Understanding Vietnam’s Middle Class: Size, Spending Patterns, and Opportunities for Businesses

Posted by Written by Anisha Sharma Reading Time: 6 minutes

Vietnam aspires to attain upper-middle-income status by 2030 and to achieve high-income country status by 2050. The middle class in Vietnam is expected to expand to 26 percent of the population by 2026, up from 13 percent (approximately 13 million people) in 2023, creating significant opportunities for businesses.

Economic trajectory of Vietnam

Vietnam’s ascendance in the global supply chain has been pivotal to its economic trajectory, driven by a robust manufacturing sector and burgeoning exports. From 2012 to 2022, Vietnam’s exports expanded at an average annual rate of 12 percent, significantly outpacing the global average growth rate. In the first half of 2024 alone, national export turnover is estimated to reach US$190.08 billion, marking a 14.5 percent year-on-year increase as global demand rebounds, according to the Vietnam Trade Promotion Agency and General Statistics Office.

Major multinational corporations, such as Samsung, Google, Microsoft, Apple, Nike, Adidas, among others, have increasingly integrated Vietnam into their supply chains as part of diversified strategies like “China plus one.” Foreign direct investment (FDI) has surged, reaching US$11.07 billion in the first five months of 2024, reflecting a 2 percent increase compared to the same period in 2023. Manufacturing and processing sectors led in capital investment, with over US$7.43 billion, signifying a robust 11.9 percent year-on-year growth. The property sector followed closely with nearly US$1.98 billion in investments, marking a substantial 70.8 percent increase year-on-year.

Vietnam’s strategic infrastructure investments, constituting approximately 6.0 percent of its GDP—higher than the ASEAN average of 2.3 percent—have bolstered its position as a global manufacturing hub. These investments, coupled with Vietnam’s numerous free trade agreements, have fostered a conducive environment for manufacturing and trade growth.

Economic reforms have further stimulated expansion by promoting trade liberalization, private enterprise, and increased foreign investments. Since 1986, Vietnam’s economic transformation has been noteworthy, shifting from a centrally controlled economy to an emerging market. The ‘Renovation’ policy (Đổi Mới reform) initiated in 1986 catalyzed economic reforms and integration with global trends, transforming Vietnam from one of the world’s poorest nations into a lower middle-income country.

In September 2023, the United States entered into a comprehensive strategic partnership with Vietnam, underscoring the nation’s growing global stature and economic influence. This partnership, alongside strong economic growth and expanding job opportunities, has contributed to the rapid growth of Vietnam’s middle class, solidifying its emergence as a dynamic economic force in the region and beyond.

Between 2002 and 2022, Vietnam’s GDP per capita increased 3.6 times to US$4179, while the poverty rate declined from 14 percent in 2010 to 5.7 percent in 2023. Per the World Bank, Vietnam’s per capita income (current US$) reached US$4,346.8 in 2023.

Vietnam’s master plan for 2021-2030 outlines ambitious goals to transform into an upper middle-income country by 2030 and a developed, high-income economy by 2050. Key objectives include achieving an average annual GDP growth rate of 7 percent from 2021 to 2030 and increasing GDP per capita to approximately US$7,500 by 2030.

The plan emphasizes spatial organization for national development, promoting economic balance, and enhancing resilience through dynamic economic zones and modern infrastructure. Environmental sustainability is prioritized with goals for low carbon emissions and achieving “net zero” emissions by 2050.

Definition and characteristics of the middle class in Vietnam

While the middle class in Vietnam lacks a standardized definition due to varying income thresholds and a dynamic economic landscape, the World Data Lab typically defines the middle class as individuals with daily expenses exceeding US$12.

In the first quarter of 2024, the average monthly salary for paid workers and employees rose to approximately VND 8.5 million (US$334.42), per Statista, marking a notable increase compared to the preceding quarter. During this period, the labor force comprised around 52.4 million people. In 2023, the average monthly income of Vietnamese workers saw a year-on-year increase of VND 459,000 (US$18.06), equivalent to 6.9 percent compared to 2022. By the end of 2023, this average income reached approximately VND 7.1 million (US$279.34). According to reports from the General Statistics Office, male workers earned an average monthly income of VND 8.1 million (US$318.68), while female workers earned VND 6 million per month (US$236.06). (US$1=VND 25,417.03).

With a median age of around 35, this demographic is notably youthful and adept at leveraging technology, actively participating in the global marketplace. Moreover, they exhibit a higher educational attainment compared to the general population, with many holding university degrees. This educational background not only enhances their earning potential but also fuels aspirations for upward social mobility.

Geographically, the middle class is predominantly concentrated in urban areas, particularly in major cities like Hanoi and Ho Chi Minh City. This urban concentration drives substantial demand for a wide array of goods and services, influencing market trends and opportunities. Vietnam’s aspirational middle-class consumers prioritize investments in education, healthcare, and housing, reflecting their ambition to improve their quality of life. Additionally, there is a growing emphasis on leisure activities, travel experiences, and personal development, underscoring their evolving consumer preferences and priorities.

Implications of a rapidly growing middle class

Vietnam’s middle class is expanding, particularly in urban areas, driven by rapid economic growth, industrialization, increasing wealth, and a young, growing population. This expansion is fueled by several key factors: a young and expanding population, a robust economy, smaller households, a rise in suburban consumers, and a higher standard of living. With a population of close to 100 million and a youthful median age, many young individuals are entering the workforce, earning money, and contributing to the burgeoning middle class.

Vietnam’s economy has experienced an impressive annual growth rate for the past decade, creating numerous job opportunities and increasing disposable income. Improved living standards, driven by economic growth, government policies, and foreign investment, have also played a crucial role in this middle-class expansion.

The expanding middle class in Vietnam is having a profound impact on the nation’s economy and society. This demographic is driving increased demand for new goods and services while making substantial investments in education and real estate. Politically and socially, the middle class is gaining influence, contributing to national development and stability. On the global stage, Vietnam’s middle class is emerging as a significant force, playing a crucial role in international trade and investment.

Spending patterns

Several trends are driving the growth of Vietnam’s middle class. The urban population is creating new opportunities, particularly in the services and manufacturing sectors. Steady increases in disposable income, fueled by economic growth and higher wages, are leading to more spending on education, healthcare, and entertainment. The middle class is becoming more sophisticated and discerning in their consumption habits, driving demand for high-quality goods and foreign brands. The burgeoning e-commerce sector, supported by widespread internet access and mobile device usage, is also becoming a crucial shopping channel for middle-class consumers, significantly boosting the country’s retail sector.

Rising affluence is reflected in the purchase of durable goods such as cars, motorcycles, and home appliances. Consumers are increasingly willing to pay more for reputable brands, and online shopping has become a popular option due to its convenience, discounted rates, and wide range of products. Alongside material goods, there is a growing prioritization of experiences such as travel, dining out, and entertainment.

It is evident that the growing middle-class population in Vietnam is shifting towards spending more on non-essential goods compared to their spending patterns during the pandemic, which were more focused on saving and consuming essential goods.

Consumer trends and takeaways for business

With the increasing digital presence of consumers, businesses can align their product portfolios and distribution channels to meet the evolving value-for-money needs. This may involve offering a wider range of products and exploring new retail formats such as discounters, alongside promotional activities. The current landscape also favors the flourishing expansion of e-commerce platforms to reach a broader consumer base.

Businesses can tailor premium offerings to attract affluent, less price-sensitive customers, particularly younger generations willing to invest more in quality. This entails accelerating innovation to broaden product offerings and catering to more sophisticated demands. As the Vietnamese consumer market matures, there is growing space for premium brands to enter. Companies with established brand portfolios and distribution networks should consider introducing premium products tailored to Vietnam to capture this segment.

Expanding distribution networks to include tier-2 and tier-3 cities in Vietnam is crucial. Companies need to adapt their route-to-market models to navigate the consolidating yet fragmented retail landscape effectively. A 2021 consumer survey in Vietnam revealed that 84 percent of respondents prioritize sustainability, indicating a willingness to invest in organic, healthier, and sustainable products even at higher costs. Companies can enhance their consumer offerings by focusing on products with organic ingredients and emphasizing local or locally perceived brands to meet the demand for purposeful purchases. Strong local players currently hold significant market share and developing such products can accelerate growth by aligning with consumer values and preferences.

In Vietnam, the primary spending trend centers around the food and beverage industry, with increasing expenditures on high-end products aimed at enhancing quality of life. Consequently, there is a growing local appetite for select foreign luxury items. The fastest-growing expense categories in Vietnam include food and non-alcoholic beverages, health products and medical services, and clothing and footwear.


To conclude, Vietnam’s ambitious goal to achieve developed economy status by 2050 has sparked substantial changes over the past few decades. The emergence of a growing middle class has brought about shifts in spending patterns and habits, presenting significant opportunities for businesses. Companies aiming to thrive in this market should prioritize offering high-quality products and services that meet the evolving demands of this demographic.

(With inputs from Melissa Cyrill)

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