How much money do Vietnamese spend on branded goods?

Vietdata's report on the luxury goods market in Vietnam shows that multi-brand distribution businesses and exclusive single-brand distribution units in Vietnam in 2023 all shared a sharp decline in revenue compared to 2022.

However, looking at the sales of these units, it is easy to see why Vietnam is still considered a potential market for the luxury goods industry, as the number of middle-class people and super-rich in Vietnam is increasing rapidly.

Among exclusive distributors in Vietnam, Chanel has the highest revenue with nearly 1,900 billion VND, surpassing Louis Vuitton, which has dominated the leading position in the Vietnamese market for several years. However, compared to 2022, Chanel's revenue still decreased by 13.6%; profit also decreased sharply by 51%.

This brand currently owns 6 exclusive boutiques in Vietnam, located in prime locations in the two largest cities of the country, Hanoi and Ho Chi Minh City.

From the top position in revenue, Louis Vuitton last year fell to second place with nearly 1,800 billion VND, down 22.5% compared to the previous year. The brand's after-tax profit also dropped sharply by 38%. Notably, Louis Vuitton only owns 2 boutiques in Vietnam and is still considered to have the strongest appeal to users when competing on par with rivals in the luxury industry.

Christian Dior recorded better business results last year than many other exclusive distribution businesses. Revenue decreased by only 9.5%, reaching 1,500 billion VND and this brand had the highest after-tax profit in the exclusive brand distribution segment in Vietnam.

Christian Dior currently owns the most stores, spanning Hanoi, Hoi An, Ho Chi Minh City with 8 locations that always attract a large number of shoppers.

Gucci, with a smaller scale, also earned about 750 billion VND, down about 250 billion compared to 2022. In the luxury goods market, Gucci was the unit that recorded the sharpest decrease in profits, with a decrease of up to 77%.

In Vietnam, Gucci has 3 stores in Hanoi and Ho Chi Minh City, including 1 store in cooperation with Adidas.

Two smaller companies with only one store in Hanoi, Prada and Ermenegildo Zegna, have also started to make a profit, with each brand's revenue of about VND200 billion. Of which, Prada is highly appreciated for its effective cost control and appropriate changes in business strategy, moving from a loss in 2022 to a profit.

These revenue figures are only updated for units that exclusively distribute one brand, not including large enterprises and corporations that distribute multiple brands in Vietnam such as Tam Son International Joint Stock Company, which is distributing 31 famous international brands: Hermès, Bottega Veneta, Saint Laurent, Kenzo, Boss, Hugo, Marc Jacobs, Patek Philippe, Vacheron Constantin, Chopard, Bang & Olufsen, Bernardaud, Lalique, Rimowa, Alessi, Hanoia... with a system of 109 stores selling and displaying products.

DAFC and ACFC are 2 of 3 units distributing a series of luxury fashion brands belonging to the Inter-Pacific Group (IPPG) of businessman Johnathan Hanh Nguyen, with more than 350 stores distributing more than 80 famous brands.

Welcoming the new wave of consumption, at the end of 2023, DAFC opened a series of stores distributing famous Italian brands such as Balmain, Monblanc, Moschino and Moschino Jeans, Gianvito Rossi and Alessandra Rich (UK). These are brands that are part of DAFC's brand portfolio rejuvenation orientation, targeting the young and dynamic GenZ customer base.

In addition, DAFC has just signed distribution contracts with a series of other famous European brands such as Frank Muller, Stefano Ricci...

According to Statista, in the Vietnamese market, the luxury goods industry will bring in 992.2 million USD in 2024.

According to World Data Lab, in the list of 9 Asian countries forecast to have the largest number of people joining the middle class by 2024, Vietnam ranks 5th, with 4 million people. The middle class in Vietnam accounts for about 17% of the population and this rate is expected to increase to 26% by 2026.

The organization defines middle class people as those who spend at least $12/day in 2017 purchasing power parity.

According to Knight Frank, by the end of 2022, the number of Vietnamese people with net assets of over 30 million USD had reached 1,059 people. It is forecasted that by 2027, this number will reach 1,300 people. And the number of people with assets of over 1 million USD is also forecast to increase by 173% in the period 2017 - 2027.

This explains why the wave of luxury brands in the world continues to flock to Vietnam from 2023. For example, Mont Blanc and Balmain Paris have opened their first stores at Trang Tien Plaza; Devialet also set up its first store on Trang Tien Street - Hanoi.

A series of other big brands such as Victoria's Secret, Foot Locker, Maison Margiela Paris, Coach, Marimekko, Karl Lagerfeld, Come Home... also appeared for the first time at Lotte Mall West Lake Hanoi.

At the beginning of 2024, the three "kings" of the luxury industry, Cartier, Rene Caovilla and The Hour Glass Opera, simultaneously expanded in Vietnam.

Notably, Cartier opened its first flagship store in March 2024 at Union Square Shopping Center in District 1, Ho Chi Minh City, covering 570 square meters and 2 floors. The space in the Cartier store is divided into many display areas corresponding to product lines and industries, providing customers in Vietnam with the most premium experiences.

According to a recent assessment by Savills, the luxury goods market has bottomed out and is showing positive recovery thanks to the return of international tourism and the trend of decreasing inflation.