VietNamNet Bridge - Though Vietnam is among the countries with lower average income, many Vietnamese are still willing to spend big money on luxury goods.

Asia Briefing recently reported that of the 50 Mercedes-Maybach S600s priced at VND9.6 billion, which will be launched into the global market, Vietnamese super-rich had ordered 10.

Nguoi Lao Dong reported that the lot of luxurious Hermes handbags imported to Vietnam recently sold out just within a short time, though they sold for VND1.6 billion.

Foreign newspapers reported with surprise that Bugatti, Rolls Royce, Bentley and Maybach cars all are available in Vietnam, while many luxurious automobile manufacturers have set up sales agents here, commenting that Vietnam is a paradise of luxury goods.

The CEO of a luxury phone brand from the UK said he was surprised when seeing that many Vietnamese use smartphones valued at tens of thousands of dollars.

A report of Knight Frank showed that the demand for luxury goods in Vietnam has been increasing sharply. Branded goods have been available at shopping malls in Hanoi and HCM City, while foreign food has been imported en made.

Bearing the luxury tax which is 2-3 times higher than the luxury tax imposed on domestic products, wine products from France, Italy Chile and Russia are still present in Vietnam for the many years and especially selling well at restaurants and hotels.

Despite the impressive growth gained in recent years, Vietnam still cannot leave the group of countries with lower average income with the current GDP per capita just equal to that of Malaysia in 1998, Thailand in 1993, Indonesia in 2008, the Philippines in 2010 and South Korea in 1992.

A report of the General Statistics Office (GSO) released in late August showed that Vietnam’s GDP per capita in 2014 was $2.052 per annum. The figure was 21 times higher than that in the 1990s, but just equal to 3/5 of Indonesia, 2/5 of Thailand, 1/5 of Malaysia, ¼ of South Korea and 1/27 of Singapore.

Vietnam is listed among the four less developed countries in ASEAN which include Cambodia, Laos, Myanmar and Vietnam. Regarding the business environment, the World Bank puts Vietnam at the 78th position among 189 countries and territories.

Vietnam lags far behind ASEAN countries, including Singapore which has the Number 1 position, Malaysia the 18th and Thailand the 26th. It is just above the Philippines, the 95th, Indonesia the 114th, Cambodia the 135th and Laos the 148th.

Vietnam has seen productivity improve, but this was gained thanks to labor re-organization, not to improvement in technology and working skill. 

Economists believe that Vietnam will only catch up with the Philippines in productivity by 2038 and Thailand by 2069.

NCDT