Vietnam brightest emerging market of the 21st century

This will result in sustained and robust purchasing power growth that sees households enter the middle class and devices market for the first time, as well as expansion of the pool of 'global middle class' consumers in the major urban centres of Hanoi and Ho Chi Minh City. The core devices market scenario is positive, and Vietnam has an attractive risk profile for a frontier market.

The government is looking to expand the region’s economy by seven percent this year. The goal would be one of Vietnam’s highest growth rates yet and could be greater than China’s expected economic expansion in 2020.

The Vietnam-based financial services company SSI Research reported the goal on January third. The Vietnamese central government set a target for its Gross Domestic Product, or GDP, to increase 6.8 to seven percent. GDP represents the value of all goods and services produced within a country during one year.

Vietnam which for long was globally known as a place of conflict has emerged in the 21st century as one of the brightest emerging markets of the 21st century. Peace has brought with it an increase in economic prosperity which has increased the demand for industrial goods. Since the mid 1980’s, Vietnam has been relatively free of conflict which has fuelled growth in the sector.

Fast forward to 2015 and Vietnam has become one of the most attractive destinations in the world for Multinationals to set up a global manufacturing base. Low wages and relative ease of doing business has made Vietnam an attractive destination. Total foreign investment in Vietnam which was just $3 billion in 2006 has shot up to more than US$12.5 billion in 2015 and majority of the total foreign investment has been in the manufacturing sector.

The attractiveness of Vietnam has been pushed further upwards because of rising wages in China, which is the largest manufacturing hub in the world. The average minimum wage in 2014 in China stood at US$252 per month, whereas in Vietnam the average wages are less than half at US$124 per month. Also the location of Vietnam which is very convenient with respect to international trade plays a big role in ascertaining its status as one of the brightest manufacturing hubs of the 21st century.

Consumer electronics industry

Consumer electronics and apparel industry are one of the major sectors which are boosting the manufacturing sector growth in Vietnam. As the Vietnamese economy develops further, more growth will be seen in the heavy industries space also. Rising disposable incomes and economic prosperity will lead to more domestic investment, and then the full potential of the Vietnam will get realised.

Vietnam’s real GDP growth remains at a fairly high level, with inflation relatively low and steady. Higher disposable incomes in the population are helping improve living standards and allowing more consumers to explore global brands of consumer electronics and experience the very latest innovations and newest technologies.

As consumer electronics reaches maturity, players are having to make strong investments not only in research and development activities to cope with the needs of consumers, but also in advertising campaigns to boost sales. Maintaining a presence in this increasingly competitive market requires extensive understanding about the needs and trends of each income segment.