Arriving in Vietnam in 2010, I was lured by the attraction that alas, here was a country with only a handful of department stores, no McDonalds, Starbucks or even a Zara. But in a short time things have changed.
Since the 1980s, we have witnessed Vietnam liberalize its economy. From the launch of doi moi (renovation), the lifting the US trade embargo, joining the World Trade Organization (WTO) and the 2015 Trans-Pacific Partnership (TPP), Vietnam has been on a path to increased development and improved globalization.
On the numbers alone, Vietnam’s population has grown from 66 million in 1990, to 91 million in 2016, making it the third most-populous country in Southeast Asia after Indonesia and the Philippines. Over the next two decades, it will be entering a demographic golden age.
Twenty-five per cent of the population will be aged between 10 and 24, the median age will be around 30, topped with the fastest-growing middle income and affluent class in Southeast Asia. The country that was once considered too challenging, immature and lacking appropriate investment policies to attract foreign retailers is no more the poor relation.
So what does this all mean for Vietnam, the nation of Asia’s youngest shoppers? Put simply, choice and more of it. From new retailers to new malls to house those retailers, it’s shop till you drop.
When I first arrived in Ho Chi Minh City, if I was looking for a jar of Nutella or even a box of Cornflakes, I would need to visit one of what I called the original three “dragon ladies” on Ham Nghi. But things have changed, and I would argue that it is for the better rather than worse.
Despite many of them making losses, foreign retailers are expanding their retail chains, and new brands originating from Vietnam’s neighbours are diving into Ho Chi Minh City and Hanoi’s retail property markets. That includes the Thais through Central Group; the South Koreans through Lotte and EMart, and the Japanese through Aeon Mall and Takashimaya plus Ho Chi Minh City’s latest shopping experience, Saigon Centre, from Singaporean investors. Rising disposable incomes are also bringing in big fashion brands such as Ga, Mango, Topshop and now Zara.
Time will tell if this young nation of shoppers will weather the shop-till-you-drop storm –but at least on paper, demographics and a more foreign-friendly investment environment will keep the nation holding on to the shopping basket for the time being.