Why Vietnam

Vietnam’s shift from a centrally planned to a market economy, over the last 30 years, has remarkably transformed the country from one of the poorest in the world into a lower-middle income country. After decades of neglect, the international audience has noticed Vietnam’s achievements and its ongoing global integration and the country is now seen as one of the most dynamic emerging countries in Asia and the World.

In 2016, the World Bank already classified Vietnam as a middle-income economy and PwC, on a long-term horizon, expects Vietnam to be the top fastest growing economy until 2050 with an average growth of 5%.

The historical and estimated future growth prospects, prudent government reforms, beneficial trade agreements with major trade partners around the world and increasingly internationalized foreign investment laws has led to an influx of both direct and indirect foreign investments.

Vietnam, after all, has emerged as production hub for high-tech products, where Intel produces 80% of its personal-computer processing units. Also noteworthy is that 1 out of 10 smartphones are nowadays produced in Vietnam.

Our optimism to invest in Vietnam is built in 4 key pillars

URBAN MIDDLE CLASS

Unprecedented uptick in affluence

The middle and affluent class (MAC) includes those people whose monthly income is at least VND 15mn (USD 750), a threshold at which consumption is observed to take off. It’s estimated that Vietnam’s MAC population will increase from 12mn in 2012 to 33mn in 2020 at an annual growth rate of 12.9%, higher than Myanmar (8.4%), Indonesia (8.4%), and Thailand (4.2%).

MAC population in million people 2012 vs. 2020

Sources: BCG CCCI models; BCG analysis.

Third of the nation reaching prosperity by 2020

MAC population % annual growth 2012 – 2020

Sources: BCG CCCI models; BCG analysis.

Sources: BCG CCCI models; BCG analysis.

MAC consumers in Vietnam are spreading out

In addition to growing in size, the MAC population will also spread out to other provinces and cities besides the ones surrounding the current hubs (Ho Chi Minh City and Ha Noi). Vietnam’s rural population (currently 62%) is getting wealthier and more connected to new consumption trends, thanks to cheap internet coverage and increasing mobility. 

Vietnam’s consumers are increasingly connected to modern communication

Usage in % for the whole nation

Sources: Nielsen