The rich spend money on luxurious goods despite crisis

VietNamNet Bridge – While most Vietnamese try to fasten their belt in the context of the economic recession, the rich still spend money like water on luxurious goods.

luxurious goods, the rich, crisis

In mid-July 2013, a well known motorbike manufacturer caused a shock to the domestic market when launching a new model, called a “super product” with the sky high price of over VND300 million, equal to the price of a small sized car.

The launching has made the Vietnamese motorbike market get choppy, though it was cold before because of the weak demand.

The motorbike manufacturer might have learnt the market demand carefully before marketing the luxurious model, and it might well understand that despite the economic recession, a part of Vietnamese is still willing to pay big money on luxurious products.

Vietnamese consumers are really admirable in terms of the dissipation level, if noting that the prices of the luxurious goods in Vietnam are always 2-3 times higher than in the US market.

It is true that the poor Vietnamese have to spend as triple money as the rich American people to possess the same products. A source said that in late March 2013, a modern scooter made in Vietnam was priced at VND80 million. Meanwhile, the same model, imported from Vietnam, was sold less than VND60 million in Indonesia.

Most recently, Rolls-Royce, the super luxurious brand, has officially made its presence in Vietnam through an agent Rolls Royce Motor Cars Hanoi. The opening the sale agent gives more favorable conditions to Vietnam to easily access the luxurious models such as Phantom, Ghost or Wraith. Especially, the manufacturer would also bring Bestspoke service to satisfy the specific demand of the Vietnamese rich.

The luxurious car manufacturer hopes to obtain the two digit growth rate in Vietnam, which means that at least 10 cars would be sold. Of the existing models, it puts the highest hope on the sale of Phantom. There is only one Phantom in Vietnam.

Lamborghini and Bentley, the other two luxurious brands, plan to open their first sales agents in Hanoi in August 2013.

A report of the General Department of Customs showed that in the first 9 months of 2012, more than $3.6 billion worth of luxurious products, including mobile phones and phone accessories, were imported.

In the first six months of 2013, the import turnover of the discouraged luxurious goods was still on the rise, reaching $2.9 billion. Especially, the imports of mobile phones increased sharply by 36.2 percent, while less than 9-seater cars increased by 10 percent.

A recent survey by Nielsen showed that 56 percent of Vietnamese like using branded goods. The high percentage puts Vietnam on the third position in the world in the number of people using branded goods, just to China and India.

Lawyer Nguyen Minh Duc from the Hanoi Bar Association, said the government imposes high taxes on the products it does not encourage to import, such as branded goods, tobacco, beer and liquor.

However, the high taxes could not help ease the people’s spending on luxurious goods. People keep spending money on luxurious products at a high level which goes beyond the withstanding of the national economy. Meanwhile, economists have warned about the foreign currency bleeding, as Vietnamese have to spend dollars on the luxurious imports.

Tam Thoi

luxurious goods, the rich, crisis