Vietnam sees rising household affluence: report

Driven by sustained economic growth, Vietnam has seen a rising number of affluent households in recent years which has a great impact on consumer trends in the country, according to a market research report.

The country now has 15.8 million households, or 56% of the total, with a monthly income above VND15 million ($592), classified as the ABCD economic class. This equates to 56.2 million people, Ho Chi Minh City-based market research company Cimigo said in a recent report on consumer trends.

In 2022, 15.39 million households, or 54.75 million people, belonged to the ABCD economic class.

Economic class is provided by grades ABCDEF and is based on claimed monthly household income. 2022 data was taken from over 145,000 Cimigo household sample surveys.

Vietnam’s GDP growth averaged 5.8% over the past 10 years, according to data compiled by Cimigo.

According to the company, there has been a low incremental change in 2024 wealth over 2023. The country now has 1,470 ultra-high net worth people (with over $30 million), up 2% from 2023. In addition, there are 66,901 millionaires, up 2.2%, and the number of households with $1,000 monthly income is up 1.5% to 6.18 million.

The survey observes an acceleration in the middle class. Migration and lower birth rates mean that households are smaller and wealthier.

Overseas Vietnamese students spend an estimated $5.1 billion in 2024. South Korea is the top destination, with 43,500 Vietnamese students, or 20.2% of the total worldwide. The runners-up are Japan, Australia, the U.S., Canada, and the UK.

Emerging trends see thriftiness gaining popularity among younger consumers, who gravitate towards secondhand fashion as a sustainable, eco-conscious alternative. Vietnam is seeing a rise in single-person households, leading to increased demand for solo travel, compact living spaces, pets, and single-portion meals.

According to the report, digital payments have become ubiquitous, with nearly 40% of consumers using banking apps for their latest purchases. This shift has helped expand financial inclusion, especially in urban areas where modern trade has made significant inroads.

The consumer finance market in 2023 swelled 11% over 2022 to $113 million, or 26% of GDP. Buy now pay later (BNPL) reached $2.34 billion in 2023, soaring 113% year-on-year.

Vietnam’s digital economy is valued at $30 billion today, reaching 7% of its GDP, with online shopping accounting for 53%.

Social media moves from connection to commerce. Products and services such as live-streaming commerce, shoppertainment (a blend of shopping and entertainment) and conversational commerce have become commonplace. “This social commerce revolution has paved the way for local and regional marketplaces and super apps,” said the report.

Shopee dominates the e-commerce landscape, but TikTok is quickly emerging as a strong challenger in the digital marketplace, particularly in social commerce.

The retail landscape in Vietnam continues to evolve, driven by the rise of modern trade and e-commerce. Modern trade, which includes organized retail formats like supermarkets, convenience stores, and mini markets, has gradually increased its share among retail sales channels in Vietnam.

In 2023, modern trade accounted for 27% of total retail sales, up from 15% in 2005. This shift reflects a growing consumer preference for convenience, quality, and a more structured shopping experience.

In the long term, Vietnam is poised for continued economic growth, driven by FDI, a youthful workforce, and an expanding digital economy.

However, businesses must navigate a challenging consumer landscape where demand remains muted, and price sensitivity is high. Vietnam will stand out as a high-growth economy over the next 10 years.

As Vietnam transitions into a more affluent, digitalized society, companies that adapt to these trends will be well-positioned for success, said the Cimigo report.