Inside gift baskets for Lunar New Year, Vietnam's wealth gap is glaring

By Ngan Anh, Thanh Nien News

Email Print

People buying food for the upcoming Tet at Big C supermarket. Photo credit: Lao Dong People buying food for the upcoming Tet at Big C supermarket. Photo credit: Lao Dong


Tran Le Hang is not sure if she should stop.
Pushing a shopping cart that is already filled to the brim with many imported items at a gourmet shop in Hanoi, Hang now looks for some more special treats to celebrate the forthcoming Lunar New Year.
She has also ordered 20 gift baskets of similar products for her business partners.
Her company just had quite a good year. Those hampers, which cost around US$700 each, are the only choice she’s happy with.
As consumers in Vietnam rush to make final purchases for the important Tet holiday, gourmet shops selling expensive items are almost always fully packed. 
Their bestsellers include French foie gras, Belgium chocolate, Russian caviar and American jerky.
The owner of one of those shops in downtown Hanoi said she didn’t expect the number of customers would increase that much. She had to hire more assistants to help.
At Hotel Metropole Hanoi, gift baskets with imported confections, tea and wine, together with traditional specialties from Vietnam, have been selling well. Some of them are sold for up to $1,500.
A staff member here said sales of these baskets doubled this year and there are customers buying hundreds of them.
An economist in Hanoi, who requested anonymity, said he was not surprised to see the growing love for high-end products in Vietnam.
Although the economy is not always in a good state, there are still a lot of people who have money and they want to consume expensive imported products, he said.
Vietnam’s economic growth, steady and among the fastest in Asia, has made people richer, but the distribution of wealth is not equal. 
The gap is expanding between the rich and the poor in Vietnam, he said.
The World Bank estimated that Vietnam was home to 110 super-rich citizens in 2013, meaning individuals with assets of $30 million or more, excluding a principal residence. This was a substantial increase from 34 people in 2003.
Around the world, the number of super-rich has grown rapidly in the last decade.
But in Vietnam, where some rural areas still have a poverty rate of more than 50 percent, concerns about rising inequality appear more pressing.
Data showed that in rural areas, the rich were thought to earn VND10 million ($470) a month while in urban areas the rich could earn fourfold.
In contrary to the bustling market for luxuries, mainstream products are seeing a relatively lackluster response from consumers coming from the lower income brackets.
Predicting weak demand this Tet, many enterprises have raised its production moderately, by only 5-10 percent over last year. In previous holiday seasons, the increase used to be 20-30 percent.
Nguyen Tien Vuong, deputy head of the Hanoi Trade Corporation, which runs more than 20 outlets of the Hapromart supermarket chain in Hanoi, said his business has spent some VND1.2 trillion ($57.1 million) to stock goods for the holiday season, up 10 percent over 2014.
However, he has been concerned about the low purchasing power.
"Now sales are still very weak. Consumer demand does not increase, and prices overall have remained unchanged," he said.
There’s an abundant supply of goods, but consumption has slowed down due to fragile economic recovery, Vuong said.
Vietnam's economic growth is expected hit 5.4 percent in the first quarter ending March, according to the National Financial Supervisory Commission.
Nguyen Thi Ha, who owns a small grocery store on Hanoi’s Hang Bo Street, said locals now don’t focus too much on feasts during Tet.
Her store’s sales have fallen by 50 percent compared to last year.
Ha said her customers of low to middle income mainly select goods produced by local companies.
Competitive prices and new designs had made locally-produced items attractive to the majority of consumers, she said.
At supermarkets like Hapromart, Big C and Fivimart, locally-made goods accounted for 80 percent of the essential items for the holiday
Vietnamese producers such as Kinh Do, Bibica, Hai Ha were the main confectionery suppliers for supermarkets this Tet.
"Local confections account for 90 percent our sales. Imported products, mainly from Malaysia, Singapore and Thailand, make up 10 percent only," Ha said.

More Business News