Tet divide: Are people getting richer or is the income gap getting wider?

By Ha Phuong   January 21, 2017 | 03:22 am GMT+7
Tet divide: Are people getting richer or is the income gap getting wider?
A woman is shopping for Tet at a supermarket in Hanoi. Photo by VnExpress

Local or imported products for New Year: you decide.

Multi-tasking Dao Nhu Thuy is busy pushing her shopping cart filled to the brim with treats for the upcoming Lunar New Year, while at the same time receiving hamper order requests from her boss on the phone.

“My company had quite a good year," Thuy, a 37-year-old marketing executive, happily said about the 20 fancy hampers in her cart. "These ‘royal’ hampers, with a price tag of $300 each, are for our business partners.” She seemed to be very happy with her choice, with each basket packed with expensive-looking imported confectionery and wine.

The closer Tet comes, the busier people are. Buyers are frantically searching for gifts, while shops are looking to cash in.

A shop owner on Hang Buom Street said she'd had to hire two more assistants to help her with the gift hampers to cope with the rising number of orders. Her shop is flooded with hampers that range from $15 to $1000.

“It seems that people are becoming richer," she told VnExpress International. "I’ve had more orders for expensive hampers this year. The most expensive item in the hampers is imported wine. I don’t know why but Vietnamese drinkers prefer imported wine to local wine.”

Two ready to be shipped hampers

Two hampers ready to be shipped. Photo by VnExpress

At the luxury, five-star Sheraton Hanoi, gift baskets are filled with imported wine, a tin of Vietnamese tea and confectionery produced in-house. Some customers have been buying hundreds of hampers, said a staff member.

This year, Vietnam failed to hit its growth target. However, that does not necessarily mean people have had a terrible year too. Many people are still willing to pay more to consume classy products manufactured in other countries. The country’s growth has been sustainable and among the fastest in Asia, but together with that, economic inequality is growing.

Marketing executive Thuy said that the hampers given to employees at her company cost around $60 each. Meanwhile, a gift basket for workers at a factory in the border province of Cao Bang cost $12. In rural areas, a good salary is classed as around VND10 million ($470) a month, but that figure can go up fourfold in urban areas, official data show.

Income inequality in Vietnam has increased over the last two decades; the richest are taking a disproportionate share of income, according to World Bank data. In an hour, the richest Vietnamese can earn from their wealth almost 5,000 times more than what the poorest 10 percent of Vietnamese spend every day on basic needs, according to an Oxfam report on inequality in Vietnam for 2016. Vietnam's average annual income was around $2,200 last year, according to the General Statistics Office.

As the Lunar New Year draws near, many shopping centers have stocked up to meet rising demand. LOTTE Mart, for example, has increased stocks by 40-50 percent, said Bui Manh Hai, manager of LOTTE Mart Tay Son, Hanoi. The price of a gift basket at LOTTE varies from affordable to high-end, but the bestsellers cost under $50.

In contrast to the craving for luxury, high-end foreign produce, some people are just happy with their locally-made options. With only one week left to Tet, consumers are in a rush to make their final purchases, and supermarkets and grocery stores are packed.

“Local biscuits taste pretty good," said a middle-aged female customer queuing in a long line to check-out. "My kids love them, and so do I. And more importantly, they're cheaper than the imported ones. I don't earn much; around $300 per month, German biscuits and French foie gras are out of my reach.”

Nguyen Thi Mai, a small grocery shop owner on Quynh Mai Street, said most people living in the area are on low-to middle income wages. As such, they mainly select goods produced by local manufacturers. Competitive prices and new designs have made locally-produced items more attractive to consumers, she said.

“Vietnamese people have a passion for high-end, imported products, but their incomes prevent them from fulfilling their dreams,” said Tran Minh Tam, an expert on social issues.

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