Ordinary Vietnamese such as Le Binh Thuan were awed by newspaper accounts of the racers' wealth. "Other students go study abroad, and then they come back and use their knowledge to help the country.'' In the Philippines, these households have monthly incomes exceeding $465, in Thailand $442, and in Vietnam $660. Lai Hai Nhu, a 21-year-old university student, said the young men seemed to have squandered the opportunities their wealth had given them. Vietnam is expected to add 36 million people to its middle class by 2030, according to a recent report by McKinsey. We believe that companies in the region, as well as those outside it, should take a closer look at the mass-affluent market and plan to target it. If these ten member states were one country, it would have the worlds third-largest population. Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings. The canal water often breaks its banks and floods this area, especially during the summer rainy season, leaving a layer of mud that breeds disease. Vietnam expected to add 36 million middle class people in [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. When they travel further, however, she and her three high schoolage children plan their trips carefully around shopping. More-experienced-affluent consumers search for tangible proof of value, such as workmanship, the use of advanced technologies, or the use of special or sustainably sourced materials. ByAparna Bharadwaj,Justine Tasiaux, andVaishali Rastogi. 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. A Chinese landscape painting hangs above a green upholstered sofa and chairs. Logging onto the Internet, he demonstrated a vocabulary lesson, repeating the words on the monitor: Bob and Jane are staying with their Uncle George in Pittsburgh. Beaming with pride, his father told me, My dream is that he becomes an engineer, a doctor or a lawyer, and cares for me when I retire. I wished the youngster good luck. ::: Describing the home of Pham Xuan An, a former North Vietnamese spy who now lives comfortably in Ho Chi Minh City, Thomas A. Bass wrote in The New Yorker, "An leads me through his garden, a tropical enclave lush with star fruit and bushberry trees. Using Digital Media. Companies need a robust online presence to enable consumers to discover their products in both official and unofficial channels, but it is also critical that brands maintain some level of exclusivity to protect their image. 1 AUD = 16,423.54 VND The nation boasts enviable, consistent growth rates which has attracted foreign direct investment,encouraged exports, and strengthened the country from within, spurring domestic demand and spawning a rising middle and upper class. faces of the Vietnamese consumer No more bad smell!" In 1998 Reuters reported: "Vietnam Premier Phan Van Khai has called for swift action from local authorities to tackle the growing numbers of street children in the country, local media reported. "This trend presents a potential future social challenge for policy makers in Vietnam," says Robert Glofcheski, a senior economist with UNDP Vietnam. Southeast Asias Mass Affluent Are the Next Megamarket: Explore the infographic. The government aimed to boost this further, with a 2018 target of 135,000. Rolex and Patek Philippe, for example, are forming partnerships with artists to create small quantities of distinctive products. The middle class earning USD 714 a month or more in Vietnam will double to 33 million people, about a third of the population, between 2014 and 2020, according to Boston Consulting Group. 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. "Sometimes I ask myself how they can spend all that money in one night," said Sonny, the club's resident Filipino DJ. "I wouldn't say it's the dark side of Vietnam, but here people say they suffer food shortages for three months a year." 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. "Vietnam wants to open up economically, but the ruling Communist Party also wants to keep political control," said Faulkner. Companies pursuing the affluent must be sensitive to this reality in their marketing and build a social license by demonstrating clearly that they are contributing to broader economic development and social inclusion. 2020 in this case). In the Philippines, these households have monthly incomes exceeding $465, in Thailand $442, and in Vietnam $660. 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. However, since many of these consumers live in urban centers and exhibit similar behaviorssuch as using digital media and traveling frequentlyit is entirely feasible for brands to create a regional strategy that reaches a very high share of the areas mass-affluent consumers as a collective target group. In Indonesia, for example, the affluent already account for a significant amount of all spending on restaurants (42%); leisure and travel (46%); watches, jewelry, and eyewear (49%); and cars (53%). Leaders face an uncertain landscape. We also found that the regions affluent consumers keenly understand what to buy where. There was significant progress in poverty reduction from 2010-2020, but Last Mile challenges in tackling poverty remain. Herms, for example, tightly limits access to VIP events, and the product selection depends on customers status with the brand. They plan to soon buy a single bull to genetically improve the local livestock. The report also said the group of middle-aged people from 45 to 65 years old would play the main role in Vietnams middle class population. 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. 1 EUR = 26,389.18 VND Vietnams per capita income is expected to increase to US$3,000 by 2020 from its current level of US$1,960. However, the mass affluent are far more accessible than most companies realize. Most did not go back to their homes in the countryside but returned to Hanoi with no new alternatives." They snake through the city towards the west and north. "Maybe in 2020", Mr Vong says. "Fish teach you to keep your mouth shut." In 2020, they accounted for 20 percent of that groups consumer spending and this will rise to nearly 25 percent in 2030. One is the Nhieu Loc canal district, on the road used by visitors arriving in Saigon from Tan Son Nhat airport. In fact, our research found that as incomes increase, the affluent who previously bought well-known consumer brands are passing over well-known premium brands and gaining the confidence to move directly to superpremium, niche, and boutique brands. They survive by selling newspapers and lottery tickets, shining shoes and begging. Media accounts portrayed two of the young men as loafers who spent their time spending their parents' money. Vietnam Upper-middle-income economies have GNI per capita of $4,046 to $12,535. Even active online shoppers, though, still enjoy shopping in conventional, brick-and-mortar outlets. But as they become experienced-affluent consumers, they tend to focus on fine dining and luxury goodssuch as watches, jewelry, and liquorthat reflect more refined tastes. This is particularly true with luxury brands. In fact, Tokyo and Seoul have emerged as among the top shopping locationstaking over from Hong Kong and Singaporefor affluent Southeast Asians across most major luxury categories. So these consumers are relevant not only for luxury brands, such as Chanel and Diageo, but also for companies such as Johnson & Johnson, P&G, Heineken, and adidas. in Vietnam The broad based growth in Vietnam in the 1990s and 2000s contributed to rapid poverty reduction across all regions of the country. ////, But in recent years, as it has opened up the economy, the government has been portraying capitalism as a force for social improvement -- a way of generating jobs and income in a developing country yearning to raise its standard of living. Beyond the Crazy Rich US President Bill Clinton came here on a visit four years ago, to see the progress being made. Officials did not allow the BBC to interview slum-dwellers or their helpers in the worst slum areas, like the one around the Thi Nghe canal. Web2022 Vietnam Poverty and Equity Assessment From the Last Mile to the Next Mile. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. Moreover, the social protection system can play a larger role (discussed as part of the Next Mile agenda). Reaching the ambitious goal of upper-middle-income status would require Vietnam to grow at least 7 percent per year, raising the average income level to over $7,000 or $18,000 in purchasing-power parity terms by 2035, compared with $2,052 or $5,370 in PPP terms in 2014. Earlier this month, three youths died and two were badly injured racing their motorbikes in another part of the city. Vietnam has seen annual economic growth of 7-8 percent in recent years but the scrapping of state subsidies and farm cooperatives has widened the wealth gap and sent poor rural families and lone children to cities looking for work. According to the CIA World Factbook Household income or consumption by percentage share: lowest 10 percent: 3.2 percent; highest 10 percent: 30.2 percent (2008). "There are some people in urban areas who have become very rich but there are not enough of them to affect inequality measures." 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%. The biggest problem, Mr Ly says, is finding the money to compensate the slum-swellers for the land. Progress in poverty reduction was set back but did not reverse in 2020. ^^, In 2007, AFP reported from Na Lia, a poor village in northwest Vietnam, "Vietnam's cities are being transformed by rapid economic growth which has brought fashion boutiques, fast food and traffic jams, but most people in this remote northern village wouldn't know. They have access to health care. The roar of engines and blaring stereos awoke Nguyen Van Quang, who sleeps inside the tiny bar where he works. There are a bunch of people like me, explained Jaydren, 40, a self-described adidas fan and a project manager for a construction company. ////, The room has been changed since I last visited. 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. 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). There are few countries in the world whose economic growth can compare to Vietnams. 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 legendary North Vietnamese general Gen. Vo Nguyen Giap said: "Before, we launched a war against foreign aggressors. according to the World Bank. But in Myanmar and Vietnam, it comprises only the established middle-class and affluent segments. 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. By 2020, the country is expected to have 30 million middle class and rich consumers. A rice farming hamlet of about 400 Tay ethnic minority people without telephones, television or even electricity, Na Lia is part of another Vietnam, the rural hinterland that is struggling to catch up with the boom. Khai, speaking at a two-day conference on street children said officials from rural areas should go to Hanoi and Ho Chi Minh City to collect children who have migrated from their areas. Boston Consulting Group is an Equal Opportunity Employer. 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. com, Vietnam National Administration of Tourism, CIA World Factbook, Comptons Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, Fox News and various websites, books and other publications identified in the text. (See Exhibit 6.). [Source: Xinhuanet, June 11, 2002 \^/], "Explaining the trend of divorce among young couples, Nguyen Minh Hoa of the Ho Chi Minh City Teacher College, who studied 5, 000 divorce cases, offered that young couples have to face big challenges during the first five years of marriage.
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