Vietnam . Burgeoning Market Opportunities In Vietnam By Tina Phan Hochiminh City Branch Office Hong Kong Trade Development Council. ECONOMIC OUTLOOK. (The first 9 months of 2006) · GDP Growth rate 7.84% · Exports USD 29.4 billion 24.2%
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Vietnam Burgeoning Market Opportunities In Vietnam By Tina Phan Hochiminh City Branch Office Hong Kong Trade Development Council
ECONOMIC OUTLOOK (The first 9 months of 2006) · GDP Growth rate 7.84% · Exports USD 29.4 billion 24.2% · Imports USD 32.7 billion 19.3% · Trade deficit US$ 3.357 billion 11.5% · Consumer Price Index 5.1 % · FDI (overall) US$ 5.15 bil 25.9% - 580 new projects with US$ 3.85 bil capital, the rest has gone into existing projects. - From Hong Kong: US$ 636 million with 14 projects
Burgeoning Market Opportunities In VN • Retail Market • Mobile phones • Real Estate
RETAIL MARKET • One of the highest GDP growth rate in Asia – 7.84% • Large population of about 84 million • 70% of population under 35 • Recent accession to WTO
RETAIL MARKET (CONT.) • Higher Purchasing Power • Consumers are young, very brand-conscious and have aspiration • Habit change: • From wet market -> convenient stores, supermarkets or department stores. • More spending on entertainment reserved. 4. Insufficient supply
RETAIL MARKET (CONT.) Not only growing from a low base, but also increasing demand as a result of: • Strong growth of tourism • Rising urban population, specially urban middle class (has grown by 24% since 1999) • Burgeoning middle class • Account for 55% of the VN’s urban population • Rising income (from 2000-2004, HCMC GDP per capita increased 32% from US$1,365 to US$1,800 – VN: US$640)
RETAIL MARKET (CONT.) • Female consumers: • Beauty products • Branded fashions & Accessories • Male consumers: • Personal beauty products (seeing 9% year-on-year growth in 2005) • Home entertainment & Technology
RETAIL MARKET (CONT.) • Baby care products (whopping 19% in 2005): • 1 mil plus babies born annually • 22% of urban families having children under the age of 4 => Additional spending is not only spending on self, but on the future of their children
Opportunities for HK supplies Expansion and development of shops with domestic and international brand-name products for sale. Demand is increasing and higher than supply. With lots of potentials, retail market is in the way to development.
Mobile phone Market 3 GSM service provider 3 CDMA Service Providers 8 million subscribers - 95% use GSM mobile phones - 5% use CDMA mobile phones Service Fee gradually becomes lower, due to fierce competitions among service providers
Mobile phone market • The number of subscribers is increasing dramatically • Market Segments: • Price < 100 USD : Very Simple Mobile Phones • 100 USD – 200 USD : Normal Mobile Phones • 200 USD – 300 USD : Average Mobile Phones • 300 USD – 500 USD : Advanced Mobile Phones • Price > 500 USD : Deluxe Mobile Phones
Mobile phone market • Superstores engage in retailing mobile phones business is arising in big cities such as HCMC, Ha Noi, etc. • Setting up effective distribution channels and attractive price strategy are the key points to position new brand on the market • Newcomers should introduce models with special features in terms of specifications
Vietnam’s real estate market perspective • Vietnam’s real estate market: high expansion potential • Rapid urbanization • Rising middle class • Growth of foreign investment
Vietnam’s real estate market perspective • Vietnam has become an official WTO member. • New safeguards : Law on Securities, Law on Enterprises, Law on Investment, Law on Real Estate Business … • Real estate markets in other Asian countries have almost saturated; Investment in these markets may not result in high rate of returns.
Vietnam’s real estate market perspective Residential Market • Rapid population increase puts pressure on residential housing in large cities • Greater demand for high-quality living space.