Le Tien, 28, not only can earn money from his main job as a tour guide, but also from cross-border trade. When he leads groups of travelers abroad, he usually buys products in other countries and brings to Vietnam to sell for profit.
“The products are mostly branded clothes, footwear, handbags and cosmetics,” he said.
High-income earners like the products Tien brings to them, because they want original products, which are not available in Vietnam.
“I often buy Dior or Gucci products because the demand is high. Each item is valued at VND70-80 million,” he said.
The top concern of foreign investors seeking to expand their business in Vietnam is the strong rise of the middle class.
Vietnam’s middle class is the major client of Tien and foreign enterprises in Vietnam.
Daryl Tay, CEO of UPS Vietnam, commented that more and more middle-class Vietnamese buy products online across border. His company’s job is bringing products the buyers order from UK, US or other countries to Vietnam and deliver to them.
“Cross-border e-commerce has been developing rapidly. More and more e-commerce firms seek supply sources in Vietnam. More and more Vietnamese order on e-commerce sites,” he said, adding that the number of middle-class earners has been increasing.
Middle-class people are those who have monthly income of VND15 million and more. It is expected that Vietnam will have 44 million middle-class people by 2020.
Meanwhile, according to Boston Consultancy Group, the Vietnamese middle class and wealthy people are those who have the monthly income of $714 and higher.
A survey by Brookings Institute has found that the growth rate of the Vietnamese middle class in the 2005-2015 period was 14 percent per annum and it is expected to rise to 18 percent in 2016-2020.
Figures show that Vietnam has the sharpest increase of the middle class in South East Asia. A four percent growth rate has been predicted for Malaysia and Thailand in 2016-2020, while Indonesia expects 12 percent.
Vietnam not only attracts foreign companies because of the expanding middle class, but because of changes in spending habits.
“Vietnamese lifestyles have changed rapidly and they are willing to pay for large plans to upgrade their lives,” said Nguyen Huong Quynh, CEO of Nielsen Vietnam.
A report from a market analysis firm showed that the number of people who put their money into savings decreased by 13 percent in the second quarter compared with the first quarter.
At a recent meeting with the press, Alexandre Bouchot from the French Embassy said that in 2015-2017, French farm exports to Vietnam increased by 25 percent.
He commented that Vietnam is an emerging country with a growing middle class and increasingly high demand for high quality food.