The growing number of middle (US$231 - 690) and upper income families would result in more consumer spending than GDP growth figures would indicate, according to Mekong Capital.
The firm says the rapid transformation of Vietnamese families into higher income classes will continue, and the urban upper class will increase from 7% of the urban population in 2010 to 12% by 2015. The middle class will go up from the current 52% to 69% in 2015.
As Vietnamese families move up the class structure, their spending patterns shift dramatically. This will fuel the growth in demand for consumer durables such as appliances, consumer electronics and home furnishings, which will offer chances for investments.
More retail sales will follow growing consumer demand, while organised retail chains (modern trade) will grow from 20% of the retail market in 2010 to 31% by 2015.
Retail therefore will provide one of the fastest growing and most inherently scalable investment areas in this country.
Mekong Capital anticipates that the largest retail chains here will grow from around 125 outlets at present to around 500 outlets by 2015.
On education, it sees that Viet Nam will be at the forefront of the privatisation of education in Asia with total education spending burgeoning from 7.9% of GDP in 2010 to 12% in 2015, from US$7.5 billion to US$20.4 billion.
This growth will be driven by increasing market penetration of private language-training schools (mainly English language for school age children), and an increasing number of families that have the means to afford premium-quality private schools.
Meanwhile, the country has relatively liberal regulations on private investment in education, as well as foreign ownership of education companies, so there'll be opportunities to invest in an increasing number of private education service providers.
Consumer loans represented only 11.9% of 2009's GDP, much lower than 22.1% in China and 30.9% in Thailand. Banks will increasingly attempt to increase their net interest margin by shifting their loan portfolio towards higher yielding consumer loans, especially mortgage lending.
Mortgage lending will drive growth in the housing market, benefiting housing development companies and township development companies.
Consumer finance businesses, such as vehicle finance or mortgage origination, will also flourish in this environment, and will be attractive acquisition targets for banks
