Sustained demand for high-end procucts
According to the latest statistics from the Ministry of Industry and Trade, luxury imports have been on the rise, reaching USD3.77 billion in the first eight months of this year, up 8.75% compared to a month earlier and up 12% from the same period last year.
In the first seven months of 2014, the value of gem imports reached USD348.61 million, up 30% on-year.
Completed auto imports reached 6,000 in August, valued at USD120 million. This is triple against the same period last year. The figure brought the number of car imports to 37,000 valued at USD800 million, during the first eight months of this year, up nearly 72% on-year in volume and up 91% on-year in value.
A survey conducted at car showrooms in Hanoi found that car sales at Toyota Phap Van were up over 10% per month; Toyota Thang Long and Toyot My Dinh were up over 15%.
Luxury imports on the rise
According to those inside this business circle, despite the slow sales of ordinary goods, sales of luxury goods, such as Charles and Keith, Louis Vuitton, and Gucci, are thriving.
Trade expert Pham Tat Thang said that imports of luxury products account for only from 4% to 5% of the country’s total imports.
“This is a paradox. The country is trying to earn every cent of foreign currency by exporting crude materials, but still spends billions of USD on importing luxury products. It will be necessary to take more drastic measures to curb these imports,” Thanh emphasised.
Increasing demand for luxury products in the domestic market shows that purchasing power still resides in the hands of the upper classes. Many economists have commented that it also shows a lack of investment channels.
“The increase in demand for luxury products amid unchanged or even lower average incomes this society shows that the income gap is increasing,” said Dr. Luu Ho Bich, former director of the Development Strategy Institute.
