Vietnam's middle class set to double by 2020

The middle and affluent class (MAC) in Vietnam is forecast to double in size between 2013 and 2020, from 12 million to 33 million consumers, local online VNExpress reported Tuesday, quoting a survey conducted recently by the Boston Consulting Group (BCG)'s Office in Vietnam. MAC consumers in Vietnam, whose income is from 15 million VND ( 710.9 U.S. dollars) and above a month, are not just growing in numbers, but also spreading in areas across the country, said the survey. About 80 percent of MAC consumers shop for groceries in hypermarkets or supermarkets at least occasionally. But traditional market and modern trade formats will continue to compete for customers for many years. These dueling channels will force companies to develop new skills to enable their products to develop in both channels. According to BCG Vietnam, with higher incomes, consumers tend to choose higher-value products, which open opportunities for high- end brands. The survey shows that by 2020, Vietnam's MAC population will be two-thirds the size of Thailand's MAC population. Average per capita income will rise from 1,400 U.S. dollars to 3,400 U.S. dollars a year. Along with their Myanmar counterparts, Vietnamese consumers were among the most optimistic in the world, even more than their counterparts in China, India, Indonesia and other fast-growing emerging markets, said the survey. More than 90 percent of consumers in Vietnam expect to live better than their parents and expect their children to live better than themselves. Despite short-term worries about the economy, the majority of polled consumers believe that the situation will be better and 80 percent of them said they want to make more purchases than they did the year before. The survey pointed out that Vietnamese consumers, of all incomes, enjoy the hunt for deals, discounts and promotions, more so than consumers in Thailand and Myanmar. In order to project the growth of consumers and their spending in Vietnam, BCG's Center for Consumer and Customer Insight analyzed population and income trends in nearly 1,400 areas and surveyed 2,000 urban consumers in the country. BCG, a global management consulting firm and advisor on business strategy, opened a new office in Vietnam's southern Ho Chi Minh (HCM) City late last year, its fifth office in Southeast Asia and 79th in the world.