Vietnam, among the fastest growing luxury markets worldwide
According to the General Statistics Office, Vietnam imported USD10 billion worth of luxury products in 2010, most of which were wine, tobacco, jewelry and mobile phones. The growth rate has worried authorities to the extent they plan to impose higher taxes. Under the Law on Special Consumption Tax, Vietnam started to levy luxury taxes in April 2009 on various imported products like tobacco, beer and wine, cars, private planes and boats. Vietnam’s trade deficit was more or less stable last year, but that’s thanks to surging exports. The problem is that even though exports rose 25.5 percent to USD 71.6 billion, they could not offset the 20.1 percent increase in imports, to USD 84 billion.
One of Vietnam’s wealthiest local community lives in Ho Chi Minh City (Saigon), where the authorities have projected gross domestic product per capita to reach USD 3,130 this year and USD 4,800 by 2015 from the over USD 2,800 in 2010. Ho Chi Minh City also concentrates the majority of the major international luxury brand retail locations in Vietnam. Dong Khoi is the leading luxury high street, with the Gucci, Dior, Yves Saint Laurent, Prada and Louis Vuitton mono-brand stores.
Gucci have been operating two stores in Vietnam, one in Ho Chi Minh City (Sheraton Hotel) and the second one in Hanoi (Hong kong Land Centre). Louis Vuitton, one of the first entrants on the Vietnamese market, have been operating two stores, one in Ho Chi Minh and a second one in Hanoi, within the Sofitel hotel. Hermes is represented with a mono-brand store in Hanoi, within the Metropole Arcade at the Sofitel Hotel.
Among the latest openings was the first mono-brand store of Cartier in Ho Chi Minh City earlier this year, within the Rex Hotel situated in the centre of the city. Cartier plans a second boutique in Vietnam and this store would possibly be in place in Hanoi in the future. Other top jewellery brands operating mono-brand boutiques in Vietnam are:Piaget (Continental Hotel), Chopard (Diamond Department store). Through its local exclusive distributor, Rolex is present with two boutiques, one at the Diamon Department Store and one within the Rex Hotel, both in Ho Chi Minh City.
As for the consumer profile, Vietnamese are similar to Chinese, not only in the amounts they spend but also in the choice of product, most analysts considering the wealthy Vietnamese as being a sophisticated consumers. While the super rich represent only 1% of the population, the number of upper middle class luxury consumers is growing at a staggering rate.
By far, the most developed luxury sector in Vietnam is hospitality, with all the major international players present. From luxury resort operators such as Six Senses and Aman Resorts, major luxury chains such as Sofitel (Hanoi, Hi Chi Minh), Park Hyatt (Ho Chi Minh) and InterContinental (Ho Chi Minh, Hanoi)
The luxury sectors which present the highest opportunity for growth in Vietnam:
- luxury day SPA’s (city)
- luxury hospitality (business hotels)
- gourmet, organic retail
- fashion and accessories concept stores