Vietnamese domestic market like ‘active volcano’

Hanoi, the capital of the Socialist Republic of Vietnam, was a wild night. The entrance to large shopping centers such as Vincom Mall was made by people and motorcycles. Dressed in a small, cute red Santa suit, the child looked at the giant Christmas ornament with his hands in his parents’ hands. As if he forgot that Christmas was a work day, the young men sat down to sip beer for three to five small chairs unique to Vietnam.

Christmas Eve in Hanoi is similar to that of Korea decades ago. Nowadays, Christmas carols have disappeared from the streets due to copyright issues, but the streets of Seoul, which had been Christmas since the 1970s and early 2000, were filled with expectations and excitement.

In the days of military dictatorship, where everything was like darkness, Christmas Eve was the only day without curfew. Hate for poverty, young people who left their hometowns and made money like money melted their hardness at least under the city’s colorful neon signs and sparkling Christmas decorations.

Although there are gaps in time, the Christmas landscapes of Vietnam and Korea have much in common in that they show the limitless possibilities of developing countries that have entered the industrial society in earnest.

The self-sufficient labor force in rural areas flocked to the city and transformed into an “export warrior”, which led to an explosion of domestic consumption based on private consumption.

Vibration of private consumption is indispensable to Vietnam’s GDP growth rate of 7.03% (estimated) this year, after breaking the forecasts of global analyst firms. Vietnam’s unemployment rate is 2.2% this year, which is near full employment.

It is difficult to explain in Vietnam’s official statistics that the consumption power of big cities like Hanoi and Ho Chi Minh is around USD 3000 per capita. Luxury apartment complexes are packed with luxury cars such as Porsche, Rolls-Royce and Mercedes.

There are no lobsters that cost $ 300 for a dog, so they can’t sell. Due to the lack of deep-sea fishing and the lack of refrigerated and frozen distribution infrastructure, Vietnamese seafood is one of the most expensive axes in Southeast Asia.

Nevertheless, 80 percent of Korean flounder imports are consumed by local Vietnamese. Recently, as the wine market is growing rapidly, it is predicted that expensive wine craze that hit China 10 years ago will come to Vietnam.

A shortcut to understanding Vietnam’s consumer culture is to see the difference between pay and income. The salary pays less than half a million won for Korean money, while rolling up luxury cars, and the upper class living in expensive houses are numerous.

Doctors belong to the National Hospital, but there are quite a few who use their homes as private clinics. Under the name of “socializing,” the state often introduces expensive medical equipment from a private company for a national hospital, and doctors often pay for their shortages. The key is that the government allows each individual to make up their income according to their status.

Bureaucratic societies alone fill scarce wages through symbiosis with private companies. An official from a large company said, “The officials who are involved in firefighting, taxation, environment, and safety are regularly surveyed, and each time they give a kind of paralysis through the agency from 500,000 to 10 million dongs.” It may be used, but it is often used as a kind of public fund for meals and expenses for each ministry. ” This means that if an individual wears too much money just for his own benefit, he punishes them for corruption.

It is also common among ordinary people to exchange cash as a gift. For example, suppose an acquaintance helped your son get a job. In this case, it is common sense in Vietnamese society to give an acquaintance about 10% of his son’s salary for several months. In Korea, the boundaries between bribes are vague. The fact that the concept of family community exists in a significantly expanded form is also one of the factors that fill the gap between pay and income.

A bank official said, “I asked a female employee in a hurry to ask for a loan, and she told me that one of my uncles was there to help me because I was in a difficult situation.” In Vietnam, it is still common to take care of the household. . In downtown Hanoi, where traffic is heavy, it is not easy to see the hard-working women who are going to work on and off the motorcycle.

Based on per capita national income, these days in Vietnam are similar to those in Korea in the 1980s. The restructuring of the industrial structure from primary to secondary and tertiary industries is at roughly $ 3,000 GDP per capita.

There is still a lot of problems to be solved in order for Vietnam not to fall into the trap of middle countries and to raise the per capita national income to more than $ 30,000, about 10 times the current level. Key challenges include: addressing environmental issues for sustainable growth, efficient government operations through transparency, and how to distribute over-intensive resources such as real estate to manufacturing.

Although there are many obstacles to overcome, the domestic market of nearly 100 million is a key factor in brightening the future of Vietnam. In this regard, it is democracy that Vietnam is better than Korea. Following the precedents of other developed countries, Korea actively implemented its policy of birth control in the 1970s and 1980s when the population grew rapidly. The result has been realized in the disaster of the current population cliff. Vietnam also carried out family planning until 2017. Then, last year, the decision was made to completely change the paradigm.

The birth rate has fallen to 2.0 since 2005, when the Vietnamese government has been campaigning for two children for decades. Recognizing this problem, the Vietnamese government is completely shifting the framework of population policy to the concept of population development and population dividend.

The theory of population development is in line with the expression “population dividend”. The idea is that a person’s development is like a company’s stock, and that individual development is like a country’s dividend. To this end, the Vietnamese government will focus on improving the quality of the population, including education and health.

The Vietnamese government’s goal is to increase the population, which is currently 15.64 million (15th in the world) to more than 140 million, but to achieve qualitative expansion as well as qualitative improvement. In addition to Hanoi and Ho Chi Minh City, the goal is to cultivate regional hub cities and spread the population. Binh Duong, 30 km from Ho Chi Minh District 7, is a prime example. As the industrial complex enters, it is growing into a new consumer city.

This year, South Korea’s investment in Vietnam rose to the top. But the strategic pavilion to preoccupy the huge domestic market in Vietnam is not yet visible. Regionally, the focus is only on existing large cities such as Hanoi and Ho Chi Minh City. Regarding the domestic market, a Vietnamese expert made an interesting proposal. Korea already has a great test bed. “Vietnamese daughter-in-law” and their children in Korea. If we can find what works for the Korean-Be family, how can we come up with solutions for the domestic market in Vietnam?

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Hanoi, the capital of the Socialist Republic of Vietnam, was a wild night. The entrance to large shopping centers such as Vincom Mall was made by people and motorcycles. Dressed in a small, cute red Santa suit, the child looked at the giant Christmas ornament with his hands in his […]