KITA News and Reports
  • Pay Attention to Population Changes Every 7 Years in Vietnamese Consumer Market
    2017-07-12

    Pay Attention to Population Changes Every 7 Years in Vietnamese Consumer Market

     

    - Core population groups change every seven years, need to develop services and products targeting the population in marriage and childcare period aged 25 to 34 -

     

    A report analyzing Vietnam, a promising market of the future, until 2050 from a demographic perspective and suggesting long-term strategies to enter into the country has been published and received much attention.

     

    The Institute for International Trade (President, Shin Seung-kwan) of the Korea International Trade Association published a report titled "Diagnosis of Aging Trend in Vietnam and Prospect of Demographic Changes and Consumption Market." The report diagnosed the expected population changes until 2050 in order to predict the future `demand' and suggested the core population groups that will emerge in every seven years in the future and the promising fields to target those groups.

     

    According to the report, Vietnam has entered the aging society, the first stage of aging, this year and it is expected that the country will turn into "super-aged society" in which the population of over 65 accounts for 20 percent of the total population in 2048, in 31 years from now. This is the fifth fastest rate of aging in the world following Iran, Korea, Thailand, and Japan. It is anticipated that the changes in the core population of Vietnam in every seven years in the future will be prominent and it will have a significant impact on the changes of consumer market.

     

     

    When looking into the changes in the population of Vietnam until 2050, the population of 25-34 years old, who belong to the marriage and childcare period, will be the largest until 2024, and the demand for marriage, infant, life and home appliances products will be high. Afterwards, until 2032, there will be an increase in the number of middle-aged group with teenage children, and the youth clothing, entertainment goods and other family restaurants and leisure-related industries will be promising during this period. Until 2040, the increase of the number of people aged 45-54 and over 65 will be prominent and the health and hobby industries for these generations are expected to grow significantly.

     

    Meanwhile, the total population of Vietnam is expected to surpass 100 million in 2025 with the increase of the birthrate as well as life expectancy. It is forecasted that the country’s population will continue to increase until 2050 and the youth population (aged 0 to 14) will exceed the elderly population (65-year-old or older). The working age population (aged 15 to 64) will constantly grow until 2037 and the proportion of this group will reach 61.7 percent in 2050, which is bigger than that of other countries. Japan is well known for its labor shortage due to low fertility rate and aging population. The number of elderly people in Japan has already exceeded the youth population in 1997 and the proportion of working age population is only 59.9 percent. Compared to Japan, the situation in Vietnam is relatively good.

     

     

    Lee Eun-mi, a senior researcher at the Institute for International Trade, said "When we predict certain countries’ future consumer markets, considering the changes in their population is a process of working on rough sketches of the countries." She added “It is important to develop strategies considering market conditions at the micro level, for example, the level of income by region and ages and the changes in the way the consumers gain products’ information or the places where they purchase goods.”

     

     

    In fact, Vietnam is known to have a different minimum wage from region to region and the income gap between the urban and rural areas is significant. In terms of distribution markets, traditional markets dominated the country but in recent years, the number of modern style markets such as large-scale supermarkets, convenience stores has been growing in the major cities and more consumers are purchasing goods through online malls and TV home shopping. In addition, Vietnamese consumers used to acquire product information from face-to-face communication with their family and friends. Recently, however, information exchanges using social media (SNS) such as Facebook have been active, especially among the younger generation.

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