Investment opportunities in Vietnam's middle class

Vietnam's economic trajectory

Vietnam's rise in the global supply chain is pivotal to its economic trajectory, fueled by a robust manufacturing sector and booming exports, according to Vietnam Briefing.

In the first half of 2024 alone, the country's export turnover is estimated to reach 190.08 billion USD, up 14.5% over the same period last year due to the recovery of global demand.
Vietnam’s strategic infrastructure investments, which account for around 6% of GDP – higher than the ASEAN average of 2.3% – have cemented Vietnam’s position as a global manufacturing hub. These investments, coupled with Vietnam’s numerous free trade agreements, have fostered a favorable environment for manufacturing and trade growth.

The middle class is growing stronger.

Although the middle class in Vietnam does not have a standard definition due to different income thresholds and dynamic economic contexts, World Data Lab often defines the middle class as individuals who spend daily from 12 USD (300,000 VND) or more.

Geographically, the middle class is mainly concentrated in urban areas, especially in large cities such as Hanoi and Ho Chi Minh City. This concentration drives significant demand for a wide range of goods and services, influencing market trends and opportunities. Vietnam’s ambitious middle-class consumers prioritize investment in education , health care and housing, improving their quality of life.

In addition, they increasingly focus on entertainment activities, travel experiences and personal development.

With a population of nearly 100 million and a young median age, many young individuals are entering the workforce, earning money and contributing to the growing middle class.

Vietnam’s expanding middle class is having a profound impact on the country’s economy and society. This demographic group is driving growing demand for new goods and services while making significant investments in education and real estate.

Internationally, Vietnam's middle class is emerging as a significant force, playing an important role in international trade and investment.

Investment opportunity

According to Vietnam Briefing, the urban population is creating new opportunities, especially in the service and manufacturing sectors.

The middle class is becoming more discerning in its consumption habits, driving demand for high-quality goods and foreign brands. The booming e-commerce industry has also become an important shopping channel for middle-class consumers, significantly boosting the country's retail industry.

In addition to material goods, the middle class is shifting to spending more on non-essential items, prioritizing experiences such as travel, dining out, and entertainment. Therefore, Vietnam Briefing suggests that foreign businesses can align their product portfolios and distribution channels to meet the changing demand for value for money.

Businesses can also tailor premium services to attract affluent customers, especially younger generations who are willing to invest more in quality.

As the Vietnamese consumer market matures, there will be more room for premium brands to penetrate. Companies with established brand portfolios and distribution networks should consider introducing premium products tailored to Vietnam to capture this segment.