Luxury Market in Vietnam

Luxury Market in Vietnam
An emerging market in prospect
MBA PART TIME: LUXURY BRANDS MARKETING AND MANAGEMENT
ISC Paris
Session of 2010- 2011
Authored by: Hai Anh TO NGUYEN THI
Advised by: Mr Michel CHEVALIER
Table of Contents
I.
EXECUTIVE SUMMARY ................................................................................................................. 4
II.
INTRODUCTION ........................................................................................................................... 8
III.
WHERE IS VIETNAM LUXURY MARKET’S POSITION AMONG SOUTH EAST ASIA
COUNTRIES .............................................................................................................................................. 9
South East Asia markets overview .......................................................................................................... 9
A growing zone ..................................................................................................................................... 10
Luxury consumers of South East Asia countries .................................................................................. 10
Potentiality, Opportunities, Threats by market ..................................................................................... 12
1.
Indonesia: An economy in stabilizing stage ............................................................................... 12
2.
Malaysia: An attractive destination for luxuries ........................................................................ 13
3.
Singapore: Switzerland of Asia .................................................................................................. 14
4.
Thailand ...................................................................................................................................... 14
5.
Brunei ......................................................................................................................................... 15
6.
Vietnam ...................................................................................................................................... 16
Markets Mapping .................................................................................................................................. 17
IV.
VIETNAM LUXURY MARKET OVERVIEW ............................................................................. 1
Economic Overview ................................................................................................................................ 1
1.
High annual growth rate ............................................................................................................... 1
2.
An internationally open economy ................................................................................................ 2
3.
Increasing numbers of Private Enterprise .................................................................................... 4
4.
Foreign Direct Investment (FDI) is surging ................................................................................. 4
5.
Highest Inflation rate in Asia ....................................................................................................... 5
7.
Corruption .................................................................................................................................... 7
8.
Other Rankings ............................................................................................................................. 8
Demographic: .......................................................................................................................................... 9
1.
A young and active population..................................................................................................... 9
2.
Urbanization trend ...................................................................................................................... 10
SWOT Analysis of Vietnam Luxury Market ........................................................................................ 13
V.
IS VIETNAM A PROPRITARY / POTENTIAL MARKET? ...................................................... 14
Emergence of new wealthy class in sufficient number to constitute a sustainable market ................... 14
Consolidation of middle class (monthly income of more than US$ 435) and emergence of wealthy
class ................................................................................................................................................... 14
Emergence in demands for luxury goods: Establishment of a society of consumption and
effervescence of luxury market. ............................................................................................................ 15
1.
The fancy for luxury goods of young people ............................................................................. 16
2.
A new trend : The demand for more sophisticated products...................................................... 16
Vietnamese Luxury Consumers: ........................................................................................................... 17
Profile of Vietnamese luxury goods consumers : .............................................................................. 18
The conspicuous mode of consumption (or Status Consumption)........................................................ 19
VI.
HOW TO DEVELOP LUXURY MARKET IN VIETNAM ........................................................ 20
Luxury market outlook by sector .......................................................................................................... 20
1.
Cosmetics and Perfume .............................................................................................................. 20
2.
Prêt-a-porter, Lingerie ................................................................................................................ 23
3.
Leather and Accessories ............................................................................................................. 24
4.
Jewelry, Watch ........................................................................................................................... 25
5.
Home equipment and Real Estate .............................................................................................. 26
6.
Entertainment (Golf, Spa) .......................................................................................................... 26
Distribution............................................................................................................................................ 26
1.
General characteristics of luxury goods distribution in Vietnam ............................................... 26
2.
Chosing the right distribution system......................................................................................... 28
3.
Rapid development of distributors/ importers............................................................................ 29
4.
Insufficient commercial surfaces adapted for luxury distribution ............................................. 30
5.
Locations in Ho Chi Minh City and Hanoi for luxury retailing ................................................. 31
6.
Retail Market Updates for 2011 ................................................................................................. 35
7.
Renting price of a corner or a boutique ...................................................................................... 38
Marketing and Communication ............................................................................................................. 39
1.
Magazines................................................................................................................................... 39
2.
Advertising, Media ..................................................................................................................... 39
Constraints............................................................................................................................................. 40
VII.
1.
Counterfeit market...................................................................................................................... 40
2.
Uncompetitive price due to heavy taxes and tariffs ................................................................... 41
RECOMMENDATIONS ............................................................................................................... 41
Products: ................................................................................................................................................ 41
Place: ..................................................................................................................................................... 42
Promotions: ........................................................................................................................................... 42
VIII.
REFERENCES ........................................................................................................................... 43
 ................................................................................................................................................................. 45
I.
EXECUTIVE SUMMARY
In the first part of this paper, a comparison of Vietnamese luxury market has been carried out with
an overview
and consumption habits analysis of the South East Asia markets which are
geographically near to Vietnam. Today’s luxury landscape in Asia has changed significantly with
the emerging of new potentialities. Being the late comers behind the mature market such as Japan,
South Korea and China, South East Asian countries present promising opportunites for luxury
brands with the rapid economic growth.
Despite the low GDP per capita compared to other developed countries, the living standards in those
countries are improving dramatically with a client limited but elitist with different demand from
mature luxury markets to satisty. The studied countries in this report (Indonesia, Malaysia,
Singapore, Brunei, Thailand, and Vietnam), although being geographically closed, the markets are
different in term of maturity, culture, and customer behaviors. The dynamism of each market
differs depending on the stage of development. However, there is a clear evidence of long-term
potentiality for luxury in both local markets that need heavy initial investment but low payback, and
in travel retail zones.
Luxury consumers of South East Asia countries have always been avid for luxury goods and they are
having increasing disposed income to satisfy their needs. Regarding consumption habits, it is
common in those markets that the purchasing of luxuries is not only a lifestyle but more importantly,
is a way to demonstrate the social status. As the result, seeking for a conspicuous aspect still is an
undeniable stimulator in purchasing decision. What distinguishes Asian luxury customers from
Westerns’ is a different hierarchy of needs. The Western counterparts want to feel good about
themselves, hence, they seeks for brands whose products make them feel at ease and comfortable.
On the other hand, the highest need in Asian culture is status. Although some behaviors may
differ from one country to another, the status seeking is particularly important.
With a modern consumption trend, the consumers in emerging countries are becoming highly
selective. Higher price used to be allocated with higher quality but consumers are now spending
wiser with more requirements for specialty and uniqueness. They are also more knowledgeable with
all the information available for brand comparison, those affluent consumers are now demanding.
Among South East Asia countries, Vietnam luxury market is the newest. The pionner in the
region was Singapore. Being late compared to Hong Kong, Singapore discovered real luxury
consumption. International luxury brands penetrated the market since the 70s and most of the
important names have already implanted. Luxury in Malaysia made its first steps during the years of
1980 in the big commercial galleries in luxury hotels but the market took it real first motion at the
middle of the 1990s . Analysts believe that the Malaysian market presents a strong potentiality for
both local and tourist consumptions. Next was Thailand, the luxury market made it first steps during
the 1980s with the arrival of Louis Vuitton. the luxury market not only depends on the economic
growth but also the politic stability. the country often experiences politics crisis that causes the
slowdowns in luxury market over the whole country. The first luxury products appeared in Jakarta –
Indonesia in the early 1990s, when the development of the sector was very difficult due to products
from contraband market. Indonesia is a developing country where the population which is tempted
by the consumption is becoming more important. The luxury market of Brunei is still limited du to
the small population but the amount spent on luxuries are substantials. Even if some luxury brands
have entered the Vietnamese market since years but the real trend of luxury products consumption is
extremely recent, started from 2006. Since then, the luxury market enjoys outstanding development
with the introduction of numerous brands
The second part tempts to analayze different dimensions of luxury market in Vietnam based on its
economy development and demographic factors. Vietnam is the Asian country that is considered one
of the fastest growing economies in the world, after China and even greater than India. For the
period of 1998 - 2003, its average GDP has progressed around 6.8% and increased up to 8% during
2004-2007 with slight slowing from 2008 to now.
From 1986, the Vietnamese economy benefices from a new politic of “Doi Moi” (Renewal), leading
to continuous movements of opening and liberation. This allowed the country to integrate
progressively to international exchanges and to develop an economy sorely internationalized degree
of openness of 168% in 2007. After joining WTO, powerful economic development and improved
standards of living have changed the consumption trend among Vietnamese people. Numerous of
luxury brands that could not enter to the market just some years ago due to the lack of adequate
distribution channels are now available in the market, offering the consumers with larger product
choices. The embrace of private enterprise increase favor the apparition of many entrepreneurs,
benefit from the rapid growth of the country to become nouveaux riches. Similar to China,
investment is crucial for driving the economic growth performance. Foreign Direct Investment
poured into Vietnam is not as high as China but higher in most of other neighboring countries.
However, the country is facing an accelerating inflation has forced the government to apply
tightened monetary policy that causes difficulties to businesses. After joining WTO, the Vietnamese
government has significantly decreased the imported custom tariff for many product categories.
However, the barrier of entry for luxury goods into the Vietnam market is still very high. Besides,
the Ministry of Industry and Trade activated on the 16 May 2011 new restrictions on the import of
certain luxury goods. The high level of custom duty, especially for luxury goods, continues to favor
the development of contraband with neighbor countries of Vietnam
From a demographic point of view, the luxury potentiality in Vietnam relies on a very young
population with a median age of just 25. The young society is promising for a long-term investment
as people are open to change and often quite entrepreneurially minded. The high percentage of
young consumers would be a critical factor helping Vietnam to stand out among emerging retail
market, including China, India, or Russia. Vietnamese consumers can have greater access to
international brands information research thanks to its openness to foreign influence and good
English proficiency, and are more receptive to foreign brands’ communications messages. The
enrichment of the country benefits firstly the citizens and the high-income groups. A clear
urbanization trend is noticed with an increasing apparition of wealthy class in major cities who are
the main consumers for luxuries.
In 2010, Vietnam has imported $5.7 billion of luxury goods, illustrating an emergence in demands
for luxury goods and. The penetration of foreign brands into the Vietnamese market is relatively
recent and making a fast-developed market. Nouveaux riches are showing their desire to expose
their new social status with demand for more sophisticated products: the qualification of luxuries is
no longer based only on price.
Vietnamese consumers, particularly those who belong to middle and upper classes, are modifying
their habits. Their profile can be described as well educated, updated to the technology, prudent
and respectful to the traditional, optimistic, and festive. Promising opportunities for foreign
companies are clearly shown offering luxury products to Vietnamese market since high level of
Status Consumption is displayed
The third part concentrates on the question for foreign brands of how to successfully enter market by
using proper distribution channels and communication strategies. An outlook of market by sector
gives a general understanding of the current development state of different sectors in Vietnam. The
cosmetics sector in Vietnam is still developing and the main difficulty of luxury cosmetics brands
in Vietnam is the competition of a wide range of uncontrolled fake, mislabeled, and smuggled
products. The demands for luxury reade-to-wear used to be very limited in Vietnam. Thanks to
the development of adapted commercial surface, as well as the apparition of leisure activities (clubs,
bars, opera…) consumers started to spend more for luxury clothes. Leather sector is in full
expansion with numerous distributors who chose to invest for luxury accessories However, shoes
market stay undevelloped for both males and females. The vietnamese jewelry is still remain very
traditional in both fabrication and design. Luxury home decoration sector in Vietnam face a real
concurrence with local brands.
There is an actual revolution of distribution in Vietnam. The distribution sector started to be
completely open to foreign investors, who can own 100% capital of their boutique, or any
distribution structure. , logistic is certainly one of the most delicate problem in Vietnam, notably in
land transportation. From 2006, the acceleration of luxury brands’ implantation to Vietnam is
clearly seen. The retailing sector is going through a period with tremendous changes with the
apparition of a luxury market. Most of foreign brands choose to firstly enter the market via a local
distributor or importers. The number of enterprises active in the luxury sectors has been increased
considerably in the period of 2005-2006, notably in the fashion-related fields.
There is a lack of adapted commercial surface for luxury distribution. The Vietnamese real estate
market is actually characterized by a profound shortage of offerings, the undertaken of numerous
construction site and the extremely high prices. Prime retail rents in Vietnam is quite high compared
to South East Asia neighbours, even higher than Malina and Bangkok. According to the international
real estate service provider Savills Vietnam, the high rent in the city center is a big challenge for
current and future retailers.
Luxury brands have a large choice of communication means to to communicate their brand images.
Nowardays, the apparition of Vietnamese version of internation high-end fashion magazines such as
Elle, Harper’s Bazaar and other lifestyle magazines such as Cosmopolitan, Her World have greatly
improve the dynamism of communication channels. Used to be practically inexistent at the early
1990s in Vietnam advertising means are also more diversified, covering all the Media types,
including television, radio, press, displays, and Internet. Only some weaknesses still exist in urban
displays, which is still low-structured.
Finally, the two main constraints of the luxury market in Vietnam were counterfeit products and
uncompetitive price due to heavy tariffs and taxes.
II.
INTRODUCTION
Vietnam has experienced a tormented history, with war and territorial conflicts – some remain unsolved,
like the recent conflicts about South East Asia Sea with China. However, the extraordinary dynamism of
the country is again writing a history.
This country is well known about its beautiful landscapes, the historical monuments dated from the
imperial periods, and the architecture inherited from French colonization. But nowadays, Vietnam
distinguishes itself by one of the country having the fastest economy growth rate after China and even
greater than India. And the luxury market, as a result benefit from a strong growing demands with the
expanding of population who has high disposal income.
According to CPP Luxury Industry Management Consultants, Vietnam is among the fastest growing
luxury markets worldwide. Vietnam has become a country of records: record of young population (50%
of the population are under 22 years old), and most importantly, the record of the growth rate with the
GDP of more than +7.5% over the last decade. Also, the FDI (Foreign Direct Investment) is in
exponential increase (14 billion Euros in 2007) and the exportation rate is (+22.6% in 2007) (Ubifrance,
2010)
This is clearly a tangible sign, not only from a voluntary of a nation to come out of the poverty, but also
a political voluntary affirmed the integration to the world’s development. In a country where just 20
years ago, people still walked on flip-flops cut from old tires, a Gucci beach sandals of $365 can come
as a shock. Displays of wealth used to be frowned in Vietnam when the government wanted to take the
assets of the wealthy to redistribute to the poor. Since the late 1980s with the introduction of free
market, foreign investors started to come to Vietnam bringing with them a Western styles and attitudes,
making a growing market in every sector, including luxury goods. How can Louis Vuitton market a
$3,500 handbag in a nation where the annual per capita income is just over $800? This paper is going to
analyze the luxury market in Vietnam in details by considering different dimensions in order to evaluate
whether promising opportunities and forsesable prospect are truly present in the market.
III. WHERE IS VIETNAM LUXURY MARKET’S POSITION
AMONG SOUTH EAST ASIA COUNTRIES
South East Asia markets overview
Consumers in Asia have always been avid to luxury
goods. In early years, it was the image of Tokyo’s
Ginza district, Hong Kong’s Causeway bay or
Singapore’s
Orchard
Road.
Today’s
luxury
landscape in Asia has changed dramatically, with
the development of new emerging paradises. Being
left behind for a long time with the success of
luxury markets in Japan, South Korea, China, and
India, the South East Asia countries evoke
nowadays-strong
countries
studied
desire
in
for
this
luxuries.
report
If
the
(Indonesia,
Malaysia, Singapore, Brunei, Thailand and Vietnam) cannot compare with the two giant emerging Asian
markets China and India in term of market size, those countries however, offer interesting opportunities
for luxury products. Although the market is not as mature as some countries to the others, the growth
rates are significant, giving the opportunities to grasp in all the countries in the area. China is not the
only country enjoying rapid economic growth: The World Bank raised its 2010 growth forecast for the
South East Asia countries by from 7.3% to 8.9% from 2009, showing a strong potentiality of the market.

An area with more than 400 million of inhabitants and a luxury market estimated of one billion euros
(2007).

Although being geographically closed, the studied countries’ markets are different in market
maturity, culture, and customer behaviors. The dynamism of each market differs depending on the
stage of development.

The luxury markets are currently concentrated to only the capitals: Kuala Lumpur, Jakarta,
Singapore, and Bangkok. Exceptionally, in Vietnam with two big cities, whereas Ho Chi Minh City
being the commercial center enjoys a greater market development and opportunity compared to the
capital – administrative center.

According to professional in the sector, Malaysia and Vietnam would represent the most important
growth rate for luxury products in the next five years (Ubifrance, 2007).
A growing zone
There is an important potentiality in South East Asia countries. Despite a low GDP per capita, which is
increasing dramatically, the market is potential with a targeted customer more limited, elitist and with
different demands from mature markets. This market would clearly offer a long-term potentiality in both
local market that need heavy initial investment but low payback, and in travel retail zones.
Indonesia
Malaysia
Singapore
Brunei
GDP per capita 2010
4,394
14,670
56,522
GDP projected for 2016
8,295
19,886
GDP Growth rate 2010
4.5
Income share held by highest 10% (2007)
29%
Philippine
Thailand
Vietnam
48,892 3,737
9,187
3,134
65,953
51,108 4,852
14,657
7,817
-1.7
-1.3
-1.79
1.1
3.7
5.3
38%
33%
34.2%
34%
30%
10
8
Vietnam
6
Singapore
Brunei
4
Thailand
2
Malaysia
Indonesia
0
2004
2005
2006
2007
2008
2009
2010
Philippine
-2
Growth rate
-4
Luxury consumers of South East Asia countries

The consumers are the more and more disposed to purchase luxury goods

They are largely sensible to luxury by the numerous marketing and advertising campaigns, the
word-of-mouth plays also a fundamental role. It is essential for consumers to be the firsts to
purchase one product, or to have the minimum of what their entourage has.

The high-income habitats travel the more and more and purchase luxury goods in other countries.
There are in-Asia travels to do shopping in Thailand and Singapore, and out-Asia travels to shop in
Western countries.

Consumption of luxuries is not only a lifestyle but more importantly, is a way to distinguish
themselves with others, and to create a countenance. Also, seeking for a conspicuous aspect still is
an undeniable stimulator in purchasing decision.

The female consumers stay the most powerful with the increasing purchasing power. It is important
to note that the potentiality in customers who are wife of wealthy men who are willing to spend
considerable amount.

The idea pre-established of the country of origin are still being printed in consumers’ mind, even
the most informed and experienced ones. The quality is generally associated with the country of
origin more than the brand name itself: watches from Switzerland, leather goods from Italy, cars
from Germany and perfumes from France.
According to Oliver Petcu, the Director at CPP Luxury Industry Management Consultants (LCC), the
consumers in emerging markets are becoming increasingly selective in how they allocate their spending
budgets. They spend less and are highly aware of the price/quality ratio. As luxury goods show the
status of Asians consumers, they would be more careful and picky. There is an increased awareness of
raw materials, standard of processing. They are also more knowledgeable with all the information
available for brand comparison, those affluent consumers are now demanding. Gone are the days of
people bulk buying luxury items, the brand names of which they could barely pronounce. Instead, Asia
is entering an era of unparalleled product and brand awareness
A passion for luxury
Today’s affluent consumers in South East Asia countries are already avid brand loyalists, with little
difference from their counterparts in Western countries or North America. They connect to the media
24 hours a day, travel frequently; thus, they are well informed and opened to sample what is new and
different. They always symbolize Western brands with quality, even though some of them are largely
manufactured in Asia. They would cheerfully pay a premium to demonstrate, through beautifully
designed packaging, that their purchases were made in a leading department store in the city instead of a
normal store where they could have bought exactly the same items at a considerable savings.
Differences from Western customers:
What distinguishes Asian luxury customers from Westerns’ is a different hierarchy of needs. The
Western counterparts want to feel good about themselves, hence, they seeks for brands whose products
make them feel at ease and comfortable. They would rather choose Range Roger SUV (Sport Utility
Vehicles) over a Lamborghini Reventon even though they have the ability to purchase.
On the other hand, the highest need in Asian culture is status. Although some behaviors may differ from
one country to another, the status seeking is particularly important in all Asian countries, including
South East Asia. The brands like Hermes, Johnnie Walker, or Hennessy are extraordinarily popular in
Asia for both personal purchases and gift purchases for others.
Asians pay extreme care when buying gifts for their friends, colleagues, or business partners. Choosing a
luxury brand not only shows the wealth of the giver, but also expresses a respect and appreciation
toward the receiver. They may even be willing to pay more for a gift then a personal purchase, which is
not the case in western countries.
One might argue with the democratization, luxuries are more affordable as consumers are becoming
more accustomed to higher standard of living, and status seeking will diminish in importance for Asians.
In countries like Japan and Korea, which has been developed for decades, the luxury markets just
exhibits a greater degree of sophistication facing the democratization trend. The same would be applied
for the future of South East Asia countries, leading by Singapore.
The emergence of Shopping Tourism
Few decades ago, it was quite preposterous that people travel around the world just for shopping
purpose. The Japanese changed it all. They are the pioneer who, with their high level of disposable
income, started looking for finer things in life oversea. The rest of the world soon adopted this trend as
a social behavior, and a new retail industry was soon born to cater to the special requirements for the
shopping tourist.
Asian customers want to find a very special luxury items, or a limited-edition bag for their status
boosting, which is not available in their countries. Another reason with shopping oversea is to avoid fake
products that lure the unsuspecting buyers at home, as consumers are becoming more and more vigilant.
Numerous transactions on the Champs Elysees or Fifth Avenue have been recorded with a South-East
Asia banks. Shopping tourism, appeared primarily as a phenomenon in Japan, Korea, and China, and
quick became a normal treats that South East Asians gave themselves with the dramatic economy
growth rate.
Potentiality, Opportunities, Threats by market
1. Indonesia: An economy in stabilizing stage

Capital: Jakarta

Politics System: Democratic Republic

Geography: 2 017 000 km2 with 13 677 islands.

Population: 4,553,009 (2010) 3% of the population speaks Chinese, representing the most prospect
group of the country, constituting the important engine for the economy

Economy: The macroeconomic stabilization of the country is proven by the growth rate in 2007
exceed 5% for the 4th consecutive year. The government seems to control the inflation rate around
6%.

GDP per capita was $1,640 USD and the purchasing power was $ 4,323 USD/ capita
The market is difficult to conquer but there is a real potentiality to grasp. The first luxury products
appeared in Jakarta in the early 1990s, when the development of the sector was very difficult due to
products from contraband market. In Indonesia, Jakarta is the capital for luxury industries. People from
other cities and regions who wish to offer themselves a luxury treat would come to Jakarta or would
purchase from oversea. Thus, the best location for luxury selling is in the South Center of Jakarta. Being
geographically near to Singapore together with the customers’ preference of buying luxury from travel,
the brands implanted locally should remain competitive in order to attract Indonesians to the domestic
market.
From the beginning of 2000, the commercial centers developed noticeably, and more luxurious.
Indonesia is a developing country where the population which is tempted by the consumption is
becoming more important.
2. Malaysia: An attractive destination for luxuries

Capital : Kuka Lumpur

Politic system: Constitutional Monarchy

Geography: 329 758 km2 with 2 distinct regions : Occidental Malaysia (South of Thailand) and
Oriental Malaysia (North of Indonesia)

Population: 26,3 millions (2007) with 3 ethnic groups. Group of Malaysian origine are principally
muslim, are present in the administration and important publics enterprises. The minority of Chinese
people play a economical role who controls a large part of the commerce and industry, especially
Small and Medium Enterprises. The minority of Chinese people are workersin agriculture and
industrial sectors. Immigrating people usually came from Indonesia

Economy : The dynamism of the country is still being dependent on foreign investments. Despite a
dramatic decline after the Asian crisis 1997, FDI continue to plays an important roles and foreigncapital enterprises ensure the essential of exportations of manufactured products.
Very traditionalist, Malaysia is opening the more and more to international comers.The market shows
potentiality for both local customers and tourists. Luxury in Malaysia made its first steps during the
years of 1980 in the big commercial galleries in luxury hotels but the market took it real first motion at
the middle of the 1990s, with notably the opening of the commercial center Starhill even if the sales
dropped after the Asian economic crisis by 1997. If secondary cities of Malaysia are favorable for
products of mass consumption, luxury resides principally resides in Kuala Lumpur.
There is no fabrication of luxury goods in the country except some local names such as pewter items of
Royal Selangor, bags made by crocodile skin of Porosus some creations of designers Bonia or Ikartini.
The luxury market centers at the accessories such as leather items, jewelry, watch
Analysts believe that the market presents a strong potentiality for both local and tourist consumptions.
The market for tourists is nourished by the frequentation of people from the Middle East. One of the
main strength of the country is the detention of operational infrastructure
3. Singapore: Switzerland of Asia

Since its independence on 1965, the country enjoys an exceptional succes: An average growth rate of
8% per yer and the standars of living have reached the same of developped and modern countries

Capital: Singapore

Politic System: Ancient britan colony, the democratics system remain very strict in some extents,
notably the freedom of press which is still strictly controlled.

Geography: A strategic position of South East Asia , 699,4 km2

Population: In the last 30 years, Singaporean population has been more than doubled up, from 2
millions to 4,5 millions people with 76% Chineses, 14% Malaysians, and 9% Indians.

Economic: The country benefits of a prosper economy with a stable legal framework. The economy
has notably resisted the crisis of Asia. Financial situation remains excellent and leads the country to
become an important investor, all by continuing to carry out an open and attractive politic, focused
on added-value activities.
Being late compared to Hong Kong, Singapore discovered real luxury consumption. International luxury
brands penetrated the market since the 70s and most of the important names have already implanted.
This small but nearly mature market plays the role of the regional capital of shopping despite the
concurrence of Malaysia and Thailand. Conscious of the small market size, the Tourist Office of
Singapore has applied a politic to attract wealthy tourist to increase the revenues for the island.
4. Thailand

Capital: Bangkok

Politcal system: constitutional monarchy since 1932 with a lot of temporary unstability that
slowdowns the consumption in many sectors

Geography: 513 115 km2, the country benefit from a location at the heart of South East Asia

Population: 65.1 million. On the contrary with other Asian countries, chinese immigrants have well
integrated to the Thai population. Sino-Thai people who came from industrial conglomerates play an
imporant role in the country’s economy. Around 80% of the big groups are controlled by the
families of origin Chines and it is estimated that 19/20 of the wealthiest families of the country are
sino-thais.

Economy: the asian country the most affected by the financial crisis of 1997, the country has
profoundly restructured its economy and has successfully overcame the crisis to be one of the
outstanding emerging countries with a growth rate of more than 6% in the period of 2002-2004.
Even during the hard period of 2005 when the country has to face both internal and external
difficulties (increasing essence costs, slowdown of growth of its partners, movements in the South,
tsunami and opposing climat conditions…), the growth rate still scored 4.5%
The luxury market made it first steps during the 1980s with the arrival of Louis Vuitton which possesses
nowarday 3 stores in Bangkok. The economic growth of Thailand is accompanied by the occidental and
japanese influences on the way of living and consumption habit. Thai consumers, especially young
people are very sensible to trends. Luxury items, reflection of their social status, enjoyed a formidable
success in country. In the other hands, the is also the influences on buyer behaviors from provinces
where prices remains the first criteria for purchasing decision
In Thailand, the luxury market is concentrated in Banglok, as the consequence, it is almost unesscarry
for brands to open additional stores outside the capitals. In fact, wealthy inhabitats of Phuket or Chiang
Mai are willing to travel to shop in Bangkok. The development of Pattaya and Phuket is attracting a lot
of “pharang” (westerners) and it is risky to bet on the prospect of luxury markets in those cities
As Thai people love to expose their social status, the introduction of a well-known brand is the clef to
succcess but foreign brands have to face strong concurrence from local brands. However, the luxury
market not only depends on the economic growth but also the politic stability. The country often
experiences politics crisis that causes the slowdowns in luxury market over the whole country.
5. Brunei

Capital: Bandar Seri Begawan

Geography: 5 765km2, situated in island of Borneo, Brunei shares same frontier with Malaysia

Population: 365 251, Malaysian 67%, Chinese 15%, Others 18% (3 500 Gurkhas)
Former Britain protectorate independent since 1984, Brunei is a domineering monarchy, run by the
Sultan Hassanal Bolkiah. Economy of the country relies in its richness of hydrocarbon. Per capita
income is the highest in ASEAN after Singapore.
Having endured the financial crisis in Asia in 1997, Brunei subsequently suffered the failure of Amadeo
group, controlled by Prince Jefri (brother of Sultan, then minister of finance and president of agency in
charge of reserves management of state, the Brunei Investment Agency), which has strongly contributed
in sinking the economy during recession. After long procrastination, the government has announced, in
2001, an ambitious program of reform economic structures, in order to reduce its dependence in its
petroleum resources, but few of concrete progress has been effectively achieved.
Economic evolution depends strictly in the performance of hydrocarbon sector. Ongoing delicate
negociations with the Malaysia which demand an agreement in sharing the petroleum recipes. The ball
is in Brunei’s camp, which presents itself as not very pugnacious, even when the future of economic is at
stake. The Sultant is also the 4th biggest liquid gas producing company in the world. The State is actively
involved in every stage of petroleum field through BRUNEI PETROLEUM who regulates the sector
and manage Sultanat assets. The company is also shareholder in parity with SHELL in BRUNEI SHELL
PETROLEUM (BSP), 1st producer.
The luxury market of Brunei is still limited du to the small population but the amount spent on luxuries
are substantials. The royal family is the most important consumers of luxury products in the country. It
is estimated that around 2000 people purchase regularly
6. Vietnam

Capital: Hanoi

Political system: Vietnamese Communist party is the leading force of State and society.

Geography: with a surface of 331 690 km2, Vietnam shares frontiers with China, Laos and
Cambodia.

Demography: Vietnam counts 87 million people (2010) which of half are under 25 year sold. The
demographic growth is at 1,33% per year, represents an slight increase of population of more than
one million of people each year. In Ho Chi Minh City, the 15-49 year old represents 68% of the
population at below 15 year old, 24%. Vietnam learned a vast movement of rural depopulation.
While in 2006, less than 30% of the population lives in the urban aread, this proportion reached 45%
today

Economy: the country continue to constitute an examplary case of mastery development. Five-years
plans encourage an average growth rate of more than 7% since the 1990s. The growth rate is assured
by the exceptional foreign trade with high exportation growth rate and the country stays at the center
of foreign investments. Vietnam is the asian country that enjoys the highest economic growth rate
just after China. The vietnamese economy is in developing phrase, which can explain the
spectaculary growth rate.

Wealth repartition is very inequal, especially between rural and urban areas with the concentration of
wealth in Ho Chi Minh City and Hanoi.
Even if some luxury brands have entered the market since years but the real trend of luxury products
consumption is extremely recent, started from 2006. Since then, the luxury market enjoys outstanding
development with the introduction of numerous brands. The fashion accessories have been in vogue
since the beginning of 2000s and continue to experience higher demands.
The vietnamese qualification for luxury brands used to be almost exclusively based on price, the new
consumption habits of modern customers now start with new notions of quality, uniqueness and
originality. The potential market is at the present desired by many international brands and there are
limited chances for them to conquer.
The adhesion of the country to WTO in 2007 was an important encouragement for luxury brands to
penetrate to the market. Also, stock-exchange market has high impact on the luxury sector.
Professionals of the sector believe that Vietnam represents amonng the 3-4 big asian market for luxury
consumption, which create an enormous potentialy
Markets
Mapping
0
Opportunities
South
Threats
- Distribution channels of luxury products
- Markets highly concentrated in capital cities
East Asia
are developing with the apparition of
- Important counterfeit market
Market
luxury commercial centers
- Strong
- A population that travel more and more,
international
concurrence
(China,
India…)
thus being exposed to foreign brands and
- Bargaining is a regional habit
fashions
- Lack of distinct seasons (always hot and humid
- Dynamic market with great perspectives
weather of equatorial climate): Brands have to
adjust their collections
Indonesia
- Stable economic and politic system
- Reducing
- Consumers passionate for luxuries, a
number
of
luxury
importers:
Difficult for brands and exporters to find a
local partner with adequate objectives
noticeable sensibility to brands.
- High level of corruption, lack of transparency
- Indonesians prefers to buy luxuries from
oversea
Malaysia
-Increasing tourists from Middle East and -Despite its politic of positive discrimination, the
Russia with high purchasing power
-
Development
of
country is one of the non-egalitarian in Asia
distribution
infrastructures
Singapore -No customs duty
- Low availability of new commercial sites
-An economy highly opened to outside
-Affluent customers but difficult to develop
-Consumers very Occidentalized
loyalty
-Mature market playing excellent showcase role for Asia
Brunei
Thailand
-Restrained number of luxury customers -A small market essentially dedicated to the
but are willing to spend a lot
royal family
-Market developing and becoming mature
-Unstable politic system, affecting economics.
-A
modern
airport
with
favorable
environment for luxury sales.
Vietnam
-Recent adhesion to OCM proving a -A lack of infrastructure adapted to the luxury
voluntary of open to outside markets and products distribution
110
foreign brands.
-New
-High corruption level
luxury
consumers
with
strong -Market lusts after and strongly linked to stock
increase of the high-income class in the market
population
-Foreseeable
multiplication
of
luxury
brands under impulse of big leader brands.
IV. VIETNAM LUXURY MARKET OVERVIEW
Economic Overview
1. High annual growth rate
Vietnam is the Asian country that is considered one of the fastest growing economies in the world, after
China and even greater than India. For the period of 1998 - 2003, its average GDP has progressed
around 6.8% and increased up to 8% during 2004-2007 with slight slowing from 2008 to now. Even at
the difficult time within Asian financial crisis (1997), the growth rate has maintained positive (+3.5% by
1998). Vietnam continued to perform well during the world economic crisis 2009 with the GDP growth
rate of 5.3%
GDP per capita – Purchasing power parity (PPP) is an indicator of the economy’s efficiency, showing
how the citizens would benefit from their country’s increased economic production. A raising trend of
GDP per capita signifies the national economic growth, and the increasing of purchasing power of the
population as the standard of living is improving.
1
The outstanding economic growth of
Vietnam has allowed a strong decrease
in poverty: 14.75% of the population
was living under poverty in 2007, as
opposed to 28% in 1993. The reforms
have succeeded in the improvement of
the
standard
of
living
of
the
inhabitants. The GDP per capita went from USD $220 in 1994 to more than USD $1,200 today. The
percentage of the population living on less than a dollar per day has declined in a significant way and it
is now lower than China, India, or the Philippines.
The continuous trend of high growth rate illustrate an economy with gradual development and highly
potential. Vietnamese consumers can be very optimistic about the country’s future.
The same growth league as India and China
As mentioned earlier, Vietnam’s growth rate averaging 7.4% for the period 2000-2006, compared to
China’s 9.5% and India’s 6.7%. On the other hand, GDP per capita of Vietnam by 2006 ($715) is close
to India’s ($765) and less than haft of China. It means, Vietnam is as poor as India but is growing at
almost the same speed as China.
According
to
Research
which
Deutsch
Bank
forecasts
GDP
growth of more than 30 emerging
countries until 2020, Vietnam is
likely to growth as quick as India
and China in the next 15 years.
Hence, in 2010, Vietnam’s GDP will
reach the same level as China’s
today.
2. An internationally open economy
Liberalization of the economy
From 1986, the Vietnamese economy benefices from a new politic of “Doi Moi” (Renewal), leading to
continuous movements of opening and liberation. This allowed the country to integrate progressively to
2
international exchanges and to develop an economy sorely internationalized degree of openness of 168%
in 2007.
Joined trading organizations:
In addition, Vietnam is one of the Asian economies most open to international trade, which represents
more than 100% of the GDP, more than twice the Chinese rate and more than 4 times the Indian
rate. The country has demonstrated its strong commitment to trade liberalization in the recent years:
-
Association of Southeast Asian Nation (ASEAN – 1995) with the Free Trade Agreement (FTAs) ,
which helped elevate the economy status drastically
-
Asia-Pacific Economic Cooperation Forum (APEC – 1998)
-
US-Vietnam Bilateral Trade Agreement (2001) : exports rose 900% from 2001-2007
-
Vietnam also has a corporation agreement with the EU.
-
Adhesion to WTO (World Trade Organization - 2006) has significantly changed the economy
landscape, making an opened Vietnamese market to most of economic sectors.
-
After January 1, 2009, Vietnam has wholly opened its retails market under the WTO commitments,
bringing new signs of optimism about the future of the retail sector
Vietnamese trade is characterized by a strong geographic inequality: the country shows a trade surplus
with western countries and a growing deficit with its Asian neighbor
Economic expansion and the opening policy of the country leaded to a strong dynamism of foreign
trade.
The exportation revenue was $71.6 billion in 2010 (+25.5% from 2009). However, the
importation rate, generated mostly by the private sectors and foreign enterprises, has exceeded export
with the turnover of $84 billion, causing a deficit in commercial balance of $12.4 billion. This figure is
causing a risk of stabilizing the Viet Nam Dong, making the government to take recent measurement
which makes it difficult to import luxury goods to the country. This problem with be discussed later in
the next sections.
The change in consumption habits
After joining WTO, powerful economic development and improved standards of living have changed
the consumption trend among Vietnamese people.

Modern shopping habits (at supermarkets, shopping malls, Internet) increased from 9% in 2005
to 14% in 2007 and were expected to reach 24% in 2010.

Increasing shopping value with higher spending on tourism, health and body cares in both men
and women
3

Increasing number of young consumers and high-income people promotes the development of
high-class retail shops.
The changes in consumption habits has led to a dynamic trend of the Vietnamese retail market : the
cooperation of local retailers to enforce professionalism, build up long-term development strategies to be
able to compete with the foreign comers, making the market turbulent more than ever. Numerous of
luxury brands that could not enter to the market just some years ago due to the lack of adequate
distribution channels are now available in the market, offering the consumers with larger product
choices.
3. Increasing numbers of Private Enterprise
The reforms allowed a large privatization of Vietnamese economy: the number of 100% State-owned
enterprises has decreased from 12 000 (1990) to 2 400 (2006) whereas the private firms increased to
more than 90 000. The embrace of private enterprise increase favor the apparition of many
entrepreneurs, benefit from the rapid growth of the country to become nouveaux riches.
4. Foreign Direct Investment (FDI) is surging
Similar to China, investment is crucial for driving the economic growth performance. FDI poured into
Vietnam is not as high as China but higher in most of other neighboring countries. FDI was relatively
tiny at the beginning of the 1990s and even 2000s. The average annual foreign investment commitment
has risen sharply since
foreign
investment
authorized
although
was
in
1988,
the
global
economic crisis affected
FDI in 2009.
Early investors
claimed
that the main obstacles to
set up shops in Vietnam
were a missing supplier
base and the high operating
costs.
Thanks
to
the
continuous improvement of
infrastructure,
4
the
costs
have come down quite significantly
5. Highest Inflation rate in Asia
Benefiting from a high growth rate, the Vietnamese economy is facing an accelerating inflation, driven
by surging food and oil prices. This is a common trend across Asia countries and the governments
realize that inflation would not go away quickly. Actions are being taken to curb inflation and to deal
with the threats to economic growth.
Inflation rate has reached a peak with an index of price of consumption of 27%, which is clearly higher
than the growth rate, causing by:
-
The politic of the government to keep the VND low to encourage export
-
The important inflow of foreign currencies due to FDI and transfers
-
Global conjuncture and the general tension inflationist (increasing price of raw materials, petrol
and alimentation…)
The continuous increase in inflation rate has forced the government to take some recent measurement.
However, during this very hard time, the consumption power of the high-income class seemed not to be
really affected. Quarter 1 of 2011 saw the Vietnamese Government shift focus from a growth enhanced
policy to an inflationary control policy (CBRE, 2011) when the inflation rate reached the highest at
12.8% by applying the tightened monetary policy.
6. High Tariff and Taxes for luxury products
After joining WTO, the Vietnamese government has significantly decreased the imported custom tariff
for many product categories. However, the barrier of entry for luxury goods into the Vietnam market is
still very high.
5
Tariffs rate applied for luxury goods imported into Vietnam can be divided into 4 categories, depending
to the source country and its relationship with Vietnam.
-
Privilege import tariff : From countries that have Most Favored Nation (MFN) status with
Vietnam
-
Special privilege import tariff: From ASEAN countries
-
General Tariff : All other non-MFN countries – 50% higher
Import Tariff
Taxes
Special
Consumption
Taxes
-
VAT
Perfume
-
30%
Cosmetics:
Lips Make-up
Eyes Make-up
Nails polish
Powder
Skin and face creams
Anti-acne cream
Before and after-shaves
Deodorant
Shower gels/lotions
Hair cares, shampoo
Others
-
36%
28%
22%
28%
20%
10%
27%
24%
24%
20-23%
24%
-
15%
20%
30%
18 – 30%
30%
5-20%
10-30%
-
52 – 57%
51 %
25%
20- 70%
10%
-
77 – 82%
25 – 80%
10%
Clothes, Accessories
Lingerie
Ready-to- wear
Leather goods
Watches
Jewelry
Eye wear
Pen
Wine and Spirits
Wine
Liquors
Cars
10%
10%
10%
Special Consumption Taxes:
To control the high inflation rate and trade deficit, the Ministry of Industry and Trade activated on the
16 May 2011 new restrictions on the import of certain luxury goods including for cars, mobile phones,
cosmetics, spirits and wines, applicable for the period of 2011 - 2020. Those precuts still have been
flocking to Vietnam in big quantities despite the effort of the ministry to curb the trade deficit.
6
According to the Ministry, in the first quarter of 2011, the total trade deficit value amounted to more
than 3 billion dollars, of which luxuries accounted for nearly 40%.
Officials believe their controls will curb the trade deficit at less than 18% in 2011 (Howarthdtl, 2011)
and protect the consumers from poor quality and counterfeit imports. An expert from Trade Research
Institute explained that Vietnamese consumers usually follow the crowd when making purchases
decision. A large portion of people who spent for luxury goods are not high-income earners. Therefore,
this tax increase will considerably restrict the demand for some luxury goods.
However, business owners and diplomats claimed that these attempts to restrict import might be a
violation of international trade rules. Being an export-dependent country, Vietnam is trying to negotiate
a free-trade agreement with the European Union and US. This restriction is obviously a barrier for
luxury goods from Europe and US to enter the Vietnam market, making life very difficult for business
owners. The EU wrote to Mr. Vu Huy Hoang trade minister of Vietnam, warning that the restriction
will “cause considerable disruption in our export patterns and major trade losses for EU exporters of
these products representing millions of Euros in value”. EU wants a 3-months suspension and remind
that this restriction “raises serious concern” about the Vietnam’s desire to apply WTO commitments and
is “at odds with our common wish to engage in a free-trade agreement”
According to Mr. Dinh Anh, a well-known economist, though Vietnam is not encouraging the import of
luxury goods, it cannot be totally prohibited because of the WTO’s commitments. If there are demands,
there will be supplies. Higher tariff can only partially reduce the demand of wealthy people
It is still doubtful whether the new restriction will have real impact on the trade deficit (Financial Times,
2011). On the other hand, foreign investors fear that the import controls would worsen the corruption at
customs, which is already endemic in Vietnam. The high level of custom duty, especially for luxury
goods, continues to favor the development of contraband with neighbor countries of Vietnam (China,
Laos, and Cambodia). Those products that are excluded from all type of taxation constitute a source of
supplying non-negligible for small businesses and counterfeits. Some governmental organisms are trying
to take actions against those practices but are still lack of capital and human resources as well as
necessary knowledge to obtain really significant results.
7. Corruption
Corruption Perception Index: 2.7 (ranked 116 out of 178 - Index units: 0=most corrupt; 10=least
corrupt.)
7
The degree to which corruption is perceived to exist in the misuse of public power for private benefit
among public officials and politicians (Transparency International, 2010)
8. Other Rankings
Ease of Doing Business Rankings: 78 out of 183 – the higher the more favorable environment for
conducting business in the world: Measures of business relations and their enforcement across countries
by measuring specific regulatory obstacles such as protection of investors, protection of property rights,
employment issues… (World Bank 2011)
Vietnam ranked among the average business-friendly environment in the world. However, thanks to the
recent adapted regulations to encourage foreign investment, Vietnam has very quickly improved it
business ease. The table below illustrates how the business regulatory environment has changed in
Vietnam from 2006 to 2011. Instead of showing which economies currently have the most businessfriendly environment, this approach highlight the extent to which the Vietnam’s economy regulatory for
business has changed compared to 5 years ago.
Global Services Location Index: 5.69 (ranked 8 out of 50) – (0 -10: less to most favorable for off
shoring ((A.T. Kearney 2011): measure the viability of Vietnam as a potential offshore destination for
8
services based on the financial attractiveness, people and skills viability and business environment. The
highest ranked country is the most attractive off shoring destination
Country Risk Rating: B – Political and economic uncertainties and an occasionally difficult business
environment can affect corporate payment behavior. Corporate default probability is appreciable
Business Climate Rating: C - The business environment is difficult. Corporate finance information is
often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional
framework has many troublesome weaknesses. Intercompany transaction run major risks in the difficult
environments
Demographic:
1. A young and active population
In 2010, the population of Vietnam was over 87 million.
The population is very young, with a median age of just 25,
which is about the same as India has and compare very
favorably with China’s 33. The economy enjoys a growing
working age population while China’s is decreasing. The
working population of 15-64 years old represents main
current and potential consumers of luxury goods, accounts
for 69.4%. The young society is potential for a long-term
investment as people are open to change and often quite
entrepreneurially minded.
Also, the post-war generation
(born after 1975) is positively inclined towards foreign cultures, which are used to favor foreign trends
and lifestyle
The director of PwC Thailand (advisory services firm) pointed out that the high percentage of young
consumers would be a critical factor helping Vietnam to stand out among emerging retail market,
including China, India, or Russia. Vietnam topped the list of world’s most attractive emerging retail
market in 2008 (Eurocharm). Young consumers, growing up in peace, enjoying from better social and
economic conditions compared to the old generations. They are able to earn more money with more
disposals income, making good fundamentals for the further growth of luxury retail sector. Although the
modern retail sector, including for luxury goods was in its infancy, it is growing fast at around 20%
(2009)
9
Good English proficiency
Thanks to its openness to foreign influence and reliance on trade, the
workforce with high level of English proficiency compares favorably
with many of its Asian neighbor. Together with the increasing number
of internet usage rate (nearly 28% in 2010 compared to 31% of China),
Vietnamese consumers can have greater access to international brands
information research, and are more receptive to foreign brands’
communications messages. Brand awareness can be created easily in
Vietnam with proper-targeted message. On the other hands, with a
greater exposure to information and choices, the consumers are
becoming wiser and more demanding.
Female labor force participation
Vietnam scores relatively well in the participation of women into the workplace. The country benefits
from a broad range of human resources and women are thus more educated, independent and may even
earn greater income than man. It is not rare that in some family, the higher-income source come from the
wives. Women also represent the majority of luxury customers compares to men.
2. Urbanization trend
The majority of people live in rural area, only 29.6% are citizens, which are 25.4 million (2009). In the
period of 1999 - 2009, urban population increased 3.4 % yearly compared to only 0.4% for rural. There
is an important movement of rural exodus. Assuming that this figure is linear for the upcoming year, the
urban population can reach 46 million inhabitants. The two agglomerations of Ho Chi Minh City and
Hanoi would have 18 million and 9 million of citizens respectively.
A part of two big metropolises, there are some secondary big cities which account for more than one
million of people each. Those cities, following Ho Chi Minh and Ha Noi still being not strongly
urbanized, start to upgrade the standard of living and consumption power. They also progressively create
new territories for luxury brands with great opportunities. Those cities include Hai Phong, Da Nang,
Hue, and Can Tho
10
North Cities
Centre
South Cities
Ha
Da Nang
Ho Chi Minh
Noi Hai Phong
City
intra-
Can Tho
intra-
muros
muros
Evolution 2003 -2006
+6,9%
+2.7%
+5.4%
+9.9%
+2.25%
Population 2006 (millions)
3.216
1.803
0.78
6.105
1.139
Population 2009 (millions)
6.472
1.841
0.89
7.163
1.189
Evolution 2006 -2009
+100.4%
+2.1 %
+ 14%
+17.3%
+4.3%
(Source: Statistical Yearbook)
The very high evolution rate of population in Hanoi was caused by the
expanding of the capital after August 2008. The blue line illustrates the old
boundary of Hanoi before the extension to the red area.
The enrichment of the country benefits firstly the citizens and the high-income groups
According to Mr. Fabrica Carrasco, director of TNS Worldpanel institute, there was an emergent growth
in major cities of middle-class whose monthly income was 190-405 $USD, accounted for more than
50% of the citizens by 2008. In additional, the increasing apparition of wealthy class which has monthly
income more than $500 USD, representing 20% of the population by 2009
Although there is a general improvement in standard of living in the whole country and an important
recession of poverty, the historic dichotomy between the two urban and rural worlds is getting worse.
Still, most of workers still earn just $1-2 USD per day toiling in the farm fields and “the money spend on
a small Vuitton bag can buy several cows for a farmer’s family and lift them out of poverty”(NY Times)
The repartition of wealth is very unequal between urban and rural zones. Agriculture sector regroups 2/3
of the population but represents only ¼ of GDP. In 2007, GDP per capita in urban zone was 6 times
more than rural’s and citizens of Ho Chi Minh City- the wealthiest local community could reach a GDP
8 times better than the most deprived of the country. This number was 825 USD while GPD/ capita of
HCMC was $2,180, urban was $1,300 and rural was only 220.
11
In 2010, GDP per capita at Ho Chi Minh City was $3,130 compared to less than $1,200 of the country.
This figure for the city is expected to reach $4,800 by 2015 for HCMC, which will gradually increase
the gap with the average of the rural areas. This number illustrate why HCMC concentrates most of the
majority of luxury brands in Vietnam, whereas Hanoi is the capital.
Conscious about the social and political risks of this unbalance, the government has set a priority to
reduce the inequality between the different regions in the country by building new economic zones in
the center area. The plan enjoyed some recent success, making Da Nang, the biggest city in the center of
Vietnam to enjoy an extreme rapid growth rate. It is foreseeable that the city with become the third
important market of luxury products in the near future.
Although this development is promising in a short-term, nevertheless, it is still obvious that the
country’s concentration of prosperity remains in Ho Chi Minh City and Hanoi. Other macro-economic
indicators also show the same trend, particularly the increasing industrial production and the FDI
illustrates the concentration of luxury consumers in the two cities. In 2005 those two zones welcomed
78% of FDI (53% for HCM city and 25% for Hanoi) and about the same distribution applied for the last
years, even with the increase of FDI in quantity, worsened the gap between the rich and the poor. It
means that, the GDP per capita only explains a growing trend of consumption power among Vietnamese
people, but we cannot fully rely only on the statistical number as the medium and high-income class
only account for a small number in the population.
The table shows the gap between the GDP growth rate and GDP per capita between Hanoi – the capital
and the average of the country. While much of the rural population hovers above or below the poverty
line, a completely new world has sprung up in Hanoi and Ho Chi Minh City. Even the most casual of
observers will have noticed
that Hanoi and Ho Chi Minh
City are now home to major
international brands that you
would
normally
associate
with London, Paris, or New
York. It goes without saying
that these brand names come
with hefty price tags
12
SWOT Analysis of Vietnam Luxury Market
STRENGHTS
-
WEAKNESSES
Positive economic prospects growth, despite - Lack of transparency, uniformity and consistency
the global crisis
in
Government
policies
Continued strong economic growth + half of
commercial projects
and
decisions
on
the population are under 30  dynamic and - Corruption and administrative red tape within the
-
quickly evolving commercial environment
government  difficult for foreign firms to enter
Increasing GDP, with disposable income
the market without good lobbying
levels in major cities 4 to 5 times this level - Very high import tariffs  uncompetitive price,
 fast emerging market for luxuries
favoring counterfeit and contraband
-
Certain social-political stability
- Infrastructure adapted to luxury standards is still
-
A government committed to liberalizing the
developing: high start-up cost, shortage of skilled
economy and to introducing reforms based
personnel
on free market
OPPORTUNITIES
-
THREATS
Young population: People on working age - Counterfeit market due to ineffective protection
has the ability to work and spend on luxury
- Uncompetitive price due to heave custom duty
goods
-
intellectual property
Active and open to changes, the consumers
are early adopters of trends from the world :
Brands awareness of can be created with the
right message
13
and taxes.
V.
IS VIETNAM A PROPRITARY / POTENTIAL MARKET?
Emergence of new wealthy class in sufficient number to constitute a
sustainable market
Household income or consumption by percentage
share:
Lowest
10%:
3.17%
lowest
20%:
7.51%
second
20%:
11.21%
third
20%:
14.83%
fourth
20%:
21.05%
highest 10%: 29.89%
The 20% of highest income people generates
already 45.39% of the country’s total income. This
figure clearly shows the wealth of high-income
classes. They only account for a small percentage of
the population but represent the main driving force
of the economy with growing power.
Consolidation of middle class (monthly income of more than US$ 435) and
emergence of wealthy class
While the super-rich represent only 1% of the population, the number of upper middle class luxury
consumers is growing at a staggering rate. This portion of this class is estimated about 17% of the
population (2007) and has reached 25% by 2009 (PwC Thailand, 2009). It is really difficult to estimate
the real percentage of this class as Vietnamese tend to keep private cash at home. "In America, you pay
in installments," said Nguyen Hoang Trieu, a luxury car dealer in Ho Chi Minh City. "Here, you pay all
at once, in cash. Sometimes people come in here with $400,000 in a suitcase." They are becoming
increasingly open about showing their status and are willing to spend larger amount of their income to
non-essential consumption, including luxury goods.
14
With the success from the economic and social reforms two decades ago, Vietnam benefited from a
remarkable reversal of fortune. Not only the poverty has been decreased by half, but also growing FDI
and export levels contribute to a steep rise in consumer confidence and spending with the apparition of
new wealthy class, who are private entrepreneur, executives of foreign firms… They represent a social
class that make fast money with the doubled of GDP per capita compared to 10 years ago, and are more
willing to spend.
Thus, the lifestyle and consumption trends have changed accordingly. About 1.5 – 2 million of
Vietnamese travel oversea each year, mostly to Asian countries and also to the US and Europe. Motors
and scooters still remain the main transportation means but car ownership is increasing dramatically
despite de poor roads quality. About 5% of the population own a car, and mainly concentrated in luxury
sector
Emergence in demands for luxury goods: Establishment of a society
of consumption and effervescence of luxury market.
In 2010, Vietnam has imported $5.7 billion of luxury goods, increased of 14.2% from 2009 (Ministry of
Industry and Trade) Vietnam is following India and China in becoming a new booming market for
luxuries. High-end brands such as Louis Vuitton, Prada, Bulgari, Dolce & Gabbana, Cartier, MercedesBenz, have built a visible presence in Vietnam’s major cities, and together they’re spending millions of
marketing dollars (billions of Dong) to capture the attention of Vietnam’s nouveaux riches.
The penetration of foreign brands into the Vietnamese market is relatively recent (American embargo
was only stopped in the 1990s) and making a fast-developed market, especially for advanced technology
equipment (Smart phones, Flat screen TVs…) and luxury products (cosmetics, perfumes, clothes...)
It is important to notice that Vietnamese people are very sensitive with foreign products as they
believe the origin of products is synonym to quality. Cosmetics and prêt-a-porter products are highly
demanded and also the case for foreign agro-alimentation. The presence of foreign restaurants, more
remarkable in the South, is greatly making the Vietnamese to be more interested to the international
cuisine.
The luxury market is the principal beneficiary of the concentration of wealthy population in the urban
area, which represents in a short-term an important potentiality of development
15
The
needs of luxury consumers are increasing and diversifying dramatically, but are actually
unsatisfied, meaning there still be a strong gaps between luxury demand and supply. However, since the
beginning of 2006, there was a rapid take-off of luxury sectors and the consumptions habits have
changed profoundly with the opening of numerous adapted shopping malls in just a short period. The
commercial surface dedicated to upscale product will strongly increase in the very near future with the
numbers of ongoing projects of opening noteworthy of luxury department stores.
1. The fancy for luxury goods of young people
The wealthy class show their desire to expose their new social status. Luxury goods are considered as a
symbol of succes and are widely recognized among the population.
%
of
the
Total
population
Classification socio – economic : High to low monthly income
Class A
Class B
Class C
Class D
Class E/F
(+$1000)
($500-
($300-$500)
($150-$300)
(< $150)
$1000)
I want to own products from brands to attest my success
Totally agree
36.4
48.1
35.9
35.1
35.8
33.4
Agree
32.6
34.6
36.2
34.1
27.7
25.6
Indifferent
19.9
10.6
15.4
20.9
24.9
25.4
Disagree
7.8
4.3
9.2
6.7
9.6
8.6
Totally disagree
3.2
2.4
2.4
2.8
2
6.2
(TNS Media Vietnam)
2. A new trend : The demand for more sophisticated products
If the vietnamese qualification of a luxury product is almost exclusively based on the price, there is a
new criteria started to appear more important for the wealthy consumers: the critera of quality,
uniqueness and originality of luxury goods.
Also, a large proportion of consumers are willing to spent for a higher amount to obtain a product of a
best quality brand
%
of
the
Total
population
Classification socio – economic : High to low monthly income
Class A
Class B
Class C
Class D
Class E/F
(+$1000)
($500-$1000)
($300-$500)
($150-$300)
(< $150)
I am willing to pay for the high-quality brands
Totally agree
54.8
60.6
58.1
55.1
52.6
46.1
Agree
23.9
21.9
24
23.2
28
21.9
Indifferent
10.3
10.3
9
10.3
8.9
16
16
Disagree
7.6
7.6
7
8.3
6.4
11
Totally disagree
3.6
3.3
2
2.9
2.9
5
For some consumers, a discreet logo and somes subtle signs of quality also started to be preferable as a
conspicuous display of a well-known brand. This new trend benefit some local creators, both vietnamese
and asian who came to place their own label in the market segment directly concurrent with luxury
foreign brands which are more classic. The local brands such as Minh Hanh, Minh Khoa, Vu Van
Chuong, Khai Silk, Mai Lam or the Tawainese Ipa Nima are particularly appreciated by young local
consumers and tourists who look for exotism of asian products. Among these, only Mai Lam and Khai
Silk can be listed as the leader among Vietnamese luxury brands in term of size, quality and commercial
plan.
Vietnamese Luxury Consumers:
The luxury customers’ profile of Vietnam is getting similar to the new industrialized Asian countries’
and in addition has a strong propensity of consumption. According to the US Central Bureau of
International Statistics, 56% are under 30 years old, which are 48 million people. The population is also
very dynamic thanks to the improvement of education system of the country in recent years. 41.7 % of
the population graduated from high school and 32.1% went for higher education.
If the traditional values are always present in the society, the citizens are, however, very opened to
technologies innovations, foreign cultures, and new consumption products from Japan, Korea, Europe,
and the US. More than 40% have daily access to the Internet and 97% of middle and high-income class
possess a mobile phone. They represent a part of population having access to the international
information and are very permeable to international trends in both technology (Smartphone, Table
Computers…) and products of consumptions (anti-age creams, slim jeans…)
Also, the Vietnamese consumers, particularly those who belong to middle and upper classes, are
modifying their habits. In term of diversification, they look for new concepts and new products,
especially in sectors of alimentations, cosmetics and skin care, perfumeries and fashion, proving by the
enormous numbers of new boutiques recently appeared in big cities. Consumers are upgrading their
demands with more sophisticated criteria: special designs and superior quality. In term of adoption and
frequency of new distribution forms, there is a significant development of modern distribution form that
is driving an increasing turn-over, which increased dramatically from only 8% to 15% of the total
purchases from HCMC and Hanoi from 2004 to 2007. Vietnamese people now are getting used to go
shopping in supermarkets commercial centers, and department stores instead of the traditional market,
17
and small stores. This development is still having a big gap with other South East Asia countries like
Thailand, and Singapore where modern distribution represent more than 20%.
Vietnamese consumer profile is somehow similar to Chinese, not only on the big amounts they spend
but also in the criteria of product choosing. Analysts consider Vietnamese wealthy consumers are
sophisticated.
Profile of Vietnamese luxury goods consumers :
They are young generation, who are generally born after the war ended (1975). They are mostly well
educated (nearly 45% of young people graduated from University or post-graduate education) updated
to the technology, prudent and respectful to the traditional values (According to TNS, a big part of
disposal income (26%) is reserved for family contribution), optimistic and festive
As the talent in Vietnam is in tight supply and demand, and wages are appreciating steadily for young
and skilled professionals. Therefore, luxury consumers usually are:

Employees of the many multinational corporations currently expanding into Vietnam.

Managers of Vietnam’s large and powerful state-owned enterprises.

Participants in Vietnam’s relatively small but explosive private sector
Recent opinion surveys showed that 60% of young people who are born after 75 are very optimistic
about the country’s future, and are determined to enjoy the here and now. On the other hand, the older
generations, shaped by the hardship of war are more likely to save for the future, convinced that
catastrophe lurked around every corner. They are against the new “materialistic enjoyment” of the
youth. The optimistic consumerism is the main driving force for luxury goods. Additionally, it is not
common in Vietnam that unmarried young Vietnamese live rent-free with their parents, have greater
disposal income. To this young generation, purchasing a luxury good is a status expression of success,
self-confidence, and independence from their parents’ strict conservatism.
All of those characteristics explain a strong spending power, as illustrated the high consumptionspending ratio, which account for 70% of the GDP, at a sensibly highest among neighbor countries
The consumption of Vietnamese people is, thus, deeply changed during recent years: the amount spent
for necessary goods remains stable while the spending for entertainment and hobbies (mobile phones,
restaurant, and other distracting activities…) explode. Hennessy consider Vietnam is from now on its
seventh worldwide market for cognac with a progression of turnover of +40% yearly.
18
Also, similarly with Extreme Orient countries, the attraction for new technologies is very noteworthy.
%
of
the
Classification socio – economic : High to low monthly income
Total
population
Class A
Class B
Class C
Class D
Class E/F
I am used to new technologies and I am interested in buying them
Totally agree
41.6
50.7
52.6
39
38.9
25.2
Agree
23.4
30.4
20.1
24.5
21.3
23. 8
Indifferent
17
9.4
14
17.6
18.5
24.4
Disagree
10.5
7.2
8.9
10.5
8.4
19.1
Totally disagree
7.1
1.9
4
7.9
12.5
8.6
(TNS Media Vietnam)
The conspicuous mode of consumption (or Status Consumption)
Status consumption refers to the “motivational process by which individuals strive to improve their
social standing through the conspicuos consumption of consumer products that confer and symbolize
status both for the individual and surrounding significant others” (Eastman et al 1999). Veblen in The
Theory of the Leisure class has described it as consumption activities undertaken by nouveau riche
consumers for the purporse of exhibiting their newly minted wealth by extension, their social
standing. The growth of the economy has paved the way for a thriving middle class, the
democratization of access to resources and the continuing desires for higher quality of goods and
services make the sake of status become a omnipresent phenomenon.
Urban Vietnamese consumers share some common characteristics with China, who tend to engate the
consumption of luxury goods and services, and aspire to own foreign imported brands for an image of
status (Forde, 1998).
“Goods, brands, and symbols associated with popular culture and Status
Consumptions are very much a part of Vietnam now and their popularity is increasing exponentially”
(Shulz, Pecotich & Le, 1994)
Prior to the economic reform of the country in the late 1980s, most of the income of a Vietnamese
family was spent on necessities. After then, with the increased revenues, people started to pay attention
to luxury items. Although the nouveaux riches were generally poor and “unsophisticated”, they
were changing fast. Along with economic reforms, there are also social changes of consumer values,
attitudes and behaviours. Some buying and consuming behaviours that were not socially accepted in
the past due to market constraints now become increasingly popular.
19
Vietnam is considered a typical case of “emerging economy” undergoing significant changes (Truong et
al.,2010) and thus has great potential as a consumer market with many consumers exhibiting strong
desires for luxury goods. With a high growth rate, improved living standards and changes in the patterns
of income distribution with the presence of emerging middle class.
A research has been conducted by the National Economics University of Vietnam among 800 emerging
urban consumers in Ha Noi and Ho Chi Minh city in one district down-town where considerable number
of emerging consumers are living and two other randomly chosen districts . The result
idicates
promising opportunities for foreign companies offering luxury products to Vietnamese market
since high level of Status Consumption is displayed. The important factors contributing to the
prevalence of Status Consumption were the accentuated levels of Modern Status Orientation,
materialism and individualism among these consumers. The values of urban Vietnamese consumers
have evolved along with the growing market-based economy.
In term of materialistic tendencies, there were changes in vietnamese consumers’ beliefs with regard to
the importance and acquisition of material possessions in recent years. They believe that luxury
objects can attest one’s success and achievement, and bring happiness in life. The study also
demonstrated a relatively low level of urban consumers who prefer local than foreign brands. Foreign
products enjoy an advandate over the local competitors due to their sympolic values and statusenhancement is considered a primary motive for consumers to engage in the purchase of foreign
products (Chan et al., 2009).
However, this poses challenges for luxury brands which sell products at high price because consumers
in emerging economies are price-senstive. Consumers may switch to buy local products when the
image, visibility and quality of these products are considerably improved, especially when Vietnamese
consumers generally show a great deal of pride and identification with the country (Lantz et al.,2002)
VI. HOW TO DEVELOP LUXURY MARKET IN VIETNAM
Luxury market outlook by sector
1. Cosmetics and Perfume
Principal brands implanted: L’Oréal, Lancôme, Shiseido, clarins, Carita/Decleor, O Hui, Clé de Peau, La
Neige, Cavil Klein, Versace, Bulgari, Guerlain, Clinique, Estée Lauder, L’Occitane…
20
The cosmetics sector in Vietnam is still developing. The major big brands like L’Oreal, Guerlain, and
Shiseido have come to Viet Nam for more than ten years and enjoyed great successes. In fact, the female
consumers devote a significant budget to cosmetics and body care products and despite high custom
duty, the higher price does not appear to be the main obstacle in their purchasing decision. The
Vietnamese customers pay attention on the product quality and require authenticity. Department stores
warranting the authenticity of products and reserve in general their ground floor to cosmetics and
perfumes brands
The most privileged beauty cares are whitening creams and lotions. Lancôme has its launching
campaign focusing on this type of product, which is the stereotype of female beauty of Asian countries
as opposed to Western women with white skin. Also, there is a real trend of anti-age cream and
conditioning products.
However, the main difficulty of luxury cosmetics brands in Vietnam is the competition of a wide
range of uncontrolled fake, mislabeled, and smuggled products. Those products usually target lowincome people, who have the spending around $3 per year for cosmetics purchases. Vietnamese
consumers in general spent $82 million on beauty and skin care products in 2006. Illegal and unofficial
imports are estimated to account for as much as 60 percent of these sales
Consumer tastes and preferences for more sophisticated products are maturing and shifting towards
quality brand names, especially younger consumers. Foreign brands that already joined the market
recognize the market’s future potential and are advertising aggressively. To capture more market share,
local manufacturers are investing in more research and development, as well as marketing and
distribution activities to compete with superior international brands. This growing and rapidly
developing market offers numerous opportunities for American companies in the following segments:
finished beauty products, raw cosmetics material and manufacturing technologies and related equipment
for beauty products.
Consumer trends for Cosmetics:

Vietnamese women are senstivie to the marketing argument “clean skin”. Therefore, the current
preference is for cleaning products, even more than whitening creams stay the leading products
marketed by brands, followed by anti-ages preventions

From 30 years old, Vietnamese women started to use anti-ages preventions

Hydratant products and treatments for oily skins are in vogue

Skincare products are purchased with whole product line instead of only one item

Women often purchase shaving products for their husbands
21
Consumer trends for Make-up products:

Preference for natural colors make-up (Korean trend)

Active women prefer basic colors : rose, brown, black

Celebrities and trendy women: more braw and showy colors

Best seller : foundation cream and eye shadow
Consumer trends for Perfume:

“Eau de parfum” is more preferred than “Eau de toilette” because it stays longer with the hot
weather, humidity and the wind (Vietnamese people mostly use scooters as transportation means)

Best sellers are bottles of 100ml. The north regions preferred small bottles (Hai Phong customers are
much likely to purchase 30ml bottles)

Important sale volumes are from purchases for gifting, especially in special occasions such as
Women’s day, Valentine and Chrismas

Local products (Miss Saigon) only target mass market while prestigious brands, especially “madein-France” perfumes are favored by wealthier consumers. A large portion of customers are young
people from wealthy families
About L’Oréal Luxe Vietnam (according to the Interview with Ms Giang LE, Junior Brand Manager)

L’oreal subsidary in Vietnam opened 2009. Since then, many new products have been successfully
introduced to the market. This year L’oreal enjoy a high growth rate in the Vietnam market , about
30%

Best sellers : Skin cares (come products are specialized for asian skin), make up and then Fragances

After the policies of the government to reduce importing of luxury goods, L’oreal has a lot of
difficulties to import its products from 4 manufacturer to Vietnam. It has to deal with more
complicated custom procedures : every products imported should have a sample for quality check,
and should have certificate from L’oreal France that the products is currently being sold in Eu
market and L’oreal would be responsible for the quality… The imported products used to be able to
pass by planes, now only waterway through 3 international ports of Vietnam allow luxury goods to
pass by with stricter controls. Sometimes, products are stored at the port’s warehouse up to 3
months waiting for customs procedures to be done.

L’Oreal’s advertising Agency is Publicis. Every campaign should be validated by L’oreal Asia,
Publicis Singapour and finally by Publicis Paris before going to the wide public. The procedure
22
sometimes takes too long and the validation of Publicis Paris is the hardest. Usually, the validating
process should be passed by Publicis Vietnam – Publicis Singapore – Publicis Paris, which take
longer time. Recently, L’oreal Vietnam team choose to passe by L’oreal Asia – L’oreal Paris –
Publicis Paris for higher chance of validation
2. Prêt-a-porter, Lingerie
It is important to note that fashion in Vietnam is mono-seasonal. The demands for luxury reade-to-wear
used to be very limited in Vietnam. In fact, the Vietnamese consummers only purchased luxury
clothings very occasionally and in limited quantity. Also, some well-known foreign brands, principally
italians and britans are present in the market, and the proposed collection are generally incomplete (only
Spring/Summer collections) and not up-to-date compared to thoses of Occident market.
This weakness of the luxury ready-to-wear market can be explained by the low price of fabrics and
materials and the workforce in Vietnam. Also, tailored clothes are particularly popular and Vietnamese
consumers used to not contribute a large budget for clothing.
However, since 2006 with the apparition of a lot of foreign brands, the vietnamese consumption habits
have changed dramatically. Thanks to the development of adapted commercial surface, as well as the
apparition of leisure activities (clubs, bars, opera…) consumers started to spend more for luxury clothes.
Since then, the market has enjoyed extremely high growth rate with the arrivals of big fashion brands.
The website of Asian Clothing & Fashion, a business information center for the fashion industry has
interviewed young businesses men and women in Vietnam about their fashion spendind.
International fashion and lifestyle magazines such as Elle, Bazaar, Harper’s Bazaar, and the famous
local one Dep (beautiful) has significantly contribute to promote high-class fashion. Those magazines
also play a important role in introducing Vietnamese people to foreign trends, as well as creating brands
awareness among consumers. Most of young people are early-adaptors, any new comer to the market
with proper communication campaign has enjoyed dramatic sale increase.
Well-known luxury fashion brands are Gucci, Prada, Burberry, Versace, Dolce&Gabbana, Gianfranco
Ferré, Just Cavalli and lingerie brands Aubade, Chantelle
There is also a strong development of high-class local brands. Khai Silk was the most famous local
luxury brand created in 1980, specialized in clothes made by silk. The brand has consolidated its
position not only in the country but is also expending to international markets. In addition, some
23
experienced and young designers graduated from local or international schools are creating their own
brands offering more diversified to customers who look for specialties.
No longer just acting as subcontractors to foreign partners, some domestic apparel companies are lifting
the profile of Vietnamese-made fashion in the local market. Young designers for Eternity Gruz, a brand
owned by the garment company May 10, combine luxury and practicality into their product lines. Other
players such as Viet Tien, Nha Be, Phuong Dong have been experienced garment companies and subcontractors in the market, now started to upgrade their products quality to enjoy the promising fashion
market.
Lingerie:

Demands for luxury and haut-de-gamme lingerie are still limited

Vietnamese men purchase very rarely lingerie items for their wives or girl-friends

The consumers privilege bras with frames and paddings, and the most popular size is B

They can wear slips or strings but not are not used to tangas, popular size are 36-38

Vietnamese consumers are very classics in choosing colors: white, black and complexion

Transparent items are difficult to sell

Comfort is the main criteria for buying decision
3. Leather and Accessories
French and Italian luxury brands are popularly preffered for their creativity and elegance. Most of those
brands outsource their production in South East Asia countries and some Vietnamese leather brands
products of good quality. However, local names cannot compete with international brand names due to
the latters’ well-known prestige and history
This market sector is in full expansion with numerous distributors who chose to invest for luxury
accessories, especially leather before turning to ready-to-wear sector. The main advantage is leather
goods do not suffer strong seasonal effects compared to clothing, and their price s relatively abordable.
Internationally well-known brands were introduced to the market for years such as Louis Vuitton, Bally,
Salvatore Farragamo, Furla, Longchamp, Dunhill, Bally, Lancel…
Other accessories such as belts, eye wears, scarfs … enjoy the increasing demands with diversified
needs to satisfy. Accessories is considered as a entrance gate for consumers to the luxury world because
of its afordable price but still allow consumers to distinguish themselves and show their social status.
Bags
24
-
The models of zebra-striped or leopards bags are best-sellers in Vietnam as the consumers look for
trendy and ostentatious bags. They want designs that can show the values and sotisphicated details.
Small shoulder strap and colored bags are also privileged.
-
Bags made by suede are difficult to sell because they are considered dirty
-
Local products are very diversified and are improving in quality, foreign brands should be able to
justify their high price with better quality.
Shoes: Vietnam is the 3rd world producer of shoes after China and India but the products are estentially
in sport sectors. Foreign brands like Adidas, Puma, Nike, Converse have been popular in the country for
years. For fashionable shoes, the market is still very young with only some brands like Jimmy Choo,
Nine West, Bally, Balenciaga, Salvatore Ferragamo and the recent comer Christian Louboutin since last
August 2011
The italian Salvatore Ferragamo has celebrate its 5th exclusive brand store opening at the Rex Hotel
Arcade in Ho Chi Minh city March 2011. The brand was one of the pionner to the market with its first
store opened March 2006. “Vietnam is a very promising and highly prestigious market, we have great
expectations for the future, and we are proud to offer the same exciting shopping experience of other
international fashion capital to our sophisticated Vietnamese clientele.” said Michele Norsa, Managing
Director, and General Manager of the Ferragamo Group who attended the ceremony. With a surface area
of roughly 200 square meters, the new boutique offers a complete range of Ferragamo products.
4. Jewelry, Watch
The vietnamese jewelry is still remain very traditional in both fabrication and design. Classic designs set
with diamonds or jade are largely appreciated among consumers. Distributors and importers are often
cautious to bring prestigious international brands to the market because of two reason. Firstly, imported
taxes are high. Secondly, the buying method of imposing a minimal volume of pieces applied by foreign
brands are percieved risky for importing agents. Only few jewelers have joined the vietnamese market
but he situation has improved rapidly and many new brands announced their presence since 2007
Except japenese brands and Cartier, the upscale and luxury watch market in Vietnam is dominated
principally by Swiss watchmakers such as Longiness, Rado, Rolex, Tag Heuer, Chopard, Piaget…
-
Technical watches are not very privileged. Lack of watches collectioners
-
Purchasing criteria: price and design
-
White gold is more preferred than yellow gold in Ho Chi Minh than in Ha Noi
-
Pens are usually purchased for gifts
-
Customers rarely customize their products
25
5. Home equipment and Real Estate
Luxury home decoration sector in Vietnam face a real concurrence with local brands as Vietnam is
specialized in producing and exporting furniture and home decoration items. The main companies
specialized in importing items for home equipment and decoration are Eigh Lions, Pho Xinh and An
Duong for furnitures from Europe. Those importers manage commercial locations situated at the same
times in residential districts of the big cities and also some stores implanted in luxury commercial
centers of Ho Chi Minh City and Hanoi. Eigh Lions has recently launched its new brand “Home Studio
Plus” with a corner at Parkson and some locations in the center of Ha Noi and Ho Chi Minh city.
Principal implanted brands are Christofle, Leonardo, Spinella, Alessi
The customers often priviledge the set of furniture in rooms that are visible by visitors and guests such
as living room, dining room. Some Vietnamese consumers, similarly to Chinese culture, decorate their
houses based on the principles of Feng Shui for purpose of harmonisation the energy of the space to
favor the health and well-being of the owners.
The rapid blossming of real estate sector with the increasing numbers of luxury residences encourages
the development of interior design sector . Wealthy people demand condominums, penthouses with
more sophisticated decoration. Influenced by new magazines of decoration and architecture, nouveaux
riches invest the more and more in their housing equipment.
6. Entertainment (Golf, Spa)
Similarly to other Asian countries, golf is the main leisure sport for the high society. In 2007, there were
around 15 golf clubs in Vietnam plus another 15 ongoing projects with the license of investment
already signeed.
Spas constitute somehow an feminine equivalence of golf. It is hard to enumerate the existence of luxury
spas incorporated in 4 –stars and above hotels. Also, the apparition of foreign spas with the great
notority from over the worlds has brough the international leisure standards to the market such as
l’Apothiquaire, Qi (Shiseido), QT Salon (Clinique), Clarins
Distribution
1. General characteristics of luxury goods distribution in Vietnam
There is an actual revolution of distribution in Vietnam. Commercially, from 2008, the obligation for
foreign firms or FDI to have only one distributor for the whole country has already partially raised,
allowing the presence and the penetration efficiency of foreign brands into Vietnamese territory. Most
26
importantly, in the point of view of foreign implantation, after 2009, the distribution sector started to
be completely open to foreign investors, who can own 100% capital of their boutique, or any distribution
structure (Ubifrance, 2010).
Suffering from numerous deficiencies, logistic is certainly one of the most delicate problems in
Vietnam, notably in land transportation, which causes the market to be divided into different parts along
the morphological North/ South of the country. Because of the inefficient transport of merchandises on
land, enterprises often have recourse to maritime and fluvial transportation, which benefits from a more
developed infrastructure and the presence of international logisticians at the ports.
In the financial plan, the practices done by wholesalers and retailers stay rudimentary and largely
inadequate to international trading, forcing foreign suppliers to pass by intermediaries. There is an
almost systematic application of consignment sale in which foreign suppliers send goods to the reseller
who pays them only as and when the goods are sold. This working method is traditional in Asia, still
remains one obstacle for foreign brands who wish to enter the market, especially for the goods which
have expiration date or used under temporary trends. In addition, the payment of retailers to wholesalers
is generally by liquid, which do not favor direct exchanges between both parts. This leads to an
organization of a complex and often costly logistic.
However, the retailing sector is going through a period with tremendous changes, notably in two
extremities, with the development of mass-market and on the other hand, the apparition of a luxury
market. From 2006, the acceleration of luxury brands’ implantation to Vietnam is clearly seen.
Real estate investors, high-class boutiques, and arcades commercial of big hotels are contributing to the
rise of this segment by multiplying the surfaces more adapted to luxuries. An increasing number of
commercial firms and investors are entering the Vietnamese luxury market, including all sectors: hotel,
restaurant, cosmetics, spas and entertainments… This development is accompanied by a higher bid
between investors to be able to be present in the best locations, contributing to the skyrocketing of the
real estate price in cities centers as well as nearby urban peripheries. Only 150 000 to 200 000 m2 of
ground are available for the cities of 8 million inhabitants Ho Chi Minh City.
Despite being more flexible since the adhesion to WTO of 2007, the legislation used to allow only
49%-owned for foreign firms, making obligatory the local partnership. The engagement taken by the
Vietnamese government of total opening of distribution sector from 2009 will make a more dynamic
market, which is already favored by a strong growth rate. The apparition of new foreign players, but
also nationals, will consequently create new forms of distribution (for instance franchising, branch
office) that allows new channels for importers. Also, there is the new ways of packaging, merchandising
27
and more diversified choices of communication and advertising… Those opportunities are still being
difficult to quantify, but are truly potential.
2. Chosing the right distribution system
The new legislation has allowed 100% owned subsidary in Vietnam. Subsidary allows many
advantages such as : in-depth marketing development of specific message to Vietnamese market, the
sale of products at wholesale price, and a more impressive brand image at the local market (Chevalier
M. and Mazzalovo G., 2011). However, only the giants and well-established brands such as Louis
Vuitton, L’oreal or Esteer Lauder can afford for this distribution system due to the heavy cost of
establisment and operation. Also, sale volume of some luxury producst in Vietnam is still low to cover
the expenses necessite at the introduction phrase.
Most of the cases, it is less risky and costly for foreign brands to firstly enter the market via a local
distributor or importers, and after certain succes, the brands may consider to open their own subsidaries.
The local distributors purchase goods with their agents, and are responsible for the stocks and sale
performance. This system constitutes, as a result, an approach less costl as the distributors represent as
the same times several brands to spread the distribution cost. The experienced distributors can assume
all the financial risks for the brand in the market, and are generally able to obtain premier locations that
meet the brands’ image and to negotiate reducted costs for advertising using their power of having a rich
porfolio of brands. As the Vietnamese market is totally different from Western countries, specific
approach strategies are crucial for the succes of the brands, even for those who have been succeful in
other asian countries. Having the knowledge of the local market , the distributors can offer to the brands
appropirate entrance methods, which efficiently reduce the market research costs for the brands. Some
well-known distributors in the market such as An Tran, Apple Tree, C&T group, Eight Lions, Duy And
Co.Ltd … have established strong distribution channels over the country, bringing luxury brands from
all over the world to the market. Each distributor is specialized in one market sector such as fashion,
cosmetics, perfume, accessories etc. to efficiently build up their specialized distribution channels with
tailored promotional strategies.
Besides the advantages listed above, this system of going through local distributors reduce the control of
the brands over the promotional and marketing campaigns as the distributors, in some cases, choose
themselves their marketing plan rather then following the brand’s recommendations. Also, relationship
brand – distributor is crucial for the brands’ success in the market due to the typologie of vietnamese
society where businesses rely heavily on relations. The first important criteria is trust. One distributor
can be excellent for some brands which have good mutual relations and at the same time, a worst partner
28
for thoses which have no trust. Once a brand failed in the market due to damaged brand – distributor
relationship, it is very difficult for the brand to rebuild its image, even by switching distributor.
3. Rapid development of distributors/ importers
Many world-well-known brands have entered the market, making a very effervescent landscape. Some
have been present in Vietnam for more than 12 years like Louis Vuitton, one of the first entrants on the
Vietnamese market, have been operating two stores, one in Ho Chi Minh, and a second one in Hanoi,
within the Sofitel hotel. Gucci have been operating two stores in Vietnam, one in Ho Chi Minh City
(Sheraton Hotel) and the second one in Hanoi (Hong Kong Land Centre). Hermes is represented with a
mono-brand store in Hanoi, within the Metropole Arcade at the Sofitel Hotel.
Among the latest
openings was the first mono-brand store of Cartier in Ho Chi Minh City earlier this year, within the Rex
Hotel situated in the center of the city. Cartier plans a second boutique in Vietnam and this store would
possibly be in place in Hanoi in the future. Other top jewelry brands operating mono-brand boutiques in
Vietnam are: Piaget (Continental Hotel), Chopard (Diamond Department store). Through its local
exclusive distributor, Rolex is present with two boutiques, one at the Diamond Department Store and
one within the Rex Hotel, both in Ho Chi Minh City
The number of enterprises active in the luxury sectors has been increased considerably in the period of
2005-2006, notably in the fashion-related fields. It is estimated that around 70 firms are distributing for
luxury brands in all sectors combined:
-
Around 20 in Perfumery
-
Around 15 in Fashion (ready-to-wear, accessories…)
-
Half-dozen in Watch and Jewelry
-
2 to 3 in high Technology (Bang & Olufsen and Vertu)
-
Around 40 in Leisure services (golfs, spa, cinema, bar and high-class nightclubs…)
-
Half-dozen of Hotelier groups which manage 5-stars hotels.
-
Half-dozen in Fine food and beverage, including wine
(Please refer to Appendices for the detailed lists of distributors, importers and their porfolio of brands
as well as their distribution locations)
As the Vietnamese luxury market is still young, even with the most extended distribution channels
contain rarely more than ten locations. In addition, beside some enterprises which are specialized in a
specific sector, some distributing firms are building a portfolio of brands and activities that allow
covering a larger spectrum in many luxury fields. It is a very recent phenomenon of some firms that
have been successful in this development path. This was the case of only some such as Thuy Loc
29
(cosmetics, spa, ready-to-wear, leather, shoes, real estate…), Openasia (automobile, jewelry, fashion,
high technology, real estate…), Apple Tree (real estate, cosmetics, tourism, fine grocery….), Imex Pan
Pacific/ Duy Anh (fashion, cosmetics, duty free), Khai Silk (fashion, catering, real estate…), Eight Lions
(home equipment, fashions…)
4. Insufficient commercial surfaces adapted for luxury distribution
Real estate stocks in Vietnam are totally satured
The Vietnamese real estate market is actually characterised by a profound shortage of offerings, the
undertaken of numerous construction site and the
extremely high prices. The occupation rate of
residentials, offices or hotel businesses are superior than 95% and the price are at least comparable and
often higher than in big capitales of neighbor countries : 4 time greater than Manila or Jakarta. The
shortage of real estate stocks has the same effect for commercial surface, and this weakness represents a
real constriction for luxury market.
Even though building projects are multiplying and upscaling since 2006 when the authority announced
an increase of 42% investment flow for real estate, an expectation of the balance between demands and
by 2009 remain difficult to achieve. In 2006, all rare additional surface announced for 2007 such as
Pacific Place, Opera View were already already rent before its inauguration by Louis Vuitton, Zegna,
Burberry. The same case for projects of 2008 such as Paragon, Saigon Pearl, Asia Tower were all
reserved in 2006.
Only by 2009 with the opening of many department stores in the city centers such as Tax Center, Time
Center, Kumho Asiana Place in Ho Chi Minh city , and Opera Business Center, Ruby Plaza in Hanoi
that the situation started to cool down. However, there are still unsatisfied needs of adequate locations
for luxury brands.
While waiting for future projects that are expected to solve the problem, the only alternative for the
brands is to rent boutiques on the streets, which is risky due to the juridic insecurity in Vietnam in the
real estate field (no recognition of goodwills, rental contract limited to 2-3 years with no garuanty of
renewal , the complexity, and sometimes the opacity of local administration)
Distribution of luxury products and services is traditionally concentrated in only some
districts of Ho Chi Minh city and Hanoi, and recently, in some Department Stores
Contrary to many other asians cities, the city centers of Ho Chi Minh city as well as Hanoi have the
advantage of having some main streets (Dong Khoi and Hai Ba Trung in Ho Chi Minh city; Ly Thai To
30
in Hanoi), and even districts (district 1 in Ho Chi Minh city and Hoan Kiem district in Hanoi) which are
reputed for being dedicated zones of luxury or, at least, upscale products.
The choice of a location in Ho Chi Minh city is still easy insofar as the streets and commercial centers
are all concentrated in a quite restreint radius of the District 1, while the positioning of actual and future
commercial centers in Hanoi is much more scattered.
HCM
city
Hanoi
Positioning of commercial streets and upscale Deparment stores in Ho Chi Minh city and Ha Noi (Syrena,
Asia Tower and Ruby Plaza are situated outside the map)
5. Locations in Ho Chi Minh City and Hanoi for luxury retailing
Locations in Ho Chi Minh city:
Hotels:

Sheraton : Vertu, Longiness, Prada, Gucci, Tod’s, Dolce & Gabbana …

Caravelle, belongs to Saigon Tourist : Dan Jewelry, Jeager Le Coultre, Chopard, Gucci…

New World , Marriott Group: Ipa-Nima, Dunhill, Carita/Decleor, Shiseido, L’occitance, Clarins…

Park Hyatt, Hilton Group: Giorigo Armani, Max Mara, Prada…

Rex Arcade: 2000 sm of luxury boutiques for Chanel, Burberry, Salvatore Ferragomo, Cartier and
Ralph Lauren (CBRE 2011)
31
Department Stores:

Parkson, belongs to the malaysian Lion Group, was the first truly international depatment store of
17.000 m2 to be opened in Ho Chi Minh city by 2005 by signing a contract with Saigon Tourist, and
then the 2nd in Hai Phong city. Parkson dispose a license for open in total 10 department stores in
Vietnam and 7 have been opened so far : 5 in Ho Chi Minh city, 1 in Ha Noi and 1 in Hai Phong
(18.000 m2 inside TD Plaza where located Clinique, Clarins, Lancôme, Estée Lauder, Lancel, Calvin
Klein, Elle, Levi’s)

Artex Plaza (alias Opera View) : property Artex Saigon, subsidiary of Satra, the galery was opened
in 2007 with a modest size but ideally situated at the angles of two important commercial axis Dong
Khoi and Le Loi, in front of the Caravelle Hotel. The first floor is reserved for luxury brands Louis
Vuitton, Zegna, Burberry, Salvatore Ferragamo, Bally. The 5 other floors of Opera View are
principally offices.

Time Square: a complexe of residential, hotel, offices and distribution surface for upscale products
with 43 floors on 4500 m2 , built by Larkhall in joint venture with Savico – a big vietnamese
enterprise and real estate developer.Located in the very center of the city, between the Le Loi
avenue and Dong Khoi streee, this project of $95 millions finished its construction in 2009.

Saigon Paragon: its real estate developer is the stylist-businessmen Hoang Khai – the owner of the
luxury vietnamese brand Khai Silk, and Mme Le Hoai Anh – the director of Thuy Loc distributor. It
is a commercial galery of 8000 m2 in the heart of the new high-class residential district Phu My
Hung. It was opened by 2008 with the presence of ready-to-wear brands Kenzo, Jean Paul Gaultier
as well as cosmetics brands Shiseido, Clarins, L’Occitane
Commercial Centers:

Saigon Center: Developed by the singaporian firm Keppel Corporation in joint-venture with
Sowatco&Resco, the building is situated in one of the principal commercial axis of the city. This
center is specialized in furniture, luxury interior design, kids wear and toys.

Diamond Plaza: Belongs to the korean investor IBC Corporation in joint-venture with Vietnam
Steel, this center was the first upscale one opened in 1995 and restored in 2001. It is situated in ce
32
heart of Ho Chi Minh city, in front of the cathedral Notre-Dame. Although Diamond Plaza has some
aspects of a department sotre, it has no proper distribution activity and operates like a classic
commercial center with the presence of Bulgari, Shiseido, Clarins, Gucci, Cartier, Mont Blanc,
Longchamp, L’Oréal, Furla, Salvatore Ferragamo…

Saigon Pearl : a real estate project positioned as an upscale standard, developed by Vietnam Land
SSG in joint-venture with 7 vietnamese enterprises and the group Sun Wah from Hong Khong. It
was partly constructed by Bouygues, consists of 8 towers of 37 – 40 floors, plus 162 villas and a
haut-de-gamme commercial center of 40.000m2 . Inaugurated from 2008, althought being far from
the city center, this commercial center has the capacity to position itself correctly at an upscale
standard with its size and its location in the chic residential district An Phu and the future business
district Thu Thiem.

Tax Center: The historic commercial center of the city belongs to the public group Satra (Saigon
Trading Corporation), it has 5 floors and locate just in front of the City Hall was completely
distroyed and replaced by a real estate program of 43 floors. The investment was $121 millions
Locations in Hanoi
Hotel:

Métropole Arcade, situade in Sofitel Métropole: Louis Vuitton, Cartier, Chopard, Montblanc,
Salvatore Ferragmo

Hilton: Furla
Department Stores:

Trang Tien Plaza, belongs to Vinaconex, a big vietnamese construction firm, renovated in 2005.
This store of 8000 m2 is situated in the heart of the capital, just next to the Hoan Kiem lac. However,
its positionment in the luxury sector is not yet not totally affirmed as the infrastructure is just above
the average standard. Some upscale brands like Valentino Rudy, Elytis (frangances distribution) or
Pierre Cardin, Philippe Charriol, Samsonite… are present here.

Vincom City Tower: belongs to the ukranian-vietnamese group Vincom Jcs, opened its first tower
in 2004 and the 2nd twin one in 2010 with 6 floors reserved to shopping mall.

Ruby Plaza: a complex building of 16 foors, specialized in selling jewelry, precious stones,
diamonds, and also perfum, cosmetics and accessories.
33

Pico Mall : The newest one opened in September 2011, belong to Pico Ltd and CBRE Vietnam is
the biggest department store in Hanoi with 30 000 m2 of surface
Commercial Center:

Ocean Park: Commercial galary 5000 m2 welcomes about 15 exclusive boutiques of ready-to-wear
and accessories italian brands: Gianfranco Ferré, Versace, Versace Sport, D&G, Roberto Cavalli,
Just Cavalli…

Pacific Palace: Residential complex with offices and commercial centers belongs to the french
investor Jaccar. It was opened in 2007 with the 2 first floors of 9.000m2 consist of luxury boutiques

Syrena: the first commercial center of West Lake zone opened in 2007, offers a commercial surface
of 5000m2 for boutiques of ready-to-wear, accessories and jewelry. Chesterton is the principal agent
renting boutiques spaces.

Opera Business Center: launched in Mars 2007 and managed by the real estate developer CBRE
which reserved its ground floor for the big luxury brands

Garden Shooping Complex: Garden I Bitexco was the 2nd development phrase of the project The
Manor already present in Ha Noi and Ho Chi Minh City. This complexe of 51.000 m 2 has a upscale
commercial center of 5000 m2 was opened at the late 2007 with one part dedicated to the promotion
and launching of new brands.
Duty free shops

They are situated in international airports and ports of Ho Chi Minh City, Da Nang and Hai Phong as
well as some border gate to China, Cambodge and Laos. There are some duty free boutiques in the
center of Ha Noi and Ho Chi Minh city but the sale volumes are unimportant.

The duty free market is developed under the effect of the increasing number of tourists and the “mise
a niveau” of 3 principal airports of the country with the increasing number of passengers via
34
international and national terminals. The turn over was about $150 million (2006) and the market is
controlled by only 2 firms : Savico and Imex Pan Pacific (disposes 80% of market share)
Locations in other cities

TD Plaza: Commercial complexe consists of 2 towers situated in the center of Hai Phong city and is
managed by CBRE

Vinpeeal Tower: The famous touristic international destination opened in 2007. The project was
developed by the rusian firm Technocom who is also the owner of Vincom City Tower in Ha Noi.
6. Retail Market Updates for 2011
Ho Chi Minh City
The table below illustrates the supplying situation of Department Stores and Shopping centers from
2008 and the future new vacancies expected for this year 2011
The below table summarizes the changes in retail market of HCMC by Quarter 2 of 2011. Comparisons
of vacancy rate and rents price have been made with the 1st Quarter and last year’s .
35
According to the lastest report of CBRE, Ho Chi Minh Market
Insight 2011, the overall vacancy was higher than the last quarter
of 2010 due to the opening the new Department Store and
Shopping Center.
Centre Business District (CBD) department stores rent increased by 1% to an average of $125.38 US
psm / month as renovations have been made in some shopping centres. There was new boutique shop
grand-openings such as Burberry, Cartier (Rex Arcade) and followed by Chanel, Bulgari and Ralph
Laure. Rent in non-CBD shopping centers continue to decline to around $33.13 psm due to its
disadvantage of their location, and catchment areas.
The rents in prime locations would still increase in the next four quarters due to a lack of avaialble
space. However, more projects of Department stores and Commercial center are under development and
are expected to be ready for use in the near futures. Most of them locate in the busy District 1. New
vacancies bring more choices for locations for luxury brands, and would help to decrease the rent price
36
Hanoi:
Total stock of the modern retail spaces in Hanoi decreased by 11.8%
in the first quarter of 2011 as Trang Tien Plaza is temporary closed
for renovation and the restructuring would allow it to achieve the
premier status in the city. More new high-end and luxury tenants are
anticiapted to enter the market
Numbers of projects are lauching and leasing activities are beginning.
Savico MegaMall and Mo Market was launched in March 2011. The
giant Vincom revealed it aggressive plan of introducing 10 shopping
centers nationwide with total GFA of more than 1 million
squaremetres in the next 4 years under 2 brands: Vincom Center and
Vincom Mega mall
The rental price is continuing to increase in the Centre Business
District (CBD) but decline outside the CBD due to the rent discount
policies offered by some new buildings.
In the next few year, luxury retailers will have more choices as the
market is expected to welcome large new supply from major regional projects: Vincom Mega Malls
(230.000sm), Royal City (200.000 sm) and Ciputra Mall (200.000sm)
37
7. Renting price of a corner or a boutique
Department Stores:
Prime retail rents in Vietnam is quite high compared to
South East Asia neighbours, even higher than Malina and
Bangkok. According to the international real estate service
provider Savills Vietnam, the high rent in the city center is
a big challenge for current and future retailers. The
increasing in price of those locations may cause retailers to
look for other commercial surfaces outside the CBD with
more reasonable rent.
Luxury Department Stores like Parkson, Diamond Plaza
are paid with a rent plus a profit sharing amount. In Hanoi
and Ho Chi Minh City, department stores announe before
negociation a rent price generally around $120 pms and a
debit of around 30-25% from the revenues. For ground
floor surfaces, the rent can be much higher, depending on
the strategic location of the building (inside or outside
CBD, on commercial axis…) We observe a continuous
upward trend of rent inside the CBD over the years
The rental of luxury and upscale commercial locations are managed by two foreign real estate agencies:
CB Richard Ellis and Chesterton. The situation of quasi-duopole contributes an alignment of renting
prices.
38
Boutiques:
The rent of boutiques located on the streets present a larger price range due to variable factors and
depend largely on the negotiation between two parts. The best locations often belong to State-owned
organisms. The price maximum for an exclusive boutique in central street (such as Dong Khoi or Le
Thanh Ton in Ho Chi Minh city) can be almost similar to a location in a Department Store.
Marketing and Communication
1. Magazines
Luxury brands have a large choice of magazines to communicate their brand images. Just some years
ago, it was hard to find a reliable and sophisticated magazines specializing in promoting luxury brands
and target the audience. Nowardays, the apparition of Vietnamese version of internation high-end
fashion magazines such as Elle, Harper’s Bazaar and other lifestyle magazines such as Cosmopolitan,
Her World have greatly improve the dynamism of communication channels.
Beside Fashion
publication, high-end magazines specialized in different sectors such as cars, sports, food and beverages,
watch and jewlery can help to tailor the marketing messages to specific customers
High-end magazines are specialized in many luxury sectors
-
Fashion and Lifestyle: Dep ( Beauty : the local but trendiest magazine acts a reliable luxurious
trend setter and fashion & beauty guide) , ELLE Vietnam, Harper’s Bazaar, Herworld, Cosmopolitan,
Lady Luxury, Thoi Trang Tre (Fashion for the Youth), The Gioi Mot (The world of Fashion…)
-
Sport : The Thao Van Hoa & Dan Ong (Sport Culture& Men) , Vietnam Golf Magazine
-
Business: Business Styles, Businessmen…
-
Car: Autocar Vietnam
2. Advertising, Media
Used to be practically inexistent at the early 1990s in Vietnam, advertising has considerably developed,
with the sector turnover of 300 million $USD by 2005, in progression of 50% compared to 2002. The
advertising means are also more diversified, covering all the Media types, including television, radio,
press, displays, and Internet. Only some weaknesses still exist in urban displays, which is still lowstructured
39
With an audience rate of 96% in Hanoi and 92% in Ho Chi Minh City (Ubifrance, 2011), the television
still play a medium choice for advertising campaigns. In 2005, it received 70% of expenses compared to
the press’s 28%. The other media means cover the remained market parts
With the development rapid of Internet and mobile phone, the brands are using the more and more this
communication support.
Nowadays, there are around 3000 advertising agencies. 60% of which are implanted in Ho Chi Minh
City. The market is dominated by foreign firms that represented 80% the activities of the sector.
Local agencies
Foreign agencies
Dat Viet
Léo Burnett
Vinexad
BBDO Asiapacific
Kim Minh
J.Walter Thompson
Lotus Communication
Mc Cann-Erickson
Goldsun
Prakit & CB Public Company
Youth Advertising company
Dentsu Inc.
D&D
Olgivy and Mather Advertising
Viet My
Saatchi and Saatchi
Sunflower Media
Publicis
In term of policies, the advertising sector is strictly supervised. The foreign agencies still cannot enter
the market through an affiliate 100% of foreign capital. They have to build an obligatory co-enterprise
with a Vietnamese firm where they have to contribute at least 30% of the capital.
Constraints
1. Counterfeit market
Numerous illegal production and distribution of counterfeit products, usually from China still supply for
markets and boutiques in Vietnam. There is also illegal imporation of authentique products which are
sold afterward in stores that do not have exploitation license from the brands.
However, the Vietnamese authority started to be aware of the necessicty of banning the distribution and
manufacturing network of counterfeit luxury goods. The Civil Code of 1995 included articles about the
protection of interlectual property in Vietnam and this subject was discussed when the negociation for
the adhesion of Vietnam to WTO
Although counterfeit problem in Vietnam is not as serious as neighbour countries such as China or
Thailand, it can be a real menace for the growth of luxury market.
40
2. Uncompetitive price due to heavy taxes and tariffs
Imported products generally must incorporate the following elements into the pricing structure:
-
Import agent fees (typically 1 to 2 percent of the invoice)
-
Customs duty, depending on product category
-
Value-added tax (VAT) in the range of 5 to 10 percent is levied on the landed cost when the goods
change title
-
Luxury/Consumption Tax (especially autos, beer, and alcoholic beverages)
Import taxes, value-added tax (VAT), luxury tax/special consumption taxes, customs service fees, and
delivery delays can quickly price products out of the market or cut margins. The fragmented distribution
system creates multiple layers of wholesalers, dealers, and vendors, with markups at each stage.
Moreover, foreign suppliers are often frustrated by their inability to maintain control over the product's
pricing. Random and frequent price fluctuations are common for distributors and wholesalers
Price plays an important role in the consumer's perception of the product. Although Vietnamese
consumers expect to pay a premium for a foreign label or brand, in practice, the actual number of
consumers who are willing to pay the higher price is limited. Most Vietnamese buyers are very pricesensitive. With the abundance of less expensive products in the form of smuggled or counterfeit goods
and “copycat” brands, the competition is keen.
For tourists, it is clear that luxury products in Vietnam are more expensive than other Asian countries,
especially Singapore. The revenues brought buy foreign tourists are very little. Shopping tourist has
always been attractive in countries like Singapore, Thailand, or Malaysia. Tourists only come to
Vietnam for its culture and beautiful landscape but not for shopping. Also, due to the high price, wealthy
local customers prefer to purchase luxury goods when travelling.
VII. RECOMMENDATIONS
Products:
-
The proposed collections have to be as up-to-date as those in Occidental countries. One current issue
of the luxury markets is the gap between local collections and those in Occidental ones. The
customers’ starts losing the trust into the local luxury market and only purchase when they travel
outside their countries, believing they can get the latest trend. The creating of “limited edition” is a
competitive advantage for brands, especially in this area, where the client really sick for being
unique.
41
-
Having a long-term vision as the emergent markets need giant investment (due to undeveloped
infrastructure, distribution channels) therefore the Return on Investment cannot be quick.
Place:
-
Choose geographic emplacement strategic that is adequate to the image of the brands.
-
Controlling the distribution circuit of products and supervise the counterfeit market
-
Choosing a good regional partner in case of association with an intermediary
-
Having a visible, central, and convenient location is indispensible in expanding the brand’s exposure to
its target customers. The lack of prime locations in HCMC is preventing niche/high end luxury
companies from further expansion while creating barriers to entry to new entrants. As a result,
high-end luxury companies are currently expanding in Hanoi as opposed to HCMC.
-
There is a general lack of distinction between “selective” brands and “niche luxury” brands as the
words do not exist in the Vietnamese language. As such, consumers tend to categorize selective and
niche luxury brands into the same segment.
Promotions:
-
Consolidate the communication: Sensitize and initiate the consumers to the culture of consuming
luxuries, including brands unique character, products, services, history, and expertise.
-
The communication and relation are key factors to success that brands should not neglect. The
welcome inside a boutique is very important, especially in Asian culture. The customers should
feel being unique and recognized
-
Communication: Specialized magazines, word of mouth, and events are regarded by niche luxury
brands as the most effective marketing channels to allure consumers. Intensive selection of invitees
list for events is necessary to ensure high attendance rates since a proportion of high-net-worth
individuals prefer to keep low profiles.
-
The majority of high net-worth Vietnamese is considered to be “nouveau rich”, with most unfamiliar
with luxury brands. Education and brand management are critical to success.
-
Vietnamese consumers tend to be influenced by peers, especially friends, family, and celebrities. It is
also a common habit among Vietnamese nationals to observe other people in public places to
become aware of new products and styles.
42
VIII. REFERENCES

Chevalier M. and Mazzalovo G., Marketing et Management des industries de luxes, 2nd edition,
Paris, 2011

Okonkwo U, Luxury Fashion Branding: Trends, Tactics, Techniques, 1st Ed, Palgrave
Macmillan, 2007

Bastien V. and Kapferer, Luxe oblige, Eyolles, 1st edition, Paris, 2011

PRECEPTA, Les groupes de luxe dans le monde, Les défis stratégiques de la globalisation,
Septembre 2007

Ubifrance, 2010, L’essentiel d’un marché

Ubifrance, 2010, Ouvrir un point de vente à Ho Chi Minh ville, Tisserand G el all

Ubifrance, 2011, POLI J., S’implanter au Vietnam

Les nouveaux modèles de distribution des maisons de luxe, Eurostaf, 2005

Asia’s temples of luxury – How consumer behavior will change in the dawning age of
responsibility, Interbrand.

GLOBALTRADE,
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an
Agent
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<http://www.globaltrade.net/international-trade-import-exports/f/business/text/Vietnam/SellingSales-Representitive-Office-Using-an-Agent-or-Distributor-in-Vietnam.html>, 2010.

CROWE HORWATH DTL AUDITING COMPANY, “Vietnam attempts to raise tariffs to
restrict luxury imports”,
<http://www.horwathdtl.com/en-US/news-216/vietnam-attempts-to-
raise-tariffs-to-restrict-luxury-imports-651.aspx>, 2010

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
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
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43
“Understanding
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
LOS ANGELES TIMES, “Vietnam's nouveaux riches fuel luxury shopping market”,
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
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SAIGON
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
VIETNAM BUSINESS NEWS, “Vietnam spends $5.7Bln importing luxury goods in 2010:
MoIT”,
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
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
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
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
VIETNAM LUXURY, “Grand Opening ceremony of the largest luxurious shopping mall in
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<http://vietnamluxury.net/travel/grand-opening-ceremony-of-the-largest-luxurious-
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
VIETNAM LUXURY, “The Garden Shopping Center”, <http://vietnamluxury.net/shopping/thegarden-shopping-center/>, 2010.

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in
Vietnam”,
<http://vietnamluxury.net/property-html/flagging-demand-for-luxury-property-in-vietnam/>,
2010.

VIETNAM BUSINESS & ECONOMY NEWS, “How basic wage increase affects inflation in
2011 remains unknown”, <http://www.vneconomynews.com/2011/04/how-basic-wage-increaseaffects.html>, 2011.

VIETNEWS,
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inflation
set
for
small
rise”,
<http://www.dztimes.net/post/business/september-inflation-set-for-small-rise.aspx>, 2010.

VIETNAM BUSINESS NEWS, “Restraining inflation rate at 17% poses major challenge”,
<http://vietnambusiness.asia/restraining-inflation-rate-at-17-poses-major-challenge>, 2011.

THANH
NIEN
NEWS,
“Inflation
no
barrier
to
luxury
binges”,
<http://www.thanhniennews.com/2010/Pages/20110502162052.aspx>, 2011.

CPP-LUXURY, “Vietnam, among the fastest growing luxury markets worldwide”,
http://www.cpp-luxury.com/en/vietnam--among-the-fastest-growing-luxury-marketsworldwide_1059.html>, 2011.
44

PRLOG, “Luxury travel increasing in Vietnam - Luxury Travel Vietnam Group Reports”,
<http://www.prlog.org/10154685-luxury-travel-increasing-in-vietnam-luxury-travel-vietnamgroup-reports.html>, 2008.

GOLIATH, “Driving consumer behaviour: an analysis of middle-class consumer habits in
Vietnam.”, <http://goliath.ecnext.com/coms2/gi_0199-13570952/Driving-consumer-behaviourRalf-Matthaes.html>, 2010.

VIETNAM BUSINESS FORUM, “Vietnam Is One of the Five Most Lucrative Retail Markets”,
<http://www.vccinews.com/news_detail.asp?news_id=23488>, 2011.

ECC INVEST, “Participate in Vietnam”, <http://www.eccinvest.com/en/vervolg.php?p=129>,
2011.

INTELLASIA,
“Spike
in
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luxury
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goods
bleeds
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
NIELSEN, “Doom or Boom in Vietnam in 2009: What will the global economic tsunami wash
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
NIELSEN, ”Keeping Up with Generation V, One of the World’s Youngest Populations”,
<http://www.acnielsen.com.vn/news/20050401.shtml>, 2005.
45
APPENDICES: Luxury Brands and Distributor in Vietnam
Distributo
r/
Importer
Section
Brand (s)
Communication/
Marketing
City
Store (s)
An Tran
Accessories
specialized
in eye wear
Brands of the Italian group SAFILO,
Bulgari, Roberto Cavalii, Prada,
Versace, Gucci, D&G, Fendi, Giorgio
Armani, Max Mara, Ray Ban, Police
Distributor of leather bags from Just
Cavalli, Missoni, C&C, Exit
Fidelity program with
price deduction.
Events: fashion shows,
PR and pubs in
magazines
HCM
Cosmetics,
Perfume,
Tourism,
Wine
Exclusive Importation, Distribution:
Annam Fine Food:
The Warehouse (wines Baron
Phillipe de Rothschild, Joseph
Drouhin, M.Chapoutier, Georges
Duboeuf, Louis Rosderer, Antinori)
Annam Prestige (Lancaster and Coty
brands: Marc Jacob, Kenneth Cole,
Lancaster, Sarah Jessica Parker,
Chopard, Davidoff, David Beckham,
Adidas, Lulu Castagnette, Aspen,
Jovan, Joop!) ,
Hospitality Equipment (Schoff
Zwiesel)
Public Relation
Own distribution
channels:
EYEWEAR HUT,
SUNGLASS, OPTIC
One luxury
eyewear
boutique in Park
Hyatt (2005)
A lot of prestige
locations
Caravelle Hotels,
Diamond
Department
Store
Metropole
Arcade (Cartier,
Montblanc)
Haut-de-Gamme and Luxury brands:
Calvin Klein, La Neige, OPI,Tony
Wear, The Undershop, Red Earth,
Guess, Polic, Zinth, Swarovski,
Lancel
3 parfumeries called Zen : Lotita
Lempicka (exclusive), Guess,
Lancôme, Cartier, Guerlain,
Christian Dior, Calvin Klein, Chanel,
Boucheron, YSL, Versace
-Hire designers for the
merchandising in sale
locations.
-Events, advertising in
local magazines,
“echantillon”, partner,
“atelier de maquillage”,
affichage, celebrity
endorsement
(Ex: Lancel was launched
Importer,
Distributor
Apple
Tree
Importer,
Distributor,
Fabricator
C&T
Group
Distributor
Cosmetics,
Leather,
Fashion
Accessories
HCM
HN
HN,
HCM,
Hai
Phong
45 locations
through Vietnam
Lancel: Parkson
HCM and Hai
Phong
Year
of
Establi
shmen
t
1990s
Empl
oyees
Came
to VN
1992
1992
Customers
Notes
Middle to Upper
class , local
96% of international
eyewear brands market
3000
Perfumes:
sophisticated,
young active
women (executives
in Vietnamese and
internationals
enterprises)
French company
implanted in Vietnam,
started in tourism then
real estate and
distribution
Tourism, Leisure:
Exotissimo, Emeraude
Classic Cruise, Kamu
Lodge
Real Estate : Archetype,
Imo Development,
Bamboo Factory,
Lacquer Factor
550
Majority of clients
are women
Started with the name
Saigon Trade Co., and
transformed to “societe
par actions” in 2000
DAN
JEWELRY
Jewelry
-Alphana: high-income customers
($500-$ 100 000/ ring)
-Dan: wealthy people with different
collections of precious and semiprecious stone
($300 - $60 000/ ring)
Fashion,
Leather,
Cosmetics
Exclusive of Salvatore Ferragamo,
Lancôme (launched 2006 at Parkson
and Diamon Plaza), Bally…
Decoration,
“art de
table”,
fashion
-Decoration: Christofle (exclusive),
Daum, Wedgwood
-Bedroom: Sealy, Santas, Frette,
Schlossberd
-Bathroom: Spirella, Alessi
-Spa: Mt.Sapota
-Kitchen: Siematic, Leifheit,
Peugeot, Afi, Siemens, Rubbermaid
-Epices: Mc Cormick
Fashion: FCUK, Hermes (watches)
Furla
Fabricator
Distributor
DUY ANH
Fashion
and
Cosmetics
CO. LTD
on 2007 at the Opera
Hoc Chi Minh with
invitees from
Vietnamese authorities,
medias, and represents
of Richemont Asia)
Merchandising: group of
4 internal designer +
freelance
Using principally PR
activities: events
cocktails
Don’t use brand
embassadors
Fidelity card from $5000
for price reduction
HCM
2 boutiques:
DAN JEWELRY
(Caravellle Hotel)
and ALPHANA
(Dong Khoi
street)
Written press articles.
HCM
and
Hanoi
Parkson,
Diamond
Department
Store
-Written articles.
HCM
Diamond
Department
Store, Parkson,
Zen Department
Store
-Relation de presse
-Events
-Direct marketing:
emails, phone calls to
HCM
et HN
3 locations
-Diamond Plaza
(HCM)
-Hilton Hotel
Weeding rings
purchased by men,
mother-in-law
Payment in liquid
Best seller: rings
and earrings
Sale increase from
October - Mars
25 to 60 yo, 60%
locals, most
foreigners are
Australians
1994
Importer
Distributor
EIGHT
LIONS
Importer
Distributors
GOLDEN
SUMMER
Franchise
Leather
and
accessories
2 types of
customers:
- “particuliers”
(important sale)
-Hotelier industry
2000
3 targeted
customers: locals,
expats, tourists
-Hanoi: “officiels”,
Imported diamonds from
Belgium and Hong Kong
The firm wishes to
diversify its activities by
distributing
leather/eyewear
products
Short-term goal: to
become the national
incontrovertible in the
Vietnamese jewelry and
accessories market
-Lancôme: Late arrival to
Vietnam and already had
40% of cosmetics market
-Developing in luxury
duty free sector as the
husband of the
chairwoman is the
president of IMAN PAN
PACIFIC (main actor in
duty free)
-Private firm, American
capital
Started being a
consultant, and
developed into
distribution retail in
privileged customers
-Service of “entretien” of
bags
(HN)
-Opera view
(HCM)
KIM YEN
Trading
Co. LTD
Fashion,
Cosmetics
-Lingerie: Aubade, Jenna, Huit
-Cosmetics: Decleor (exclusive),
Carita
-Advertising, brochures
HCM
-Carita/Decleor: 2
beauty salons, 2
corners at
Diamond Plaza
and Parkson
-Aubade: 2
boutiques and 1
corner at
Diamond Plaza
LA NEIGE
Cosmetics
La Neige is a Korean brand of
AMORE group
-Big-format visuals
provided from mother
company with Korean
models.
-Free product sample,
fidelity program with
80000 members (2007)
HCM,
Ha
Noi,
Hai
Phong
, Nha
Trang,
Hue
-50 locations : in
department
stores, 4-5 in
every big cities
Exclusive :
-Watches: Bulgari, Gucci, Cartier
(for both Vietnam and Cambodia),
Montblanc, DKNY, Armani, Fossil,
Rolex, Chopard
-Leather: Cartier, Montblanc
-Stationeries : Montblanc, Cartier
- Magazines and affiches
- Direct marketing
- Relation de presse
Importer
Distributor
ONE
WORLD
Distributor
HCM
HN
OPENASIA
Group
Distributor
Fashion,
Accessories
Leather
Cars
-Exclusive distributor for Louis
Vuitton (1999), direct management
of the brand in Vietnam
-Leather: Hermes (2007)
-Lingerie: La Perla
A lot of Public Relation
HN
HCM
A lot of prestige
locations in
Vietnam
-Carevelle hotel,
Diamond
Department
Store
-Metropole
Arcade (Cartier
and Montblanc)
The firm has a
luxury
commercial
arcade of
1000m2 in the
1995
70
1988
1998
men spend more
than women
-HCM: business
men, private
entrepeneurs
-Women >30 with
high purchasing
power
-Past: 80% expats.
Now: 70% locals
-Sales peak on
March for
international
women day
-Men rarely
purchases lingerie
for their wives
- Sales peak from
September to Lunar
New Year.
Important profit
made by gifts
purchasing
- Active women 2545 yo
2004 with careful study
of Vietnamese market
- Only 2%
vietnamese
purchase
occasionally Cartier
- Average age : 2830, most are men
- 20% purchases are
for glfts
-Vietnamese
representation of
Singapore firm Luxury
International PTE LTD
-From 2010, all products
range of Cartier are
available in Vietnam
Rich Vietnamese
that gained from
stock market
Hongkong holding firm,
created by French
“actionnaires”
The firm also include 12
firms (Openasia
-Under the control of
C&T Corporation
- Higher price compared
than products in Korean
due to heavy imported
taxes
-Sales are made more in
HCM than HN
-Jewelry: Korloff
-Cars – exclusive : Chevrolet, Volvo,
Audi
-Entertainment : Bang&Olufsen
(exclusive)
-Owner of Catherine Denoual
Maison (linge maison brode)
distributed in “reseaux selectifs”
(Lane Crawford in Hong Khong,
Harrod’s in London) and one own
store in HCM, and Gaya(concept
store 450m2 in HCM)
Editor of luxury magazines
-Gourmet Saigon (mini guide of
local Michelin in English once a
year) and -Rest Relax Magazine
(specialized in spas and salons)
-Thoi Gian (Times) – Jewelry and
Watches, used for references to
professionals of the sector
-Doi Moi (Reforme) to introduce
luxury brands to Vietnamese
consumers within 6 sectors fashion,
accessories, cosmetics, decoration,
lifestyle, jewelry (2007)
300 international brands : haut de
gamme and luxury
-Fashion: Soda Exchange, Baleno,
Eternity…
-Perfumes, Cosmetics: DTNY,
Tommy Hilfiger, Estee Lauder,
Shiseido…
ORIENTAL
LTD
Editor
PARKSON
Co.LTD
Agent,
wholesale,
distributor
PHUONG
PHAT
Co.LTD
Importer
Distributor
Perfumes
Cosmetics
Imported about 2000 references
per year, distributed in 9 ParisFrance “parfumeries” : Hugo Boss,
Lacoste, Gucci, Dunhill, Escada,
Valentino, Dolce Gabbana, Jean
Patou, Montblanc, Anna Sui, Laura
Biagotti, Giorgio Beverly Hills, Max
Mara, Kenzo, Givenchy, Make Up
best street in HN
and 260m2 (3
boutiques in
Opera Center HN
(Korloffm Kenzo,
La Perla)
Partners, Openasia
Capital) and consultancy
for luxury brands to
enter Vietnamese
market
-Luxury activities only
started from 2005
although Louis Vuitton
was already introduced
in 1999
-Bicultural employees
Pacific Place
(Band&Olufsen)
The magazines are
available in salons of
airlines companies,
clubs, private suites in
hotels, luxury
restaurants in HCM and
HN
-Magazines
-Promotional and fidelity
programs with multiple
benefits: reduction in
restaurants, clubs and
coffees; accumulating
points for gift voucher
-Events: party for special
member 5 times a year
-Local magazines
-Posters
-Advertising in cinemas
-Launching events (for
example Kenzo Amour
was launched with a
luxury dinner on the
bank of Mekong river)
2003
HCM,
4 locations in
2 opened in 2005
(17 000m2) and
2007 (24000 m2)
HN,
1 opened in 2008
Hai
Phong
HCM,
HN,
Bien
Hoa,
Can
Tho,
Quy
Nhon
1 opened in 2007
(18 000 m2)
- Paris-France
perfumeries are
presented in
principal city of
VN :
-Multi-brands
st
th
stores (1 and 5
District) and
20
2005
in VN
Vietnamese firm with
mother company in
Singapore that offer
services: product
launching, POS opening,
promotional events
-Sales peak in
women days (8
Mars and 20
October
-70% locals, 20%
expats and 10%
tourist
-70-80% women
-Malaysian chain of
Department Store,
belongs to Lion Group
(1987)
-The firm plans to open
up to 10 locations by
2012
Peak sales are in
Women days,
Valentines, and
Christmas
-Young Vietnamese
from wealthy
families; >24
(university
2 divisions:
-Phuong Phat
(distributor,importer)
-Paris France (chain of
luxury “perfumerie”)
PRESTIGE
VIETNAM
Importer
Distributor
THUY LOC
Trading &
Construction
Co.LTD
Importer
Distributor
Leather,
Cosmetics,
Jewelry
Perfume
Cosmetics
Forever, Carolina Herrera, Paco
Rabanne, Ninca Ricci, Burberry, St
Dupont, Paul Smith, Azzaro,
Moschino, Alessandro Dell’Acqua,
Salvador Dali, Morgan, Cartier,
Sonia Rykiel, Balmain, Mauboussin,
Jacomo, Lalique, Marina de
Bourbon, Leonard
-Leather: represents Vietnamese of
Longchamp (2004)
-Jewelry: Misaki, Zeaders, Hot
Diamond
-Perfume: Evaflore, Ulric de Varens,
Morgan
-SHISEIDO (Exclusive from 1997),
L’Occitane, Clarins (Management,
from 2004), Iseey Miyaket and Jean
Paul Gautier (2006), Cle de Peau,
Esprit, Thierry Mugler, Bulgari
…
- Written articles
- Public relation
- Promotion Longchamp:
big fashion magazines,
HTV7 television Channels
has broadcasted a
presentation of the
brand in the program
LAM DEP (How to be
beautiful)
-Magazines, posters,
press relations, product
launching events
-Occitane : VIP card,
Occitane Club with
reductions, invitation,
free spa, sample…
Hanoi
-Counters in
department
stores in cities
and provinces
-Another
perfumery called
Winchai 63
-Longchamp: 1
counter at
Diamond Plaza,
flagship store
next to Hoan
Kiem lake (center
HN)
-Misaki- 6
locations:Parkson
(HN,HCM, HP)
and Diamond
Plaza
- Zeaders:
Diamond Plaza
(HCM)
-Hot Diamonds:
Parkson, Verby
Plaza (HN)
- 68 boutiques/
counters in
Vietnam
-20 Perfumeries
concept HAL’S in
2 countries
- Beauty Salons:
Clarins (7) ,
L’Occitane (2025), QI Spa of
Shiseido
graduated) , 30 yo
and business men
-Tourists (mostly
Australians) : 30%
2001
1994
60
Created by a Hungarian
and Vietnamese
-Sales peak from
November to Mars
-High officials or
executives of
foreign companies
-Customers are
concentrated only
in HCM and HN
-Most consumers
are women even
men accounted for
40% of sales of Spas
and 12% of
Cosmetics
-Private company, leader
of Vietnamese market
with 60% in Perfume,
Cosmetics market and
68% in Spa and Beauty
Salons
- Co-investor with
KhaiSilk (vietnamese
luxury silk) in real estate
project SaiGon Paragon –
luxury residential and
commercial center
(2008)
-