In a general atmosphere of belt-tightening, as many people begin to skimp on meals, an Omega watch priced at more than US$1,000, in the range of the annual per capita income of the nation, is unlikely to move off the shelf soon.
Or that is what one would guess. One would guess wrong.
There are no signs of gloom in the high-end brand market in Vietnam.
"Spending $1,000-2,000 on a handbag or a dress is not rare. Last week, I sold two French dresses worth nearly $1,000 each," said Nguyen Thu Trang, a saleswoman at a high-end boutique on Nguyen Du Street in Hanoi. "Inflation does not affect them (her customers). Our customers have not gone down, actually they have increased as they buy new things for the approaching summer."
Luxury shoppers are often businesspeople or those with well-paid jobs in foreign companies, and powerful state-owned enterprises in banking, finance, information technology, and insurance.
"I feel more confident when using luxury brands," said Tran Thu Ha, who works for a commercial bank in Hanoi, as she paid $500 for a Louis Vuitton handbag. "Some of my friends own at least one or two bags of top brands." Ha has three Louis Vuitton handbags and is not sure she will not buy more. "I don't know whether I could overlook a nice bag. I am very proud of my Louis Vuitton collection."
At the Vincom Tower in the capital city, where Italian shoes or French perfumes are sold to the urban middle-class, many customers are snapping up shoes at Gucci, handbags at Louis Vuitton and shirts at Valentino Creation.
"They are really rich. They think nothing of dropping hundreds of dollars on just a T-shirt," a saleswoman said.
She was right. A young customer, after paying $200 for a T-shirt at the shop, continued on her merry way to the retail outlets of many other leading brands in the upscale department store.
Fashionable clothes and accessories are one thing, luxury cars are another. Lexus, BMW, Bentley, Mercedes, Porsche, and Range Rover are also selling well.
A luxury car dealer in Hanoi said he sold a Range Rover last month valued at some $300,000 to a 24-year-old man, son of a real estate developer.
Demand for traveling among youth with medium-income and above has not decreased despite higher prices.
Duong Mai Lan, head of the marketing and planning division for travel agent Vietravel Hanoi, said tour prices have increased due to higher input costs. However, the number of local customers booking tours, especially during peak tourism season, which falls in June or July, has not reduced.
"In fact, higher prices will not seriously affect these customers," she said.
Inflation is up 9.64 percent from the end of 2010, according to the General Statistics Office.
Passing the boutique on Nguyen Du Street where products start at $150, Nguyen Thi Hao, a street vendor who goes around the capital city with her shoulder pole and baskets on either side, selling fruits, cannot come to terms with the spending of the rich.
"The money they spend on a shirt is higher than my earnings in a month. I do not know why many people are so rich, while laborers like us cannot earn enough to eat," Hao said. Higher prices have forced her to cut spending on eating, and it has been months since Hao had breakfast.
Some sociologists have remarked that spending on luxury goods by some could cause strains in the society, for example by provoking other youth (through peer pressure) to ape such behavior, whether or not they can afford it. They have also remarked that societies with wide income disparities typically experience an increase in crime and violence as well.
Meanwhile, economists say that if excessive spending on luxury items is not for productive purposes or the purpose of serving the community in some way, it can worsen the foreign currency shortage and balance of payments situation.
But people with "money to burn" don't think so.
"We have the right to spend money the way we like. I don't think that using luxurious things to show taste and style is bad," said Le Thu Huong, a female customer at a boutique on Pho Hue Street. "I would only be ashamed if I did not have enough money to splurge."