The Boston Consulting Group (BCG) is expanding its presence in Southeast Asia with a new office in Vietnam where the US firm believes a growing affluent class will more than double in size by 2020.
“It’s right time for us to open our Vietnam office today,” the company’s chairman Hans-Paul Bürkner said as he opened the office located in Ho Chi Minh City last week. Bürkner added that his corporation’s survey, issued the same day, showed Vietnam and Myanmar were the region’s new growth frontiers. He commented Vietnam has one of the world’s largest domestic populations with a young and dynamic workforce that provided the potential for strong economic growth.
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Vincent Chin, senior partner and managing director of the firm, added that Vietnamese companies were no longer content to serve only the domestic market, with some hoping to become regional and global businesses.
Douglas Jackson, partner and managing director of BCG Vietnam, explained, “The choice to open an office in Vietnam is a logical one. The Vietnamese government has done a remarkable job converting economic gains into well-being for its citizens. Everywhere one sees long-term planning and investment that will reshape industries and strengthen the economy.”
Vietnam today is facing economic difficulties, but offers remarkable opportunities for firms bold enough to navigate its short-term complexities, said Jackson, co-author of the study and former senior executive at VIB Bank in the country.
Jackson underlined that the latest survey showed the middle-income earners and the newly rich in Vietnam and Myanmar would more than double in size by 2020, and consumers in the two countries were the most optimistic in the world. “They are even more optimistic than their counterparts in China, India and Indonesia,” he said.
According to the publication, there will be more than 30 million middle and affluent consumers in Vietnam by 2020. These consumers were not just growing in numbers, they are also spreading out. Today, a company can reach one-half of Vietnamese middle and high-spending consumers by serving Ho Chi Minh City and Hanoi alone. But by 2020, several sizable groupings of such consumers would crop up along the 1,200-kilometre-long spine of the country. Ho Chi Minh City and Hanoi would account for only at one-third of this consumer group by 2020, and companies would need to have a presence in nearly twice as many locations as does today to achieve comparable coverage.
The survey grew out of a desire to understand consumers in Vietnam and Myanmar.
BCG’s Centre for Consumer and Customer Insight conducted primary research in both countries and analysed population and income trends in nearly 1,400 districts in Vietnam and 75 provinces in Myanmar, said Tuomas Rinne, a BCG partner and another co-author.
By Tuong Thuy