The middle and affluent class will double in size in Vietnam and Myanmar between now and 2020, according to a publication by The Boston Consulting Group (BCG).
Consumers in these two Southeast Asian countries are also among the most optimistic in the world—more optimistic than even their counterparts in China, India, Indonesia, and other fast-growing emerging markets.
More than 90 percent of all consumers in Vietnam and Myanmar, for example, believe that their children will have a better life than they themselves. By comparison, the share of consumers who share that belief is more than 20 percentage points lower in China, India, and Indonesia.
By 2020, there will be more than 30 million middle and affluent consumers in Vietnam and about 10 million in Myanmar. “Companies that invest in Vietnam and Myanmar now have an opportunity to build businesses, brands, and momentum early in the development of these formerly closed economies—but only if they have a solid understanding of these markets' consumers and how to satisfy them.,” said Douglas Jackson, a BCG partner based in Ho Chi Minh City and co-author of Vietnam and Myanmar: Southeast Asia’s New Growth Frontiers.
Vietnam has been on the upswing for 20 years, and that trajectory has steepened since 2007, when the country joined the World Trade Organization. Few Vietnamese consumers, however use banking products other than a savings account. Only 5 percent own a credit card, for example. Rich, poor, or in between, Vietnamese enjoy the hunt for deals, discounts, and promotions, more so than consumers in Thailand or Myanmar.
Myanmar’s emergence from economic isolation is more recent and provides a rare opening for companies to reach a small, undeveloped, but rapidly growing market. Only about one-quarter of consumers go on vacation and fewer than four out of ten frequent restaurants.
Consumers in Myanmar frequently buy entertainment products, however, especially VCRs, before they buy consumer durables. The uncertainty of electrical service discourages the use of expensive appliances, and the lack of movie theaters and other entertainment venues encourages at-home options. For example, 53 percent of urban consumers own a mobile phone but only 18 percent own a washing machine.
“If Vietnam is a here-and-now opportunity, Myanmar is a more long-term play. The market is still developing, so there is time to learn and be focused in your strategy,” said Tuomas Rinne, a BCG partner and co-author of Vietnam and Myanmar: Southeast Asia’ New Growth Frontiers.