Luxury brands remain gung-ho about Vietnam despite pandemic

HANOI, Mar 24, 2021, VN Express. Luxury auto and fashion brands are increasingly enamored of Vietnam as they eye its young population and burgeoning middle class. The first Porsche Studio in Vietnam and second in Southeast Asia opened earlier this month in Hanoi, VN Express reported.

The vibrant young population in Hanoi is the inspiration for the store, especially since Vietnam is one of the German brand’s fastest growing markets, Arthur Willmann, managing director of Porsche Asia Pacific, said.

In December, U.K. auto brand Rolls-Royce found a new distributor in Vietnam two months after ending its partnership with the previous one.

Paul Harris, director of Roll-Royce Asia Pacific, had spoken to VnExpress at the time about Vietnam’s strong growth in recent years and great potential. Vietnam has the youngest demographic among Rolls-Royce’s markets, he said.

Luxury brands remain extremely hopeful despite the blip caused by the Covid-19 pandemic.

The number of ultra-high net worth individuals, or those with a net worth of at least US$30 million, in Vietnam fell by 4 percent last year to 390, according to U.K. property consultant Knight Frank.

The number with a net worth of $1-30 million was down 6 percent to 19,491.

Swiss watch brand Audemars Piguet last September introduced a new collection in the country after having opened a store in Ho Chi Minh City in October 2019.

The 140-year-old brand, whose products cost up to VND4.5 billion ($194,400), continues to be well patronized despite Covid.

DAFC, which distributes over 60 international brands including Rolex, said sales rose by 35 percent last year.

Tien Nguyen, its deputy director in charge of luxury fashion brands, said demand from middle-class and wealthy clientele remained strong last year.

She pointed out that Vietnam was the only Southeast Asian country whose economy grew last year.

“The Vietnam market is at an ideal time for the entry of global luxury brands.”

A major factor in keeping demand for luxury goods strong was the restriction on travel, which prevented people from shopping internationally and also meant they had a bigger disposable income.

Italian luxury accessories brand Bvlgari last month returned to Vietnam with a store in HCMC’s District 1.

Like Porsche and Rolls-Royce, Bvlgari also sees young Vietnamese driving demand for its products.

The country’s luxury goods market is set to grow to $1.14 billion this year and grow at an average of 7.17 percent a year in 2021-25, according to German statistics portal Statista.

Knight Frank forecast the number of people with a net worth of $1-30 million to rise by 32 percent to over 25,800 by 2025, among the fastest rates in the world, thanks to the government’s success in controlling the pandemic.