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Vietnam's tech-savvy consumers propel growth
Research shows that in 2 years, household spending power rose 25 per cent in Hanoi and Ho Chi Minh City.
A new middle class of young, tech-savvy consumers with money to buy mobile phones, home electronics and other luxury items is set to propel Vietnam's economic growth for years to come.
Accounting manager Nguyen Minh Duc is one of this new generation in Hanoi, one of the few Communist Party-run capitals in the world. On a May morning at a shopping mall filled with brand name products, he bought a digital video camera imported from Japan for $1,000.
"I like electronics and I saved money for about five months to buy the camera," said Duc, 30. "I'll mostly use it to film my family."
Market research shows that in the last two years, household spending power rose 25 per cent in Hanoi and Ho Chi Minh City, the commercial centre, one indication of a middle class evolving in the cities and towns of the mostly poor southeast Asian country of 82 million people.
"You could say that Vietnam has literally gone from using the abacus to the Pentium 486 personal computer overnight," said Ralf Matthaes, managing director in Vietnam of the TNS global market research firm which surveyed urban households in 2004.
The consumerism trend showed that disposable income had risen in the past five years to 40 per cent of income from 18 percent in Vietnam's two main cities, Matthaes said.
Vietnam's gradual liberalisation over 15 years toward a market system after decades of war has made it one of the world's fastest growing economies, despite some criticism that reforms have been too slow.
Estimated economic growth was 7.7 per cent in 2004 and the government aims for 8.5 per cent growth in gross domestic product for 2005.
According to the International Monetary Fund, inflation rose sharply in 2004 to an estimated 9.7 per cent and is estimated to rise by about 7.5 per cent or higher in 2005, in line with other growing Asian economies.
