For years now, I’ve been hearing that there is a growing middle class in Vietnam. So people are getting richer, but how will this affect Vietnam’s economy? Well, when you have more money, you’ll spend more, a lot more!
A recent study by Vietnam’s General Statistics Office shows that Vietnam’s retail sales growth outstripped GDP growth from 1997 to 2007. Over ten years, retail sales rose by 352% while GDP grew by 265%.
This is the kind of convincing evidence I’ve been looking for to show how important the middle class in Vietnam is to its future. Similarly for entrepreneurs, this new statistic proves that there is a large market to take advantage of and tremendous opportunities in Vietnam.
This large market is a potential for many industries:
-Insurance
-High-tech consumer products
-A tremendous need for an efficient public transportation (trains, buses)
Last summer, being in Vietnam, I saw many advertisement for saving & checking accounts of interest rate up to 18%. The trend to put money into bank accounts has started, even though still at a slow growth, but it’s steady. This savings will definitely help many entrepreneurs to start up businesses. However, the banking regulation is still strict, where only 30% of the bank stock can be owned by a foreign bank. Vietnam now needs to construct its legal infrastructures.
Also, a limited national infrastructure is slowing down growth, import and export capacity. There are lots of improvement in this area also!