Vietnam Section 107, the material on this site is distributed without profit. [Source: By Tran Dinh Thanh Lam, Inter Press Service, April 10, 2002 ++], "Economists warned that Vietnam country appears to be reaching relatively high inequality rates much more quickly than China. WebRICH, POOR AND MIDDLE CLASS IN VIETNAM DISPARITY OF INCOME IN VIETNAM Vietnam remains a poor country, with most people earning about $1,500 a year, but it has made tremendous strides since opening its doors up to capitalism in the mid-1980s. For example, middle-class consumers may upgrade their refrigerator from a basic two-door model to one with four doors and an icemaker. As of a 2016 report from the General Statistics Office of Vietnam (GSO), median wages sit just below 6 million VND a month. Data and research help us understand these challenges and set priorities, share knowledge of what works, and measure progress. They have access to health care. No matter their starting point, BCG can help. Market Report: VietnamOne of BMI's favourite recruitment markets due to its consistent, steady growth and strong economic forecasts. All of my international travels have to have a shopping component to them, said Jen, 27, a Singaporean marketing manager. While the World Bank has praised Vietnam for poverty reduction it has also stressed that "the poverty rate among ethnic minorities and communities in mountainous areas is much higher compared to the national average," standing at 60 percent in 2004 for these groups. Vietnams economic growth over the past two decades has been steady and impressive, averaging 5.5% since 1990 and nearly 8% annually through the 1990s. One of the ten children of a peasant, he formed a joint venture with a Hong King investment firm in 1990 which grew into a $20 million conglomerate by the late 1990s controlling distribution of John Deere farm equipment, Mercedes and Honda cars, and Johnson and Johnson baby products. However, households in Southeast Asian countries often significantly underreport their incomes. To encourage people to pay more attention to children, the Vietnam Committee for Child Care and Protection is organizing programs to prepare for National Family Day on June 28 which will be celebrated every year. The World Bank assigns the worlds economies [1] to four income groupslow, lower-middle, upper-middle, and high income. For companies that already consider Southeast Asia to be a major market, the best growth opportunities will be in mass prestige (or masstige) products, which convey luxury but are priced more affordably. The government may still be communist but a growing middle class is hungry for everything from Western fashion to beauty products and plasma TVs, say market watchers now rating the emerging economy as a goldmine. On the other side are street people selling postcards and peasants eking out leave on small parcels of land. More effective social assistance should be provided to poorer households, with increased coverage and benefit levels to achieve greater poverty and inequality reduction. Two cars eluded officers; four others were nabbed. The population that is no longer poor, but also not economically secure or middle class, is about 13.6 million. An ever-faster lifestyle is also reflected in the rise of new consumer goods, with instant coffee and tea bags growing by over 30 percent last year and slowly replacing the traditional drip coffee and slowly brewed tea. Relishing Immersive Experiences. One of her friends has 50 Louis Vuitton bags, Van said. ////, "It was Cuong who tried to give us $400,'' said Thuyet, whose $140 monthly salary is the highest in his department. faces of the Vietnamese consumer In contrast, in the remote regions - central and northern highlands, Mekong and Red River deltas - official efforts are geared more toward developing off-farm activities and convincing people to adopt hygienic practices." Specifically, these consumers are embracing premiumization, searching for quality and value, seeking exclusivity, relishing immersive experiences, using digital media, and traveling frequently. This is a major change for Vietnam: in 2000 less than 10% of the population spent more than 11 USD per day whereas today, this number reaches 40% and is expected to reach 75% by 2030. Reuters reported: "Children selling newspapers, postcards or chewing gum, shining shoes, and begging are common sights in Hanoi and Ho Chi Minh City. However, considering peoples awareness, 96 percent of Vietnamese think their incomes are high enough to be among the middle class. ::: "In contrast, more than 70 percent of the 83 million Vietnamese live in the countryside and work in agriculture, in some places still struggling to make one dollar a day. For some basic products, such as toothpaste, shampoo, and instant noodles, spending by Southeast Asian households remains very stable as incomes rise. Over this period, the number of affluent people in those four nations alone is projected to grow from 46 million to 125 million, and their share of the population is projected to more than double, to 21%. "In light of the regional crisis, the impact of the economic slowdown on marginalised groups such as these will be felt even more strongly,'' the statement said. The distinction is important because the young upper middle class represents the most promising part of the segment. The World Bank Group works in every major area of development. According to these experts, while the growth has benefitted rich and poor alike, those who were well off to begin with ended up with more gains. Newly affluent consumers are significantly affected by famous fashion bloggers and public social media, but those who are more experienced pay more attention to trusted online circles and tend to purchase through private channels, such as a closed adidas group on Facebook or private WhatsApp groups. Updated country income classifications are available here. "Maybe in 2020", Mr Vong says. The Camry and the Lexus, which two of the boys "borrowed'' from their parents' car repair shops, were returned to their owners. Moreover, many of Southeast Asias rapidly developing economies are maturing into middle-income economies, while others are on track to become developed economies. The World Bank assigns the worlds economies [1] to four income groupslow, lower-middle, upper-middle, and high income. The right mix of fiscal policy can help finance the investments needed for the country and its workers to become more productive and higher earners, such as modernization of agriculture, improved skills and higher-quality education, a more robust digital backbone, and accompanying services. Global retail outlets should cater to these consumers by having staff that speak their native languages and ensuring that purchases can be made through their local payment platforms. "Individualism is destroying our cultural identity. On the migration of the poor to the cities, The BBC reported: "For poorer people, the recent economic changes mean rapid urbanisation and large-scale migration from the countryside to the cities. In the alcove near the front door, in place of Ans desk and filing cabinets and the piles of magazines and papers, which used to reach toward the ceiling, sits his sons piano. Now we must launch a war against poverty.". They indulge their urge to splurge at Dolce and Gabbana, Burberry, Escada, Rolex, Clarins, Shiseido and the like. For many of Southeast Asias mass affluent, an immersive experience can be as important as the product itself. At that time people slept on the zoo grounds. Herms, for example, tightly limits access to VIP events, and the product selection depends on customers status with the brand. Van's indulgences are modest compared to those of Vietnam's super elite, who tool around in the ultimate status symbols: a shiny BMW or Mercedes-Benz. The houses on both banks are newly-built. We face big challenges to help the worlds poorest people and ensure that everyone sees benefits from economic growth. When we asked affluent consumers what makes a brand premium to them, I identify with the product and its story was one of the top responses. In the analysis process, these six social classes are grouped into three social strata: the upper stratum (including upper and upper-middle classes), the middle stratum (consisting of the middle and lower-middle classes), and lower stratum (comprising of the upper-lower and lower classes). Economic growth averaged 9 percent a year in the five years to 1997, the year of the Asian economic crisis. Economic policies to sustain growth must be complemented by strategies to protect households from falling back into poverty. middle class In 2020, about 23 percent of ethnic minorities were working in manufacturing, nearly the same rate as the Kinh majority at the start of the decade. In the meantime, there were only nine provinces with inequality narrowed slightly over this period. [Source: Hoang Uy, Tuoi Tre, September 18, 2007], Reporting from Ho Chi Minh City, Ben Stocking wrote in the Mercury News, "Wealthy young rebels without a cause, they ran wild in the streets, racing $50,000 luxury cars down the boulevards of old Saigon. RICH, POOR AND MIDDLE CLASS IN VIETNAM In many respects, James fits the profile of what we call the mass affluenta market of affluent consumers in Southeast Asia that represents one of the worlds largest growth opportunities for consumer product companies. Because the region is highly diversified and covers a wide area, Southeast Asias affluent population may appear to be a collection of niche markets. HANOI Vietnam is expected to add 36 million people to its middle class by 2030, according to a recent report by McKinsey. "I sold a $4,000 leather jacket recently," said Do Huong Ly, a stylish young saleswoman at the Roberto Cavalli shop in Hanoi. Vietnam's Ministry of Labor, Invalids and Social Affairs estimates there are 23,000 street children in the country and 1,500 in the capital Hanoi. Boosting agricultural productivity is key to maintaining livelihoods for those remaining in the rural economic system in the face of significant structural change. But she lives in fear that her father, a college professor, will learn about her five Louis Vuitton handbags. His wife, Thuy, is a teacher; together they earn $14,000 annuallya staggering sum compared with the Vietnamese average of about $500. Vietnam "The rate of change in Vietnam is accelerating beyond even our optimistic assessments," gushed a Merrill Lynch report in October. This has contributed to the economic well being of the population and is reflected in the high Human Development Index and the Gender Development Index relative to other countries at similar levels of development. [Source: Grant McCool & Nguyen Nhat Lam, November 10, 2006 :::]. Some brands offer cultural training for staff in key global shopping cities and hire speakers of Southeast Asian languages. Vietnamese consumers enter the middle class and put midsize cities on the radar Asia is the worlds consumption growth engine: miss Asia and you could miss half the global picturea $10 trillion consumption growth opportunity over the next decade, according to recent McKinsey Global Institute research. The buying propensity of the mass affluent also tends to be more stable than that of the middle class during times of economic volatility. Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings. The growth rate slowed to 6.8 percent annually in the subsequent eight-year period to 2004 and has since returned to around 8 percent. The corresponding chart tracks USD-VND values from March 2014 to March 2019. "Families who can afford it, make almost an overadjustment and think a chubby baby is a healthy baby." ////, AFP reported from Hanoi: "Over a generation, urban Vietnam has emerged from post-war austerity into a fast growing consumer society, a trend set to speed up as WTO membership attracts more foreign companies, analysts say. Graduating to high-income status requires higher labor productivity. The Asian upper middle class can be viewed as two subsegments: those below 35 and those above it. "Vegetables, meat, household utensils, everything. The gains enjoyed by the urban population, however, are not limited to such things as increased income per capita. (See The Age of the Affluent: The Dynamics of Chinas Next Consumption Engine, BCG Focus, November 2012.) 1 JPY = 207.33 VND Ten years younger than An, she is busily cleaning before the rush of visitors who will be coming for Tet, including their daughter, who lives in California. We may become richer but lose our soul." The country's economy grew by 8 percent in 2006, and average per capita income has increased to $723 in 2006 from $485 in 2003. Those tire-sandaled troops who bested the French colonial army and outlasted the Americans embodied frugality and egalitarianism. Companies that take into account the common values and behaviors among the affluentand use digital and travel channels to reach these consumerswill greatly increase their ability to succeed in what promises to be one of the greatest growth opportunities in Southeast Asias economy. In the past year it has persecuted dissidents, restricted public gatherings, controlled access to the Internet and prohibited all free press and independent labor unions. They are well educated and theres a general sense of optimism because of that," he said. With the surging property market, I knew I'd make money." Vietnam expected to add 36 million middle class people in Vietnam's government remains intolerant of criticism, Human Rights Watch's 2007 World Report finds. Today the canal banks are lined with trees. Whoever they are, they have influence or at least high-ranking sponsors who have allowed the club to use the premises of the neighbouring National Library as a carpark for their Mercedes-driving patrons. Fading as the most important economic sector in Vietnam. "You are first-class citizens if you go to work in a car," Do Thanh Trung, manager of a small import-export firm, said proudly after spending $29,000 on a second-hand Mercedes C200. Premium and luxury brands are aggressively pursuing the traveling affluent. By its own estimates, the most affluent 20 percent of the population is seven times better off than the poorest two percent. As we stare at the papers heaped in the driveway." Airport duty-free shops should be viewed as outlets for selling much more than cosmetics and spirits. Honda, Mercedes, BMW, GM Daewoo and Toyota say sedan sales in the first 10 months of this year jumped 15 percent to 14,114 units. Upper middle class They control anywhere from 20% to 40% of household wealth in the most populous economies, and this share is likely to rise sharply to about 30% to 65% for key Southeast Asian markets by 2030. Its portfolio in Vietnam, for instance, starts with budget brands (such as Tiger Beer priced at about 50 cents a can) and extends to high-end beers (such as Heineken and Affligem, costing $1 to $2 per bottle) with other brands at key price points in between. Access to new knowledge and innovations, including application of appropriate digital technologies, would support productivity growth by substituting for labor intensity. Here drugs, crime and prostitution flourish. This website uses cookies so that we can provide you with the best user experience possible. VNA Saturday, December 11, 2021 14:15 Over the next decade, 36 million more consumers may join Vietnams middle class, defined as consumers who spend at least 11 USD a day in purchasing power parity terms. ////, Cuong's mother, Nguyen Thi Nhu Loan, owns the Cuoc Cuong timber company, which is based in the Central Highlands. To finance the public investments needed to eliminate poverty and grow the economically secure and middle classes, Vietnam can broaden its tax revenue base (personal income tax, property tax), and explore the use of new taxes which both raise revenue and address negative externalities. BMI's biannual student recruitment fairs in Indonesia, Thailand and Vietnam draw in thousands of academically-oriented students and their parents to bring them in direct contact with institutions from around the world. Many of the customers are tourists. Vietnam is determined to pursue rapid and sustainable economic growth combined with environmental protection to progress to prosperity. The roundup campaigns aim "to remove street children, beggars and vagrants from the street and out of view of international visitors," said the group. They are mostly young, independent, and confident in their choices of brands and in their self-earned wealth. Join these events in Vietnam to recruit students directly via our fairs and attend our peer-to-peer events to build connections with high school counsellors and recruitment agents. WebIn sociology, the upper middle class is the social group constituted by higher status members of the middle class. Upper middle class The income-consumption curve for other products is more linear: spending on laptops, cosmetics, and beer, for example, increases steadily as household incomes rise. In addition, companies must master newways to market productsways that appeal to a consumer psyche that is dramatically different from that of the middle class. Vietnam has its sights set on becoming a developing, upper-middle-income country with modern industry by 2030, when it celebrates the 100th anniversary of the founding of the Communist Party of Vietnam. By 2020, the country is expected to have 30 million middle class and rich consumers. Brands without price ladders that match the upgrading pattern of consumers run the risk of losing their customers to competitors as incomes rise. "You see Hanoi and Ho Chi Minh City -- bright lights, big cities -- but people here haven't tasted the economic growth yet," he told AFP. They already know which stores they will visit during an upcoming trip to the US. Analysis suggests that past NTPs helped improve access to services and achieved some positive impacts on improving welfare, but gaps were also identified. In the one-party state, the Communist Party leadership has made clear that as far as the economy goes, there is no turning back. Meanwhile, market research firm Nielsen has estimated that the number of middle class Vietnamese will reach 44 million by 2020 and 95 million by 2030. The heavy security presence, which, according to several waiters, includes undercover, gun-carrying guards hired from police ranks, appear keen to keep observers guessing. Vietnams per capita income is expected to increase to US$3,000 by 2020 from its current level of US$1,960. But all of the residents in these places still suffer from inadequate provision of clean water and basic sanitation and remain highly vulnerable to natural disasters and market fluctuations. [Source: Xinhua, January 10, 2007], In 2002, Tran Dinh Thanh Lam of the Inter Press Service wrote: "Up until recently, economists saw no great difference in individual incomes in Vietnam as could be expected in a socialist country. Using Digital Media. In the cities, Matthaes said, eight out of 10 households now have DVD players and other expensive purchases set for mass growth include plasma and flat screen TVs and modern banking services. "Most of the young people in Vietnam are not like this,'' Nhu said. "A $50,000 car is nothing for this family,'' said Truong Thi Cao Cac, 38, who lives next door to Mai Dang Khoa, a 25-year-old racer who worked in his parents' textile business. In particular, Vietnam is considered a high-potential market for electric cars in the near future. The son of one top Communist Party leader is widely believed to be among the investors. Ho Chi Minh City had more than 11,700 divorce cases in 2000, up about 12 percent since 1990, according to a report of the local daily Vietnam News. [Source: Thomas A. Bass, The New Yorker, May 23, 2005 ////], "We kick off our shoes and enter the large room that used to serve as Ans office and library, as well as the reception and dining room. ", In the late 1990s the Vietnamese government estimated there were has around 16,000 children under 16 living on the streets. In the Mekong Delta provinces, for instance, a majority of the population have seen an increase in their incomes in the past several years, while keeping the gap between rich and poor there at a minimum. We provide a wide array of financial products and technical assistance, and we help countries share and apply innovative knowledge and solutions to the challenges they face. (Photo Other major crops are sugarcane, cassava (manioc), corn (maize), sweet potatoes, nuts, banana, coconut, mango, jackfruit, citrus, coffee and tea. Instead, they prefer to show off areas where the slums have been cleared. When they take a large dong note from a tourist to get change they leave their things behind on the tourist's table so the tourist doesnt worry about the kid running off with his money. A disproportionate number of the poor also belong to ethnic minorities. Travel spending increases sharply when Southeast Asians enter the ranks of the affluent. -, "The government is naturally sensitive about the slums. We project that by 2030, 47% of mass-affluent consumers will have held that status for more than a decade, compared with only 31% now. Le Labo, for example, hand blends perfumes in front of customers, enabling them to share in the experience of preparation. Although they are starting to buy luxury goods, many are still in the process of trading up to premium products in categories such as personal care, food and beverage, and footwear.
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