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Business and Market Review on Vietnam

The majority of the Vietnamese population are in the rural areas nevertheless the proportion with the urban human population are gradually increasing from 19.7% in 1990 to 26.0% in 2004. Vietnam's largest city is Ho Chi Minh City (population 5.0 million) and Hanoi (population of 3.5 million) as well as Nai, Haiphong and Dac Lac.


Household income in Ho Chi Minh City is almost three times the country's average - the location is the reason for nearly half of all of the motorbikes in Vietnam. Approximately 20% of the population live underneath the poverty level and mainly from rural households. 10%-15% of the households are middle to high-income households while 65%-70% are lower-income households.

INFRASTRUCTURE. Vietnam's telecommunication systems lag behind many neighbouring countries in the region and for that reason government puts great focus on its modernisation. Digital exchanges now attached to Hanoi, Da Nang, and Ho Chi Minh City and main lines have gone up even though the utilization of mobile telephones continues to grow. The nation's road system stretches from the northern to southern tip of Vietnam. Northern and southern Vietnam are served by two air-ports and two main sea ports serving international shipping.

INTERNATIONAL TRADE. Vietnam's major trading partners would be the US, Japan, China, Australia, Germany, Singapore, Taiwan, Thailand and Columbia. Major exports include oil, seafood, rice, coffee, cashew nuts, rubber, tea, garments and shoes. Major imports include machineries and equipments, petroleum products, fertilisers, steel products, cotton, grains, cement and motorcycles.

CONSUMER USAGE OF TECHNOLOGY. There are nearly 10.1 million telephones set up in Vietnam and nearly 5.0 million cell phone subscribers in 2004. The us government is putting considerable efforts to modernise and enhance the country's telecommunication system but nevertheless lags compared to Singapore, Thailand and Malaysia. Computer penetration is low; estimates change from 2% to 4% of the population in 2004 with an estimated 5.8 million internet surfers. The penetration of television is just 20% and concentrated to homes from the cities and towns. Similarly, installing of refrigerators is targeted in the cities where 60% of the homes have refrigerators.

RETAIL MARKET. Retail sales in Vietnam grew by 8%-12% annually from 2000 to 2004 as a result of increasing disposable income because of the country's strong economic growth. Vietnamese consumers spend two-thirds of their income on retail purchases amounting to US$16.3 billion in 2004. Traditional wet markets along with the "mom and pop" shops dominate the retail industry accounting for 95% in the total retail trade. Many of these retail shops measure only five square metres (54 square feet). Modern stores are limited but gradually emerging in the united states and often locally owned businesses concentrated in Ho Chi Minh City and Hanoi.

FOOD CULTURE. Rice and noodles are the staple food in the Vietnamese but taste preference differs by region. Foods in central Vietnam are spicier while foods in northern and southern Vietnam are less spicy as they are saltier. The Vietnamese often dip their foods with chilli, garlic or fish sauce to incorporate flavour. French colonialists introduced European style bread and bakeries in the Vietnamese food culture. Western style fastfood service establishments are starting to emerge alongside the traditional snack bars, cake shops and mobile food carts.
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