continue to buy from this channel, from low-end to premium brands, both genuine and fake. An increasing number of well-known, imported cosmetics are being sold in premium shopping centres in urban areas. Owing to an increasing number of high-income inhabitants, the number of consumers going to these places to shop for cosmetics has increased sharply. Importers and authorised distributors have also established and increased the number of outlets to sell genuine branded products. Supermarkets have become one of the most important channels in which to sell toiletries, and consumers seem to prefer to buy these products through this channel. The price of toiletries is similar in supermarkets, traditional markets and grocery stores, but kiosks, markets and grocery stores have the disadvantage of less space, and so must limit their range of products, while in supermarkets, with a wide range of products, consumers feel that they can select the best product for them. As a result, an increasing number of people are buying toiletries from the supermarket channel.

Attitudes Towards Hair and Beauty

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With an improvement in living standards comes increasing concern for beauty products, which has increased for both men and women, especially in urban areas. They are more concerned about their appearance, from hair to clothes, shoes, make-up and style. Traditionally, Vietnamese women prefer long hair for its femininity; however, this preference has altered, especially among the younger generation who, impacted by modern lifestyles and Korean movies, are turning to short hair and sometimes dynamic colouring. While traditionally Vietnamese men see no need to use cosmetics, some men have now started to use moisturising cream, cleansing foam and lotions. Young men, in particular, have also been influenced by Korean style and boy bands, and there have been more and more men using grooming products such as hair gel to create hairstyles. Make-up has also been changing in Vietnam. In the past, natural or Western make-up styles were favoured by most Vietnamese women; however, in recent years, with so many Korean movies on TV, Vietnamese women have started to use make-up in Korean styles to assimilate Korean movie stars. Although Vietnam is a sunny country, most people do not use sun-care products every day. Vietnamese women tend to wear a hat, mask, gloves and sunglasses to protect their skin from the sun, rather than using sun cream. Only some urban inhabitants use sun-care products, usually when they go to the beach. Higher incomes have increased the number of Vietnamese women having plastic surgery in order to make themselves more beautiful. Some want to be like Korean movie stars, while others want to appear more attractive to their husbands or boyfriends. Some feel that their life will change if they alter their face or body. The increasing number of plastic surgeons and centres has reduced the price of surgery, also influencing the amount of surgery being undergone. Impact Shampoo and hair conditioner are considered essential products, and there is increasing awareness of other hair care products such as hair cream and hair lotion. With a population of more than 80 million, Vietnam is a market with significant potential for profit in this area, and the market is not yet saturated. Vietnam is a hot country and the air is very polluted by dust and smoke, so it is not only women who use cleansing foams, but men also, resulting in a significant rise in demand for this product, now seen as essential. Mens cosmetics have been increasing significantly in recent years, although the market is nowhere near as large as that for women. With more than half of the Vietnamese population being male, of which the younger generation account for a high proportion, cosmetics for men are predicted to develop quickly in coming years. Many Vietnamese women wanting plastic surgery choose to go to Thailand or South Korea for this. To meet this increasing demand, more centres have opened to provide the requisite services. Despite some negative effects of plastic surgery, the numbers wanting surgery continue to increase and the market is forecast to rise sharply in coming years.
Table 54 VND billion 2005 Colour Cosmetics Fragrances Hair Care Men's Grooming Skin Care
Source:

Expenditure on Cosmetics and Toiletries (Current Value): 2005-2009

2006 291 214 2,221 312 777

2007 350 242 2,335 346 880

2008 409 280 2,449 378 1,003

2009 483 328 2,580 411 1,156

243 189 2,085 278 665

National statistical offices, Euromonitor International

Table 55

Expenditure on Cosmetics and Toiletries (Constant 2009 Value): 2005-2009

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VND billion 2005 Colour Cosmetics Fragrances Hair Care Men's Grooming Skin Care
Source: Notes:

2006 403 296 3,073 432 1,075

2007 447 310 2,984 442 1,125

2008 451 308 2,697 416 1,105

2009 483 328 2,580 411 1,156

% Growth 34.0 16.7 -16.7 -0.5 16.9

361 281 3,099 413 989

National statistical offices, Euromonitor International Constant value at 2009 prices

FASHION
Fashion Trends
The fashion industry in Vietnam is underdeveloped and the number of fashion designers is very small, meaning that clear fashion trends in Vietnam are few. In general, fashion style in Vietnam is a mix of many countries influence, with Korean style impacting strongly on Vietnamese fashion trends. The Vietnamese have casual wear for their daily life, with significant differences between the old and the young. Older people wear more traditional clothes, especially those living in rural areas, while young people are more modern. Casual wear for the old may be the ao ba ba, while that of the young may be jeans and T-shirts. Smart clothing is not compulsory in every workplace. While some companies require employees to dress in ao dai, skirts or smart trousers with shirts, and some require waistcoats, due to the hot, rainy weather in Vietnam, smart clothing is inconvenient and uncomfortable, so simple skirts and trousers with shirts are preferred. Vietnamese people usually dress-up for important, special and traditional occasions. For traditional or national ceremonies, women usually wear ao dai, while men wear suit and tie. For parties in the evening, women may dress-up in long dresses or fashionable dresses with make-up and hair styled, while men may dress more simply in just trousers and shirts. The Vietnamese like fashion, especially the younger generation, but owing to an underdeveloped fashion industry, they cannot follow and buy the latest fashions. However, domestic designers are trying to design fashions suitable for Vietnamese, but following international trends. As a consequence, clothes in the shops are changed regularly and young people frequently alter their style to the latest trends. Vietnamese consumers are increasingly aware of clothing brands since they have been imported into Vietnam, and CK, Levis, Giordano and Bossini, for example, are more and more well known. However, internationally branded clothes are usually unaffordable for most Vietnamese, so many people buy well-known domestic brands such as PT 2000, Ninomaxx, N&M and MEM. Equally, some consumers have started to buy clothes designed by well-known Vietnamese designers, such as Minh Hanh, Vo Viet Chung and Si Hoang, although, of course, clothes made by these designers are more expensive than mass-produced brands. The average height of the Vietnamese has increased over the last 25 years, with the average height of a woman now 153.9cm, while that of a man is 164.3cm. The average height of Vietnamese adults is now nearly the same as countries such as Japan (153.4cm for women and 164.5cm for men), Thailand (155.0cm for women and 165cm for men) or China (155cm for women and 164cm for men). The average height of the Vietnamese has increased by 6.1cm for men and 4.9cm for women over the last 25 years. Impact Demand for casual wear has risen along with spending power, as consumers buy new clothes more frequently. As a result, the number of clothing manufacturers has increased, with some of these successfully building their brands within the country. Consumers no longer buy based on quality, but on style.

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There is an increasing trend towards smart clothing in the workplace, as companies look to appear more professional. Professional tailors with designers tend to be the prime producers of smart work wear. Beauty salons are usually crowded at weekends, with consumers having professional make-up done for attending parties and weddings. These occasions also inspire consumers to make drastic alterations to their appearance, such as new hair styles or dying their hair a different colour. Equally, visiting a beauty salon is considered a form of relaxation, with consumers having hair and skin treatments. In addition to well-known brands from domestic designers and branded imports, there is also a huge amount of unbranded clothing sold in the market. These clothes tend to be both fashionable and cheap, and with many shops selling these kinds of clothes, they are attracting a lot of frequent, regular customers.

Shopping for Clothes, Shoes and Luxury Goods

The combination of higher incomes and cheaper prices have meant that spending on clothing and footwear in Vietnam has increased over time. In 2009 VND 36.8 trillion was spent on clothes and VND 6.9 trillion on footwear, an increase of 24.6% and 26.6% on 2005, respectively, in constant values. Although expenditure on clothing and footwear has been increasing significantly in terms of value sales, its share of consumer expenditure has been decreasing. According to the household living standards survey conducted by the GSO in 2008, the share of spending on clothing, hats and footwear accounted for 4.2% of total expenditure in that year, decreasing from 4.5% in 2005 and 5.0% in 2002. Most consumers buy clothing and footwear from traditional markets. The majority of clothing and footwear sold there is unbranded, often made in China, and thus is of a lower price than clothing and footwear bought in shops. Middle- and high-income consumers usually go to specialist shops, fashion stores, department stores and premium shopping centres to buy clothing and footwear. Footwear stores include Dong Hai, Hong Thanh, Hong Hanh and Vinagiay, while premium clothing and footwear are sold in Diamond Department Stores, Parkson Shopping Centre, Tax Shopping Centre and Zen Plaza. Big cities such as Ho Chi Minh City and Hanoi have established fashion areas, where many clothes shops gather together. For instance, Nguyen Trai Street or Nguyen Dinh Chieu Street are considered the fashion areas of Ho Chi Minh City, and with lots of shops along the streets it is easy for consumers to browse and buy. Traditional markets are also the key outlet for consumers for jewellery and watches, perfume and accessories, although, as previously mentioned, the quality and origin of products sold in traditional markets is not always clear. Consumers who require guaranteed high quality products can buy from specialist shops, such as Saigon Jewellery Company or Phu Nhuan Jewellery Company, or from department stores. Shopping centres also have collections of shops where items such as perfume and watches can be purchased. Online and TV retail in Vietnam are as yet in the early stages of development, with the majority of products sold online and on TV being household products and consumer durables rather than clothing, footwear or jewellery. The Vietnamese tend to want to try and see an item before buying it, especially for luxury, valuable goods, so it seems unlikely that clothing, footwear, jewellery or luxury goods will be bought online in the foreseeable future. Impact Clothes shops are considered to have mid-range prices, compared with low prices in traditional markets and high prices in premium shopping centres. Most clothes sold in these fashion stores are selected and imported from abroad at small volumes, and are thus relatively unique. Therefore, although prices might be quite expensive for many Vietnamese, they are seen to offer a degree of originality and value for money, particularly for residents of urban areas. Vietnamese consumers are increasingly brand conscious, and the increase in incomes in the country has resulted in more and more consumers shopping in department stores and other premium outlets for clothing, footwear and luxury, imported goods. As a result, new outlets are being opened all the time, selling premium products to Vietnamese shoppers, such as Parkson Hung Vuong, Parkson Tan Son Nhat, Vincome Centre and Now Zone.

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Table 56 VND billion

Consumer Expenditure on Clothing and Footwear (Current Value): 2005-2009

2005 Clothing Clothing materials Garments Other clothing Clothing cleaning, repair and hire Footwear TOTAL
Source:

2006 21,905 909 17,919 1,723 1,355 4,100 26,005

2007 25,378 956 20,873 2,000 1,548 4,753 30,131

2008 33,147 1,136 27,400 2,607 2,005 6,215 39,363

2009 36,828 1,156 30,569 2,886 2,217 6,917 43,745

19,293 805 15,769 1,524 1,195 3,568 22,862

National statistical offices, OECD, Eurostat, Euromonitor International

Table 57 VND billion

Consumer Expenditure on Clothing and Footwear (Constant 2009 Value): 2005-2009

2005 Clothing Clothing materials Garments Other clothing Clothing cleaning, repair and hire Footwear TOTAL
Source: Notes:

2006 31,236 1,296 25,552 2,456 1,932 5,847 37,082

2007 33,240 1,252 27,341 2,620 2,028 6,226 39,467

2008 35,469 1,216 29,319 2,790 2,145 6,650 42,120

2009 36,828 1,156 30,569 2,886 2,217 6,917 43,745

% Growth 24.6 -6.2 26.6 23.6 21.1 26.6 24.9

29,546 1,232 24,150 2,334 1,830 5,464 35,011

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

Table 58 VND billion

Consumer Expenditure on Clothing and Footwear (Constant 2009 Value): 2010-2020

2010 Clothing Clothing materials Garments Other clothing Clothing cleaning, repair and hire Footwear TOTAL
Source: Notes:

2015 52,970 1,016 44,773 4,067 3,114 9,706 62,676

2020 71,764 901 61,363 5,401 4,099 12,684 84,448

% Growth 85.2 -19.4 90.1 79.6 75.9 73.6 83.4

% CAGR 6.4 -2.1 6.6 6.0 5.8 5.7 6.3

38,742 1,118 32,287 3,006 2,331 7,308 46,051

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

HEALTH AND WELLNESS

Healthcare
The Vietnamese healthcare system is underdeveloped in comparison with neighbouring countries. While the countrys total population has increased significantly since the 1980s, the number of health establishments has not increased at the same rate. There were 13,450 health establishments in 2009 in the public sector, an increase of 3.7% on 1995. This means that health establishments, especially hospitals, are always oversubscribed, while facilities and equipment are said to be out of date.

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In addition to the public healthcare system, private healthcare has been established. Currently, there are an estimated 30,000 private clinics and 36 private hospitals with 2,538 beds, of which four are owned by foreign companies. However, due to a lack of doctors, these private hospitals employ some full-time doctors and some part-time ones from public hospitals. The WHO ranks Vietnam in 51st position of 191 countries in terms of meeting the countrys health demands. None of the 1,002 Vietnamese public hospitals nor the 36 private ones meet the international standard of the Joint Commission International (JCI), which recognises hospital healthcare quality and the meeting of healthcare demand domestically and internationally. There are two kinds of healthcare access in Vietnam: one is by public health insurance and one is called ondemand healthcare. People who buy health insurance from the Government are entitled to free healthcare in registered hospitals and health centres. In non-registered centres, they must pay full cost or, in some cases, 70% of fees. Only children under six years old enjoy 100% free hospital care. However, as the quality of healthcare under government health insurance is reputably very bad, some consumers instead choose the on-demand healthcare service, under which they pay higher fees but receive better quality service and medicine. Most Vietnamese consumers would prefer to use the on-demand service, owing to the bad reputation of the government health insurance, but owing to their low incomes, they cannot afford it. Demand for medicine has been increasing alongside demand for healthcare, making medicine consumption per head in Vietnam increase from US$6 in 2001 to US$16.45 in 2008, and predicted to reach US$25 by 2015. Total medicine consumption in 2008 reached US$1.4 billion, an increase of 25.4% on 2007, according to the Ministry of Health. According to the Ministry of Health, domestic medicine production meets around 50.2% of the countrys demand, with the remainder being satisfied by medicines imported from abroad from pharmaceutical companies. As pharmaceutical companies have spent a lot of money on advertising, commissions to doctors and dealers, and also due to ineffective government control, the price of medicines in Vietnam has increased sharply in recent years. In addition to modern medical treatments and medicines, the Vietnamese use traditional medicines. As a generalisation, most urban inhabitants prefer modern medicine, while traditional medicine is preferred in rural areas. An estimated 30% of patients are treated with traditional medicines annually. GSO figures reveal that there were 60,800 doctors in Vietnam in 2009, an increase of 6.1% on the previous year, and 18% on 2005. On average, there are 7.1 doctors per 10,000 inhabitants, compared with 6.2 doctors per 10,000 inhabitants in 2005. This means that there is a serious shortage of doctors in the healthcare service, although demand for the service is extremely high. The number of doctors graduating from medical school is not high, as the national entrance exams for this career are difficult. Moreover, doctors have to work very hard while their salaries are very low, which has resulted in some of them changing career to work for the pharmaceutical companies.

Health and Well-being

The Vietnamese do not worry a great deal about their health, concerning themselves, instead, with everyday living. In 2008 only an estimated 6.4% of expenditure went on healthcare, according to the GSO household living standards survey. With the general rise in living standards, Vietnamese consumers are beginning to pay more attention to healthcare, and their expenditure on healthcare services has increased slightly: 6.4% of expenditure in 2008 was on healthcare 0.8 percentage points higher than in 2002. The Vietnamese tend to buy and use medicines without prescription. As pharmaceutical companies regularly advertise medicines for popular diseases on the mass media, consumers are familiar with medicines and normally self-treat wherever possible.

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City dwellers usually do exercises in the park in the early morning, or at sports and fitness centres, which are open all day. Others go to the beach to swim in the early morning or the afternoon, as Vietnam has beaches the length of the country. There are no official statistics on the leading causes of death in Vietnam. However, according to the WHO, injuries and violence have become a leading cause of death in recent years, with an estimated 25% of deaths caused by injuries in 2007, a significant increase from 2% in 1976. Meanwhile, the WHO Global Burden of Disease Survey estimated that 36% of deaths among 5-29 year-olds were caused by injuries and violence in 2004. The WHO has also stated that traffic accidents are a leading cause of injury deaths, with a rate of 15 per 100,000 inhabitants in 2007, while drowning and suicide are second and third, respectively. The National Traffic Safety Committee has reported that there are more than 35 deaths per day and the mortality rate is more than 15 per 100,000 inhabitants. However, it is said that this number is underestimated, and that the true one must be more than 30 per 100,000. With more than 26.8 million registered vehicles in December 2008, traffic accidents are indeed a nightmare for the Vietnamese. Drowning is considered the second leading cause of injury death and the most dangerous for children under 14 years old. Some 12,500 children drowned in 2001, according to a study by Hanoi School of Public Health. Meanwhile, suicide has been ranked as the third leading cause of injury death, at a rate of 5 per 100,000 inhabitants. Additionally, with very high smoking and drinking rates, smoking- and drinking-related diseases such as lung cancer, heart attacks, cerebral haemorrhages, etc., are considered major causes of death in Vietnam. With increasing incomes, more time-consuming lives and the influence of Western lifestyles, an increasing number of Vietnamese, including children, are eating more fast food and processed food and doing less exercise, resulting in rising obesity levels. Around 0.3% of the population aged 15 and above are obese, increasing from 0.2% in 2005. According to the results of a survey on obesity conducted on 7,600 Vietnamese households in 64 cities and provinces throughout the country by the Institute of Nutrition in 2006, 16.8% adults aged 25-64 were obese, of which two-thirds of overweight and obese people were of 45 years and older, and the obesity rate in urban areas was three times higher than in rural areas. The problem of child obesity has become more serious in Vietnam, especially in urban areas. According to data from Hospital for Children 2 in Ho Chi Minh City, the rate of overweight children aged 6-11 years old in Hanoi was 9.4% and the rate of obese children was 2.8%. In Ho Chi Minh City the Institute of Nutrition gave rates of obesity in children of 2.2%-3.3% for under 5s, 3.9%-6.0% for over 5s, and 3.5% for those in high school. Impact The pharmaceutical industry is immensely profitable: medicines are necessary, while demand for healthcare has been increasing due to higher incomes. Government control of the pharmaceutical industry in general and of medicine prices in particular is deemed ineffective, and the industrys profits are expected to increase over the forecast period.

Sport and Fitness

The younger generations of Vietnamese seem less inclined to do exercise, owing to their lack of free time; older Vietnamese do exercise to maintain and improve their health. Despite this, there are some younger consumers who undertake regular exercise. In beach cities, people usually go to the beach to swim in the early morning and maybe the afternoon. In urban areas, especially in the larger cities, people usually do exercise in the parks or at fitness centres. Older consumers like walking and taijiquan, while younger ones prefer rhythmic gymnastics, aerobics and fitness classes. People have also started to join sports dance and belly dance classes, or practise yoga. The most popular sports among males are football, walking, swimming and fitness, while few enjoy tennis, yoga and dancing. Sitting for long hours at work, for adults, or at school, for students, along with the customary smoking and drinking and increasing time spent in front of a computer have resulted in people becoming sick more easily. As a consequence, consumers awareness of their health has been increasing, especially for urban inhabitants.

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Sport is compulsory for all Vietnamese students from primary school to university. Sports is considered an individual subject in the curriculum. At primary schools pupils have to do regulated sport, while those at secondary school and university may choose a sport to practise, such as swimming, football, dance or kung fu. Impact Higher demand for sports facilities, owing to increasing health awareness, has been met with new sport and fitness centres opening, especially in urban areas. Existing centres such as the Womens Culture House (Nha Van Hoa Phu Nu Tp.HCM) or Californiawow have opened new branches within the cities to attract more people, while small, one-off centres are said to be redundant. Premium sports and fitness services for the highincome sector, in particular, have been identified as potentially profitable, and some outlets and centres that have opened recently target this consumer group, including Branch 2 of Ho Chi Minh Citys Womens Culture House, which opened in district 7 to attract high-income consumers from the Phu My Hung residential area. Some people in urban areas do not like to go to sports and fitness centres, instead preferring to do rhythmic gymnastics and taijiquan in the park. This has created jobs as instructors in these sports.

Nutrition
As incomes increase and consumers have more money to spend on less necessary items, they pay more attention to the quality and type of food they are eating. Vietnam is currently seeing a conflict in the food market, however: while consumers want fresh, healthy food, manufacturers want to make food more desirable by using additives, and allow food to be kept for longer by using chemicals. In recent years there has been a rise in stories in the media about food safety and health, and the Vietnamese are increasingly concerned about this serious problem. However, consumers have little choice but to consume and the problem seems to be out of the Governments control. Impact With health concerns over food, demand for healthy foods has been increasing significantly in recent years, especially for middle- and high-income consumers who are willing to pay higher prices to have healthy meals. This has created an opportunity for premium food shops and companies offering fresh vegetables. At the same time, many people choose to shop in the supermarket for foods that are produced or imported by reliable companies, with full nutritional information and details of provenance displayed. Demand for planting vegetables at home in urban areas has been increasing as a consequence of this desire for organic produce. People with gardens satisfy their demand for fresh, nutritious produce with no chemicals, while also maintaining a green area around their home. However, as yet, few companies provide the seeds and other planting materials necessary for vegetable gardens.

Home Medication and Vitamins

Vietnamese households do not usually have a medicine cupboard, as it is easy to purchase medication as and when needed, without subscription. Pharmaceutical companies advertise medicines for common maladies on TV, so many Vietnamese consumers self-diagnose their ailment and then visit the pharmacy for what they need. Families with children do not necessarily have reliable sources of information, such as books, on childhood illnesses. Equally, parents are not likely to take children to a doctor for prescription medicines, although they might have common analgesics such as Efferalgan in the home to use for minor ailments. The Vietnamese are not big consumers of vitamins, as they know how to get the right vitamins and minerals from healthy eating particularly as Vietnam is an agricultural country. However, sometimes consumers may drink UPSA-C a vitamin C drink when they are feeling tired or in the hopes of preventing the onset of a cold. Impact

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The tendency for self-diagnosis in Vietnam has made demand for over-the-counter (OTC) medicines very high, especially in rural areas. Although the Government introduced the GPP (Good Pharmacy Practices) standard in 2010, few pharmacies meet the requirements. With the cheaper prices of OTC medicines and easier access of pharmacies, health and medication trends in Vietnam are unlikely to significantly alter in coming years. Vietnamese consumers are increasingly aware of their health, however, take more care of themselves, seeking professional advice from doctors and using prescription medicines. These same consumers will favour GPP pharmacies. However, higher prices, limited outlets and their requirement for prescriptions have caused GPP pharmacies difficulties in the market. The Ministry of Health claims that GPP pharmacies may face obstacles in the early stages, but that they will benefit later from opportunities to import special medicines, access to finances for advertising, and the gradual closure of non-GPP pharmacies in the near future.
Table 59 Health Expenditure: 2005-2009

% of total health expenditure 2005 Public health expenditure Private health expenditure
Source: National statistics, Euromonitor International

2006 32.4 67.6

2007 35.2 64.9

2008 37.9 62.1

2009 40.1 59.9

25.7 74.3

Table 60 years

Healthy Life Expectancy at Birth: 2005-2009

2005 Healthy life expectancy at birth Males Females

Source: Note:

2006 62.5 61.4 63.5

2007 62.7 61.8 63.7

2008 63.0 62.2 63.8

2009 63.3 62.6 64.0

Growth 1.2 years 1.7 years 0.6 years

62.1 60.9 63.3

National statistics, Euromonitor International Healthy life expectancy at birth is the average number of years that a person at birth can expect to live in full health by taking into account years lived in less than full health due to disease and/or injury.

Table 61

Obese and Overweight Population: 2005-2009

% of population aged 15+ 2005 Obese population (BMI 30kg/sq m or more) Overweight population (BMI 25-30kg/sq m)
Source:

2006 0.2 6.7

2007 0.3 7.2

2008 0.3 7.6

2009 0.3 8.1

0.2 6.2

OECD, International obesity taskforce, Euromonitor International

Table 62 VND billion

Consumer Expenditure on Health and Wellness (Current Value): 2005-2009

2005 Analgesics Calming and sleeping Cough, cold and allergy (hay fever) remedies Vitamins and dietary supplements
Source: National statistics, Euromonitor International

2006 469 88 425 716

2007 516 93 453 782

2008 564 98 478 838

2009 620 103 508 903

428 83 399 658

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Table 63 VND billion

Consumer Expenditure on Health and Wellness (Constant 2009 Value): 2005-2009

2005 Analgesics Calming and sleeping Cough, cold and allergy (hay fever) remedies Vitamins and dietary supplements
Source: Notes:

2006 663 124 601 1,011

2007 670 121 587 1,015

2008 598 104 507 888

2009 620 103 508 903

% Growth -4.5 -17.8 -16.0 -9.6

649 126 605 999

National statistics, Euromonitor International Constant value at 2009 prices

LEISURE AND RECREATION

Staying in
Most Vietnamese stay at home in the evening and at the weekend after work or studies, doing the common activities for free time. For most Vietnamese women, cooking is both their leisure time activity and their household chore, and only when the whole family have had dinner and the dishes are washed do they spend their leisure time watching TV or a movie, or listening to music. Vietnamese men, after work and having drinks or eating out with friends, come home late in the evening, when they may join their family for dinner. After that, some watch TV or a movie, some go on the internet and some read. Children, after finishing their homework, might watch TV with their parents, play games on the computer, listen to music or read. However, fewer children are reading books nowadays, perhaps owing to their heavy studies. Impact Seemingly all Vietnamese watch TV during their free time. Almost all Vietnamese families have a TV set, with some even having more than one, and cable TV has been in high demand in recent years, especially in the larger cities. For Vietnamese households, cable TV is no longer a luxury service for hotels and resorts; with its cheap service price, cable TV is increasingly affordable for Vietnamese households. Listening to music is one of the most popular leisure time activities for the Vietnamese, especially the younger generation. Demand for audio and video products in Vietnam is very high, but producers are facing the serious problem of piracy, leaving some on the verge of bankruptcy. The Governments attempts to curtail pirated audio/visual goods have as yet come to nothing.

Going Out
People in urban areas go out more regularly than those in rural areas, for the simple reason that there are more places to go in towns and cities. In big cities, consumers go shopping, to the theatre, to clubs and discos, bars, pubs and restaurants during their free time, while those living in rural areas go to coffee shops, snack bars or pubs. During harder economic times, shoppers have started to adjust their shopping habit with respect to their income, and more people are window shopping rather than buying. The demand for dramatic plays in the big cities has been satisfied by more theatres opening, which has attracted new audiences to the theatres that were under threat of closure for many years.

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The Vietnamese in urban areas have also started to go to cinemas again, particularly in the evening and at weekends. This is owing to investors heavily investing in good cinemas such as Galaxy and Lotte, which are well equipped and show the most popular and latest international films. Coffee shops, pubs and restaurants are the most popular places for Vietnamese to go out, and they are always crowded. Traditionally, pubs were only for men, but changes in the Vietnamese lifestyle have opened pubs to women too. The image of a woman drinking beer, wine or spirits has now become relatively familiar to most Vietnamese, even in rural areas. Impact Despite the new theatres, the countrys increasing demand for dramatic plays has not yet been fully met, and the small number of theatres have a limited number of actors. This market is said to offer many opportunities for investors. Well-equipped and comfortable cinemas are currently located in the big cities, but those in other cities and provinces are still backward. However, demand for cinemas in all locations is increasing, with cinemas showing the latest films. Consumers are hoping that the increasing demand for movies will result in investment in cinema complexes in the smaller cities and provinces. Coffee shops and pubs are always excellent business opportunities in Vietnam, and the number of Vietnamese drinking coffee and spirits is expected to grow even further in the forecast period, indeed a profitable market.

Public Holidays, Celebrations and Gift-giving Occasions

The Vietnamese enjoy public holidays on 1 January (New Year), 30 December to 3 January (Traditional Lunar New Year), 10 March (King Hungs Anniversary), 30 April (Reunification Day), 1 May (International Labour Day) and 2 September (National Day). Traditionally, the Vietnamese give presents on special occasions such as birthdays, wedding days, on International Womens Day and Teachers Day, and give items such as money or flowers for ceremonies, new homes, and funerals and anniversaries of deaths. In recent years, influenced by the culture of other countries, some Vietnamese especially the young have started to give gifts on St Valentines Day, Mothers Day and Fathers Day. On public holidays some people may travel with their friends or family, on domestic trips or tours, depending on the length of the holiday and their income. Others choose to stay at home and relax, or invite friends round for a meal. The current trend for travel has come about as a consequence of higher incomes and attractive promotions from tour operators. Flowers are given on International Womens Day, Teachers Day, St Valentines Day and for festivals, while gifts are given for birthdays, Mothers Day, Fathers Day, Christmas Day, and to celebrate a new home. In the past gifts were given to couples on their wedding day, but the more practical and convenient gift of money and gold tends to be given nowadays. More traditional Vietnamese send greetings cards, but the younger generation seldom send cards with their gifts. On special occasions, young Vietnamese may send an e-card by email, acknowledged to be faster and easier; however, a large number of people still prefer to send a greetings card for birthdays, wedding anniversaries and graduations. These are bought usually from book stores.

Culture
More Vietnamese are travelling to cultural sites in Vietnam, owing to the increase in their income. With settlement in the country for over 4,000 years, Vietnam has hundreds of cultural sites throughout the country, while Ho Chi Minh City, Hanoi, Hue and Ha Long Bay are top destinations for tourism. The Vietnamese rarely go to museums, though, except students as required by their curriculum. Museums tend to be considered as sources of information for foreign tourists. Some Vietnamese do visit exhibitions of famous collections, however, for example that in Thang Long imperial citadel.

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The Vietnamese prefer live music shows, exhibitions and plays rather than concerts, and in recent years numerous singers have organised live shows in Vietnam, including My Tam, Dam Vinh Hung, Quang Dung and My Linh. Exhibitions on important holidays such as Flower Nguyen Hue Street and Tao Dan Flower Exhibition in the Lunar New Year also attract many visitors.

Holidays
Increasing incomes combined with promotions by tour operators have resulted in an increasing number of Vietnamese taking package holiday with friends and families. In 2009 there were some 25 million domestic trips, an increase of 19% on 2008, according to Vietnam National Tourism Administration. Consumer expenditure on package holidays in 2009 reached VND557.2 billion, increasing 13.7% from 2008 and 133.4% from 2005. The role of the travel and tourism industry is increasingly important to Vietnam and is showing remarkable development. Currently, Vietnams travel and tourism industry is ranked fifth among the ASEAN countries, and the industrys turnover reached VND70,000 billion in 2009, increasing from VND1,350 billion in 1990 and contributing around 4% of the countrys GDP, according to the Vietnam National Tourism Administration. The proportion of holidaymakers in urban areas is higher than in rural areas, owing to higher incomes. Package holidays are increasing in frequency owing to attractive promotion campaigns by tour operators throughout the year. Beach cities such as Vung Tau, Phan Thiet and Nha Trang are favourites in the warm weather, especially in the summer. The length of trips depends heavily on the occurrence of public holidays and the weekend. As public holidays in Vietnam are usually short, Vietnamese holidaymakers have to take short trips, averaging around 3-4 days. Vietnam is considered a safe and attractive tourist destination for international arrivals, and in 2009 the country attracted 3.8 million international arrivals, decreasing 11% from 2008 due to the financial crisis and the influenza A/H1N1, but increasing from 250,000 international arrivals in 1990. Low-cost carriers have factored in the recent increase in international arrivals, as well as creating more opportunities for Vietnamese travelling abroad. In the past, travelling by air was a luxury, but it has now become more normal with the combination of higher incomes and lower air fares. Although the number of Vietnamese travelling abroad has decreased with the tough economic times and resulting higher prices for service in foreign countries, the trend for Vietnamese going abroad for leisure has significantly increased over the review period. There are no data on the number of outbound tourists, however, although they are estimated to be much lower than international arrivals. The favoured destinations for the Vietnamese are Singapore, Thailand, Hong Kong, China, Malaysia and Cambodia. Previous to 2009, international arrivals and domestic tourists kept the occupancy rate of tourist accommodation in Vietnam always high, with the most popular tourist destinations at more than 90% and the lesser ones at around 60%-70%. However, the fall in international arrivals in 2009 meant that the occupancy rate that year was at a maximum of 80% in the big cities and 50% elsewhere. Impact The travel and tourism market in Vietnam has not yet been fully explored. Currently, tour operators focus on international arrivals and ignore domestic and outbound tourists, but with a high population and improving income level, demand for domestic and international travel has much potential. As domestic demand for tourism was, as a rule, ignored for many years, tour operators were perplexed by a sudden increase in domestic tourists in 2009, and were ill prepared with products and services to meet adequately the demand. There are, thus, opportunities for tour operators to improve and explore domestic travel and tourism.
Table 64 % of households Household Possession of Cable TV and Satellite TV: 2005-2009

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2005 Cable TV Satellite TV system

Source: National statistics, Euromonitor International

2006 0.5 0.8

2007 0.5 0.9

2008 0.6 1.1

2009 0.6 1.2

0.4 0.6

Table 65 % of households

Household Possession of Cable TV and Satellite TV: 2010-2020

2010 Cable TV Satellite TV system

Source: National statistics, Euromonitor International

2015 1.0 1.7

2020 1.2 1.9

0.7 1.3

Table 66 VND million

Consumer Expenditure on Package Holidays (Current Value): 2005-2009

2005 Package holidays

Source:

2006 285,560

2007 351,199

2008 489,915

2009 557,237

238,716

National statistical offices, OECD, Eurostat, Euromonitor International

Table 67 VND million

Consumer Expenditure on Package Holidays (Constant 2009 Value): 2005-2009

2005 Package holidays

Source: Notes:

2006 407,193

2007 460,012

2008 524,228

2009 557,237

% Growth 52.4

365,576

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

Table 68 VND million

Consumer Expenditure on Package Holidays (Constant 2009 Value): 2010-2020

2010 Package holidays

Source: Notes:

2015 597,338

2020 720,405

% Growth 34.0

% CAGR 3.0

537,767

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

CONSUMER TECHNOLOGY
In-home Technology
An estimated 2.0% of Vietnamese households have a broadband-enabled computer, representing a significant increase from the 0.1% of households in 2005. The rapid uptake is partly as a consequence of the ease and low price of connection. According to the Ministry of Information and Communication, there were 22.8 million internet users in Vietnam in 2009, accounting for 26.6% of the total population, and an increase of 112.7% on 2005. For number of internet users, Vietnam has been ranked seventh highest among the countries with high internet use in Asia, by Internet World Stats. In-home technology use has increased significantly during the review period, as Vietnamese with higher incomes want to feel more comfortable with new technology in their homes, for relaxation and enjoyment, and

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for access to information from around the world. Thus the increasing use of computers, wi-fi routers and printers, among numerous other devices, has increased rapidly, especially in urban areas. It is very easy for Vietnamese households to get internet access, and few use a dial-up service any more, having turned to ADSL instead. Currently, there are several broadband internet ADSL providers in Vietnam, including VNPT, Viettel, FPT and SaigonPostel. These service providers have encouraged more people to use the internet by offering attractive promotions such as a free modem. Impact Easy internet connection and broader coverage has made online services in some industries much easier and more convenient. An increasing number of banks offer online banking to their customers, with account balance, money transfer and online payment of utility bills. The increasing proportion of households with a broadband-enabled computer shows the potential demand for online retail. The majority of those buying online are well-educated, and they tend to buy products such as books and technology from Amazon.com or eBay. With a sharp increase in internet use, and further increases forecast, Vietnam is a promising potential market for online retail.

Portable Technology
The growth rate of mobile phone users increased significantly in Vietnam during the review period. According to the Ministry of Information and Communication, there were 135.3 million telephone users as of January 2010, an increase of 62.3% on the previous year. Of these, some 115.7 million were mobile phone users, an increase of 68.0% on 2009, and six times higher than the 19.6 million landline telephone users. The share of Vietnamese households having a mobile phone reached 27.5% in 2009, significantly increasing from 7.5% in 2005. The Vietnamese mobile phone providers are Vinaphone, Mobifone, Viettel, Sfone, Beeline and Vietnammobile, of which Mobifone, Vinaphone and Viettel are the biggest. Owing to their economies of scale, these three providers are the market leaders in terms of setting service prices, offering attractive promotions, and thus bringing the mobile service tariffs down. It is now cheaper to set up a new mobile subscription than to use an existing number, owing to the competitive offers available, which has contributed to the enormous increase in users. The Ministry of Information and Communication has had to introduce a maximum of three mobile phone numbers per person, and the obligatory registration of personal details to service providers, in order to limit this trend for multiple phone use. In contrast with the sharp increase in the number of mobile phone users, the number of landline telephones has remained unchanged, or even declined in some areas. This is owing to the convenience and low cost of mobiles, and in Hanoi an estimated 60,000 landline telephones are turned off each year. Impact Ease of set-up and cheap prices mean that demand for mobile phones increased sharply during the review period. The growth rate of mobile services slowed during the economic downturn, but nevertheless increased by 20% on 2008 to reach 12 million mobile devices bought in 2009. Of these, low-cost handsets (valued at below VND2 million) accounted for 60% of market share, mid-range (valued at VND5 million-VND10 million) accounted for 8% of the market but contributed 25% of turnover, and the premium range (valued at more than VND10 million) accounted for 1% of the market but 10% of turnover. Suitable for those with an average-to-low income, cheap handsets are in high demand, especially in rural areas and for students. Cheap handsets are an important market segmentation for manufacturers and providers, and so in addition to brands such as Nokia and Samsung, domestic brands have been successfully marketed during the review period, such as Q-Mobile, F-Mobile and MobiStar. For the Vietnamese, mobile phones are no longer just a communications device, but also a fashion statement and status symbol, and a small number of Vietnamese consumers are willing to pay for expensive handsets. Thus Vietnam has increasing potential as a market for smart phones, which currently account for around 7% of the market, although they contribute 25% of turnover.

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E-commerce and M-commerce

Computers and internet use are becoming more widespread, with a survey conducted by the Ministry of Industry and Trade in 2008 on 1,600 companies showing that 100% were equipped with computers, 99% of which were connected to the internet, while 88% of these companies had an intranet and 45% of them had a company website. However, e-commerce in Vietnam is still in the early stages of development. Although the number of companies applying e-commerce has increased, this retail format is deemed to have one major obstacle: Vietnamese consumers long-standing shopping habits. According to the Ministry of Industry and Trade, the number of people seeking information on products and manufacturers online is high, and the number of people accessing online retailers has increased sharply, but most Vietnamese consumers still only use these websites for reference and comparison, rather than actually purchasing online. Both Vietnamese consumers and retailers still favour payment in cash rather than payment online, and only 35% of e-commerce companies allow online payment at present. Delivery services are also seen as a disadvantage of online retail at present, with 55.4% of online retailers having dedicated delivery teams, 49.9% asking consumers to be at home to receive products and 12.8% delivering products by post. Consumers also worry about after-sales service from online retailers. Impact Although the development of e-commerce in Vietnam faces some obstacles, there is a section of consumers buying online. There is a perceived high demand for online shopping, and e-commerce is expected to develop rapidly, especially with the imminent government support promised by the Prime Minister.
Table 69 Household Possession of Broadband Internet-Enabled Computers, DVD Players and Video Game Consoles: 2005-2009

% of households 2005 Broadband internet -enabled computer CD player DVD player/recorder Video game console
Source: National statistics, Euromonitor International

2006 0.2 1.5 3.0 0.1

2007 0.5 1.5 3.9 0.1

2008 1.1 1.4 4.9 0.1

2009 2.0 1.5 5.9 0.1

0.1 1.4 2.1 0.1

Table 70

Household Possession of Broadband Internet-Enabled Computers, DVD Players and Video Game Consoles: 2010-2020

% of households 2010 Broadband internet-enabled computer CD player DVD player/recorder Video game console
Source: National statistics, Euromonitor International

2015 8.9 1.4 11.6 0.2

2020 14.6 16.0 -

3.2 1.5 6.8 0.2

Table 71 As stated

Household Possession of Mobile Telephones: 2005-2009

2005 Mobile telephone (% of households)

Source: National statistics, Euromonitor International

2006 12.0

2007 17.3

2008 22.4

2009 27.5

7.5

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Table 72 As stated

Household Possession of Mobile Telephones: 2010-2020

2010 Mobile telephone (% of households)

Source: National statistics, Euromonitor International

2015 48.9

2020 56.5

32.2

TRANSPORT
Getting Around
The Vietnamese automobile market is undergoing an odd trend: the price of cars sold in the country is one of the highest in the world, and yet Vietnam is one of the poorest countries. This is mainly a consequence of the Governments protection of the emerging automobile industry. However, a small number of those on high incomes have shown themselves willing to pay the high price of buying a car, especially since 2007 when the stock market and real estate booms left some Vietnamese much wealthier. As a result, there were 1.6 million registered cars in Vietnam as of June 2010, an increase of 6.3% from the previous year, according to the Department of Land Transportation Police. With a population of more than 86 million people, the number of cars is indeed tiny, with a rate of eight cars per 1,000 inhabitants low in comparison with the 24 cars per 1,000 inhabitants in China, 152 cars per 1,000 inhabitants in Thailand, 228 cars per 1,000 inhabitants in South Korea, and 682 cars per 1,000 inhabitants in the USA. Around 1.1% of the Vietnamese population had a car in 2009, an increase of only 0.1 percentage point on 2005. As previously mentioned, the car is not the main means of transportation for the Vietnamese, who mainly use motorbikes. There were some 30 million registered motorbikes in June 2010, an increase of 5.1% on the previous year. Motorbikes are a more appropriate option on the average income, and with the crowded population in the cities and narrow roads. Where motorbikes are unsuitable, such as for long journeys, coaches are the main mode of transport and coach stations are always crowded. Buses and taxis are mainly used in urban areas rather than rural ones. Vietnamese consumers spent VND50.8 trillion on buses, coaches and taxis in 2009, increasing by 121.4% on 2005 and accounting for 70.6% of total consumer expenditure on transport services. The Vietnamese railway is considered out of date, although it is safe and affordable for the majority of Vietnamese consumers. Despite the Government allowing the private sector to invest in and improve the existing railway, the GSO has found the number of rail passengers to have fallen, from 12.8 million passengers in 2005 to 11.0 million in 2009; however, expenditure on rail travel has more than doubled, from VND4.1 trillion in 2005 to VND9.0 trillion in 2009. The establishment of low-cost airlines, combined with the Governments gradual removal of Vietnam Airlines monopoly, have brought the price of air travel down to a more affordable level, consequently increasing the number of passengers travelling by air. There were 10.7 million passengers travelling by air in 2009, an increase of 64.6% on 2005 and 282.1% on 2000. This growth rate was the highest among modes of transport. In value terms, consumer expenditure on air travel in 2009 was VND9.6 trillion, increasing 129.4% on 2005. Public transport in Vietnam is underdeveloped and inefficient, offering only buses. Although the Government has provided subsidies to improve the public transport system, little has changed and only those on the lowest incomes choose to travel by bus, owing to the low cost. The Vietnamese seldom cycle or walk, riding their motorbikes even for a short distance. Motorcycles are gradually disappearing in Vietnam, however, especially in the larger cities, with only lower-income consumers and students riding them. An increasing number of Vietnamese are using electric bikes, however, which come from China.

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Vehicle owners, including car owners, do not have to pay road tax at present. However, the Government is drafting a plan to include a road tax in the price of gasoline in the near future. The Government was previously responsible for the building and upkeep of the road system, but with a limited budget it is now allowing private-sector investment in the improvement of the infrastructure, either in a build, operate, transfer (BOT) or build, transfer (BT) contract. As a result, Vietnamese travellers are becoming increasingly familiar with toll roads. Impact Motorbikes are not seen merely as a means of transport, but also as a fashion or status symbol. Consumers are, as a consequence, changing their motorbikes more regularly than in the past, increasing demand in the market. In addition to existing manufacturers such as Honda Vietnam, Yamaha, Suzuki and SYM, Piaggio and imported motorbikes from China, Thailand and South Korea have been introduced into the market. There has been a strong trend for scooters in the review period. The growth in car sales has continued despite the economic downturn, with the number of premium cars being imported increasing at a surprising rate, making Vietnam a profitable market for this kind of car.

Air Travel
The state-owned Vietnam Airlines is the biggest airline in Vietnam, and was previously a monopoly. With the opening up of the economy, the airline industry welcomed Pacific Airlines and VASCO. Pacific Airlines has more recently changed its format from scheduled airline to low-cost carrier, also changing its name to Jetstar. The Vietnamese airline industry has become more competitive since the Government allowed the private sector in, and domestic airlines now include Indochina, Mekong Air and Vietjet Air, with foreign low-cost carriers such as Tiger Airways, AirAsia and Cebu Pacific adding to consumer choice. Vietnams main airports are Tan Son Nhat International Airport in Ho Chi Minh City and Noi Bai International Airport in Hanoi. There are also some small airports in provinces and cities, such as Da Nang Airport and Lien Khuong Airport. The food courts and shopping areas in the international airports are said to be much smaller than the airports in other ASEAN countries, such as Thailand, Malaysia and Singapore; however, the facilities offered at these airports were greatly improved during the review period. The greatest number of arrivals to Vietnam were from China, the USA, South Korea, Japan and Taiwan in 2009, according to the Vietnam National Tourism Administration. For most Vietnamese, travelling by sea is a luxury and unaffordable, so the majority now travel by air to go abroad, or by land if visiting China, Cambodia or Laos. Impact Cheaper flights from both scheduled and low-cost airlines have resulted in a massive increase in demand for both long- and short-haul flights by Vietnamese consumers. As the quickest and most convenient mode of transport, demand for air travel is expected to increase in the forecast period. Simultaneously, the move by the Government to open more airspace to private airlines has resulted in more competition in air travel, and has opened opportunities for potential players in the airline business.
Table 73 % of households 2005 Passenger car
Source: National statistics, Euromonitor International

Household Possession of Passenger Vehicles: 2005-2009

2006 1.0

2007 1.0

2008 1.1

2009 1.1

1.0

Table 74

Household Possession of Passenger Vehicles: 2010-2020

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% of householders 2010 Passenger car

Source: National statistics, Euromonitor International

2015 1.3

2020 1.4

1.2

Table 75 VND billion

Consumer Expenditure on Transport Services (Current Value): 2005-2009

2005 Transport Services Rail Travel Buses, Coaches and Taxis Air Travel Other Travel
Source:

2006 38,463 4,796 27,402 4,853 1,412

2007 46,373 5,770 32,961 5,972 1,669

2008 63,031 7,862 44,616 8,285 2,268

2009 71,933 8,965 50,795 9,572 2,601

32,456 4,089 22,944 4,173 1,250

National statistical offices, OECD, Eurostat, Euromonitor International

Table 76 VND billion

Consumer Expenditure on Transport Services (Constant 2009 Value): 2005-2009

2005 Transport Services Rail Travel Buses, Coaches and Taxis Air Travel Other Travel
Source: Notes:

2006 54,846 6,839 39,074 6,919 2,014

2007 60,740 7,558 43,174 7,822 2,186

2008 67,446 8,412 47,741 8,865 2,427

2009 71,933 8,965 50,795 9,572 2,601

% Growth 44.7 43.2 44.6 49.8 35.8

49,704 6,262 35,136 6,391 1,915

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

Table 77 VND billion

Consumer Expenditure on Transport Services (Constant 2009 Value): 2010-2020

2010 Transport Services Rail Travel Buses, Coaches and Taxis Air Travel Other Travel
Source: Notes:

2015 115,160 14,234 81,130 15,341 4,456

2020 165,656 20,629 115,883 22,361 6,783

% Growth 114.8 115.7 113.1 116.4 139.5

% CAGR 7.9 8.0 7.9 8.0 9.1

77,111 9,564 54,383 10,332 2,832

National statistical offices, OECD, Eurostat, Euromonitor International Constant value at 2009 prices

MONEY
Savings
Being a low-income country, the Vietnamese tend to save at least part of their money; however, the proportion of savings of total incomes is small in comparison with other countries, as living costs are high. Annual savings of around VND780,000 are the norm, with an estimated savings rate of 5.8% of disposable income in 2009, having fallen from 6.4% in 2005. In the past, the Vietnamese kept their savings at home in the form of gold or paper money, but better understanding of interest rates has moved consumers to use banks. In recent years, due to high inflation, the

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Government set a ceiling for interest rates, which meant that the official rate of interest was much lower in real terms. However, the Vietnamese now have more investment channels available to them, such as stocks, gold, or even real estate, and banks that do not offer an attractive rate of interest are likely to see savings fall. Domestic savings are one of the most important sources for future investment, but low savings mean low investment, with no means of improvement in the short term. To date, there has been no move by the Government to encourage savings. Impact The low savings rate suggests that the best part of disposable income is spent on essential goods and services. Meanwhile, the fall in the savings rate shows that depositing money in a bank is no longer considered the best way of saving, and consumers are investigating other channels such as gold and foreign currencies. The price of gold in recent years has risen sharply, increasing demand for gold and gold products as a result.

Loans and Mortgages

Mortgages are not very popular in Vietnam, and most people with mortgages do so for the sake of business investment, rather than for a real estate purchase. Vietnamese who wish to buy a house but do not have enough money usually borrow from their parents, relatives or friends rather than from the bank. This is mainly owing to a fear of banks, especially in rural areas. However, times are changing and in urban areas, in particular, where the real estate market has heated up, people buying a home or an investment property find it even harder to afford, so they are turning to banks for a mortgage. Loans of a maximum 70% of the value of the purchase are offered. The mortgage industry increased sharply in 2007, but the subsequent financial crisis prompted the State Bank of Vietnam and the commercial banks to take more care with mortgage schemes, and the industry cooled towards the end of the review period, especially with the freeze in the real estate market brought about by government regulations. The Vietnamese do not make a habit of spending more than they earn, but for a necessary large purchase, such as a car, motorcycle or to study overseas, they might approach a bank for a loan. They rarely take out loans for buying consumer products such as washing machines and refrigerators, however. Those wanting a mortgage or loan usually go to a popular commercial bank, including Vietnam Foreign Trade Bank (Vietcombank), Vietnam Import-Export Bank (Eximbank) or Asia Commercial Bank (ACB). Many more banks opened during the review period, offering opportunities for consumers who want mortgages or loans, with attractive products. Impact Demand for mortgages and loans in Vietnam has been increasing, as a result of the countrys economic development, especially with the rise in consumer choice; meanwhile more diverse investment channels have seen this trend also improve in numbers. The banking industry in Vietnam has benefitted as a result. The development of the banking industry has given mortgages a healthy boost, as all banks are trying to encourage consumers to take out mortgages or loans by launching attractive products and making the application procedure simpler. Although there are no official data on the number of Vietnamese who have a mortgage or loan, the number is certainly increasing rapidly and is expected to continue in that trend over the forecast period. However, the underdevelopment of the Vietnamese banking system combined with the rapid growth of the mortgage industry does introduce potential risk for the country.

Credit
Over the review period, the number of Vietnamese using credit and debit cards increased, from 1.5 million debit cards in 2005 to 15.4 million in 2009, and 125,000 credit cards in 2005 to 2.1 million in 2009. Card use, although not traditionally popular, is becoming more familiar and the concept of an ATM, credit or debit card is no longer considered a novelty. This is partly because more companies and organisations pay salaries via bank accounts, which consumers then access with ATM cards. Meanwhile, increasing demand for international transactions as a result of a rise in foreign travel has impacted demand for credit and debit cards.

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The most popular and fastest growing card is the ATM card and at the time of writing more than 22 million ATM cards had been issued. ATM card users withdraw money to pay for goods, rather than have a debit card to make payments, principally owing to the long-standing habit of paying for purchases with cash. Only a small number of consumers use a credit or debit card, and although all banks are now encouraging card use, the Vietnamese appear indifferent to the technology. One reason is because they need to keep a significant amount of money deposited in their bank account in order to use a payment card; equally, credit card users have to pay high interest rates. As yet, the card infrastructure is limited and unreliable, as payment cards are still uncommon. Card users frequently experience difficulties, as the banks systems in Vietnam are not linked together, which means that consumers must find their own banks machine to withdraw cash. Meanwhile, the number of ATMs and points of sale allowing card payment are limited: there were only 10,000 ATM machines and 36,000 possible card payment points in stores throughout the country at the time of writing. ATM machines are also regularly down, which causes difficulties for users wishing to withdraw cash to make purchases. Additionally, stores and other retailers allowing card payment often require card users to pay an additional fee of 3%-5% of the transaction value, to offset the cost to the retailer of the payment mechanism. Impact Most premium shopping centres and shops accept and encourage payment cards without asking for any additional fee. This is because they know their consumers have high incomes, are comfortable using cards and will thus return to the store. These card users find it convenient when shopping for clothes, shoes, accessories and electronics. Vietnam has massive potential for payment card use, owing to the current low rate of card users and the Governments encouragement of payment card use. To increase the number of card users, the banks are trying to persuade consumers that cards are not only for the wealthy or for those who travel abroad regularly, but for everyone on a daily basis. Both the banks and the Government are trying to change the traditional cash society by encouragement of payment by card. These habits may begin to change during the forecast period, creating numerous opportunities for banks and card companies.
Table 78 As stated 2005 Annual savings (VND per capita) Savings ratio (% of disposable income)
Source:

Savings and Savings Ratio: 2005-2009

2006 435,003.0 5.7

2007 516,867.3 5.8

2008 673,460.6 5.7

2009 780,394.1 5.8

430,621.1 6.4

National statistics, Euromonitor International

Table 79 VND billion

Consumer Loans, Mortgages and Credit (Current Value): 2005-2009

2005 Consumer Lending Mortgages/Housing Consumer Credit

Source: National statistics, Euromonitor International

2006 1,522 850 672

2007 2,179 1,121 1,058

2008 3,051 1,458 1,593

2009 3,811 1,793 2,018

1,016 700 316

Table 80 VND billion

Consumer Loans, Mortgages and Credit (Constant 2009 Value): 2005-2009

2005

2006

2007

2008

2009

% Growth

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Consumer Lending Mortgages/Housing Consumer Credit

Source: Notes:

1,677 1,155 522

2,339 1,306 1,032

3,075 1,582 1,493

3,501 1,673 1,828

3,811 1,793 2,018

127.2 55.2 286.6

National statistics, Euromonitor International Constant value at 2009 prices

Table 81 '000 cards

Financial Cards in Circulation: 2005-2009

2005 Debit Function Credit Function

Source:

2006 2,700 500

2007 8,300 840

2008 11,869 1,531

2009 15,430 2,067

% Growth 928.6 1,553.5

1,500 125

National statistics, Euromonitor International

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