According to real estate agency Savills Vietnam, many luxury brands have targeted Vietnam as part of their market diversification strategies. Although China is still a critical market for the global luxury retail sector, Southeast Asian countries, including Vietnam, are emerging as new destinations for luxury brands. Due to the Covid-10 pandemic, many have come to realize that they need to diversify their portfolios and Southeast Asia is emerging as a compelling market.
Besides Thailand and Singapore, Vietnam is highly evaluated because of its growing economies and expanding high-net-worth (HNW) populations, as well as the attitude and shopping habits of the young middle class toward premium goods.
According to Statista, the luxury retail market in Vietnam is predicted to generate around USD 960 million in 2023, with a 3.23% annual growth rate forecasted for the period 2023-2028. The surging consumer demands are supposed to be the main motivation for luxury brands to enter the country.
In addition, a growing number of wealthy travelers are now visiting the country to enjoy luxury hotels and branded apartments, adding a reason for luxury brand owners to explore the market. The creation and enhancement of the new premium retail pitches are also being aided by new hotels opened by luxury firms.
Dior, Louis Vuitton, Tiffany & Co., and Berluti have recently been spotted on the main streets of Hanoi. In addition, the city also welcomes many global hotel brands, such as Four Seasons, Fairmont, Waldorf Astoria, and Ritz Carton, transforming Hanoi into a luxury hub of the country.
According to the World Bank (WB), Vietnam’s GDP is likely to grow 6.3% this year, despite the global stagnation. In the 2021-2030 period, the national master plan targets an average GDP growth of about 7% each year. By 2050, GDP per capita at current prices will reach USD 27,000-32,000.