Characteristics of Vietnamese consumers

Characteristics of Vietnamese consumers

The income of Vietnamese people has rapidly increased in recent years but is still at an average level compared to the region and low compared to the world. This is one of the main factors affecting the consumption behavior of Vietnamese people. In addition, with about 65% of the population in rural areas and only 35% of the population in urban areas, price remains an important factor in Vietnamese consumers' purchase decisions. Therefore, the popular imported goods in Vietnam’s market are still those from China, ASEAN and other Asian countries with competitive prices which are in line with the financial ability of Vietnamese consumers. Moreover, the geographical distance between Vietnam and these countries is relatively close, leading to low transportation costs which is an important factor in reducing product costs.

However, Vietnam's middle class has been increasing, and Vietnamese consumers' preference for high-quality imported products from European and American countries are increasingly growing. In addition, the popularity of the internet along with the development of e-commerce has helped consumers understand more and more about foreign products.

In recent years, Vietnam has increasingly promoted the negotiation and signing of Free Trade Agreements (FTAs), expanding partnerships with countries and regions around the world. Thus, commitments on tariff reduction and market opening in FTAs, along with the development of the transportation and logistics sectors that help reduce transportation costs... have facilitated imports from remote geographical areas to easily access the Vietnamese goods market.

Currently, Vietnamese consumers are increasingly "smart" and more careful in shopping, especially for high-priced products. The era of the internet and social networks has made it easier for consumers to access information about products, so they will easily compare prices and review product quality before making a purchase decision. In addition, Vietnamese people are often very interested in the origin of goods, they tend to believe in the quality of products from developed markets (such as the Americas, Europe, Korea, Japan…) rather than that from other developing ones (China, ASEAN countries…) and domestic products. The items that Vietnamese consumers are particularly interested in and often prefer imported products from developed countries are: children foods, functional foods, medicines and cosmetics, automobiles, some luxury goods (watches, jewelry...).

Although traditional shopping channels such as markets, supermarkets, grocery stores, and commercial centers are still popular, Vietnamese consumers are increasingly shopping online. According to a recent survey, up to 80% of Vietnamese consumers have ever shopped online, and  the most popular shopping items are fashion products, IT products and cosmetics (BCSI, 2020). Popular shopping channels in Vietnam include Shopee, Lazada, Tiki, Sendo, etc. In addition, online shopping via social networks such as Facebook, Messenger, Zalo... is also becoming more and more popular.

Source: "Business Handbook: Exploiting the EVFTA  to import and export goods between Vietnam and Germany" - Center for WTO and International Trade