Vietnam is a Southeast Asian country with a population of approximately 97 million people. The population is quite young, with over 35% of the population being under the age of 15. The life expectancy in Vietnam is 75 years. The majority of the population is ethnically Vietnamese (85%), with minorities including Chinese (5%), Khmer (3%), and Hmong (2%). The majority of the population practices Buddhism (61%), with smaller percentages practicing Catholicism (8%), Confucianism (1%), and Hinduism (<1%). The official language of Vietnam is Vietnamese, although English is also widely spoken.
The population density is 284 people per square kilometer, which ranks 46th in the world in terms of population density. The urban population comprises 36% of the total population. The capital city of Hanoi has a population of 7.6 million people, while the Ho Chi Minh City metropolitan area has a population of 13 million people. Other major cities include Hai Phong (2.8 million people), Can Tho (1.3 million people), Da Nang (1 million people), and Nha Trang (800,000 people).
Vietnam has a rapidly growing economy; according to World Bank data, Vietnam’s GDP has been growing at an average rate of 6.8% per year since 2010. This economic growth has led to an increase in personal income and consumer spending power. In 2018, Vietnam’s per capita GDP was $2,907 (in PPP terms), and it is expected to reach $5,473 by 2023. By 2025, it is estimated that there will be approximately 30 million middle-class consumers in Vietnam with disposable incomes earmarked for discretionary spending.
Businesses looking to enter the Vietnamese market should keep in mind that the purchasing power of consumers varies greatly by region. Urban areas like Ho Chi Minh City and Hanoi have higher incomes and spending power than rural areas. Additionally, there are significant differences in spending power between Vietnamese households at different income levels; for example, households in the highest 20% income bracket have an average monthly expenditure of $560, while households in the lowest 20% income bracket only have an average monthly expenditure of $90. As such, businesses need to segment their target markets carefully when selling products or services in Vietnam.
Vietnam has a large labor force; according to World Bank data from 2018, there are approximately 54 million people aged 15 years or older who are part of the labor force. The vast majority (76%) work in agriculture; other major sectors include manufacturing (12%), construction (4%), wholesale & retail trade (4%), and transportation & warehousing (3%). Compared to other Southeast Asian countries like Thailand and Indonesia, Vietnam has a relatively high proportion of its labor force working in agriculture. This is due to the fact that agriculture still accounts for a significant portion of Vietnam’s GDP (approximately 17%); as such, many workers still find employment in this sector despite rapid economic growth in recent years.
The composition of Vietnam’s workforce is also largely young; over 60% are under the age of 35 years old. Additionally, almost two-thirds (64%)of workers have completed secondary education or higher; this percentage is expected to increase over time as more young people enter the workforce with tertiary qualifications. For businesses looking to set up operations in Vietnam, this youthful and increasingly well-educated workforce provides an attractive source of cheap labor.
Vietnam is a rapidly growing economy with a large and youthful labor force. The purchasing power of consumers varies greatly by region but is overall on the rise thanks to strong economic growth in recent years. When considering doing business in Vietnam, businesses should keep these demographic trends in mind in order to make informed decisions about their target markets and pricing strategies.
The bottomline is while Vietnam is still considered to be developing, there are many opportunities for investment and trade within the country thanks to its large consumer base and commitment to economic reform.