Vietnam market has a bright future! The consumer population may increase by 36 million in the next ten years

Driven by continued investment in manufacturing and increasing demand for foreign productivity, Vietnam's manufacturing advantages are even more prominent. Over the past 20 years, Vietnam's GDP has grown at a compound annual growth rate of 5%, 1.7 times the global level. Even in 2020, when the epidemic caused severe damage to the global economy, Vietnam's GDP growth rate was still 2.9%.

According to the latest research by McKinsey Global Institute, if you miss out on the Asian market, you may miss out on about $10 trillion in future consumer growth opportunities. And Vietnam has the ability to become an important driving force for the Asian consumer market.

In the next decade, Vietnam is likely to add about 36 million consumers, that is, consumers who spend at least $11 a day in terms of purchasing power parity (PPP). In 2000, less than 10% of the population in Vietnam belonged to the consumer class, but now this proportion has risen to 40%. It is expected that by 2030, this figure may reach 75%.

According to the report, by 2030, "digital natives" born between 1980 and 2012 are expected to account for 40% of Vietnam's consumption. People born during this period are proficient in digital technology and have integrated the rapid digitalization of life into Vietnamese daily life and communication, especially in the field of e-commerce.

Currently, Shopee and Lazada are already active in the local market. The rapid rise of digital consumers has driven innovation in retail and purchasing behavior, and the proportion of online consumption through various channels has gradually increased.

For example, local social software Zalo is one of the most popular local applications, with 52 million active users per month, and has also become an important marketing channel; TikTok is also used by 55% of Generation Z in Vietnam; business social networking sites and live streaming platforms such as Mio are also shaping consumption patterns by creating new ways to attract more young shoppers to consume.

All these new trends have forced businesses to reconsider their marketing budget allocation. They have also realized the importance and daily popularity of online channels. In 2021, Vietnam's online advertising expenditure is expected to reach US$1 billion, and will grow by about 22% annually before 2025.

As Vietnam's demographic structure and environment change, consumers' consumption structure and preferences have also changed.

Asian brands have a strong position among many Asian consumers, including in Vietnam. For example, in the fast-moving consumer goods sector, Asian brands have an annual revenue growth rate of 9%, while global non-Asian brands have a revenue growth rate of 5%. And most of the fastest-growing retail chains are also local companies in Vietnam.

Vietnamese consumers are also starting to make more conscious choices about consumption. For example, coffee shops are reusing straws and mugs. 84 % of Vietnamese consumers said they are willing to pay a premium for conscious lifestyle products.

Therefore, considering the current situation, Vietnam's consumer market is still full of vitality and momentum. Business sellers can seize the opportunity and combine their own advantages to attract more Vietnamese consumers.

Vietnam

Consumer population