Best of 2024: Defining moments of Vietnam’s luxury market

In recent months, as I attended various industry events and conferences where global luxury brands converge, one truth became evident: Vietnam is rapidly emerging as a new epicentre where aspirations for elegance and refinement are being realised.

In September 2024, Hermès introduced On the Wings of Hermès to Vietnamese audiences—a film that will be available free of charge on Vietnam Airlines flights and via K+ television from 30 September 2024. At the same time, the brand has been addressing concerns surrounding slowed spending, proving why it remains “in a league of its own” and outpacing competitors seeking to capture the essence of “quiet luxury,” particularly within the Asian market.

Also in September, MCM—the renowned German fashion house—officially made its debut in Vietnam, launching its first City Post Office flagship boutique to the delight of local fashion connoisseurs.

Read more: Secret from the architect behind Hermès store designs: “Never stop nurturing curiosity”

Vietnam is witnessing a remarkable influx of international luxury brands, with the tourism industry’s strong recovery acting as a key catalyst. Among the various sectors, luxury fashion and accessories lead the expansion, particularly jewellery, which experienced exceptional growth in 2023. Notably, new jewellery stores accounted for 63% of all luxury retail openings worldwide this year.

This sector’s upward trajectory is reflected in major market moves: Van Cleef & Arpels has officially entered Vietnam, Cartier has expanded its presence with a new boutique in Saigon, and Ho Ngoc Ha has been named a “Friend of the House” for Bulgari. Meanwhile, Jacob & Co. has unveiled its first flagship store in Vietnam, and Christie’s International Real Estate has entered the market through a strategic partnership with S&S Group.

Luxury brands are also expanding selectively in Vietnam. Just over a decade ago, names such as Gucci and Prada remained unfamiliar to many. Today, however, Vietnam’s affluent generation not only seeks distinction between brands but is increasingly drawn to quality, uniqueness, and craftsmanship—the very pillars that define true luxury.

A young, well-educated, and urban population forms the backbone of consumption, playing a pivotal role in shaping modern consumer behaviour. Vietnam’s middle-class population is projected to reach 95 million by 2030, presenting significant opportunities for the luxury sector, particularly in light of the 2019 EU-Vietnam trade agreement, which eliminates 99% of tariffs and reduces numerous regulatory barriers.

The number of high-income, not-yet-rich (HENRY) individuals and ultra-high-net-worth individuals in Vietnam is also rising. According to Statista, the country’s luxury goods market is expected to reach US$2.356 billion by 2024, with an annual growth rate of 3.75% (CAGR 2024–2029). Although per capita income stood at just 9.94% in 2021, this figure does not tell the full story. Since the launch of Doi Moi in 1986, Vietnam has undergone a rapid transformation from one of the world’s poorest nations to a dynamic middle-income economy. Meanwhile, Knight Frank estimates that the number of individuals with a net worth of between US$1 million and US$30 million will increase by 32%, surpassing 25,800 by 2025.

In 2020, Vietnam emerged as one of Asia’s top-performing economies, even surpassing China’s growth rate of 2.3%. This economic breakthrough has naturally captured the attention of leading names in the beauty industry.

Global luxury cosmetics brands such as CHANEL, Dior, Estée Lauder, and L’Oréal—alongside renowned Asian names such as Shiseido, SK-II, and Sulwhasoo—have swiftly secured their presence in Vietnam, leaving a lasting impression on consumers and recording remarkable growth. Entering 2024, the market continues to gain traction, with luxury brands such as La Mer, famed for its signature algae-infused formulations, and La Prairie, the Swiss icon of prestige skincare, officially making their foray into Vietnam. This move further cements the country’s importance in the global expansion strategies of luxury houses.

La Prairie’s boutique opening at Takashimaya in Ho Chi Minh City exemplifies the increasingly fierce—and costly—battle for market share in a highly competitive luxury landscape, where risk-adjusted returns continue to evolve.

Vietnam presents a wealth of opportunity for those who know how to seize it. Yet, what makes this market particularly intriguing is not merely the growing Westernisation and individualism of its consumers, but rather the way collectivist values continue to shape luxury consumption.

While status-driven purchases may be perceived as ostentatious in the West, in Vietnam, luxury consumption is often seen as a source of pride—not only for the individual but also for their broader social circle. This reflects a fascinating shift in the psychology of high-end consumption, where social cohesion plays a fundamental role in driving demand.

Rajeev Batra, a professor at the University of Michigan, has observed that collectivism in Asia does not hinder luxury consumption—in fact, it actively encourages it. In Vietnam’s highly networked society, consumers remain acutely attuned to the perspectives of their peers, often investing in luxury goods as a means of gaining recognition and strengthening their social identity.

This deep-seated connection between prestige and community is what differentiates Vietnam’s luxury market. Here, high-end purchases transcend mere transactions—each acquisition is imbued with personal significance, symbolising both status and belonging.

Recognising this, astute retailers have the potential to captivate Vietnam’s burgeoning consumer class by prioritising Connected Experiences. This approach fosters long-term relationships with their target audience, ensuring that when consumers reach their peak earning potential, they remain loyal to brands that have already engaged them on a deeper level. In this context, the product itself is no longer the centrepiece; instead, each transaction evolves into a moment of personal connection and lasting commitment.

My attention also turns to the luxury travel sector, where the growing trend for high-end consumption is becoming increasingly evident. At airports and in first-class lounges, it is easy to observe a new generation of affluent travellers who have invested heavily in the style and quality of their carry-on essentials. From the latest Rimowa collections to timeless icons such as the Hermès Birkin bag or Van Cleef & Arpels' Alhambra jewellery, the brand’s signature four-leaf clover motif adorns wrists and necks in graceful abundance.

Notably, a defining trait among this elite consumer group is their preference for brands with strong identities—valuing substance, craftsmanship, and authenticity over ostentation. This signals the emergence of a ‘quiet luxury’ market, where discretion speaks louder than extravagance.

Whether it is Zegna, Brunello Cucinelli, Dior or Hermès, Patek Philippe or Audemars Piguet, Vietnamese consumers are demonstrating an increasingly refined appreciation for luxury. They seek out superior-quality products with enduring value, rather than those reliant on fleeting hype. Many are quietly replacing trend-driven brands with those that embody longevity, sustainability, and even investment-grade appeal.

Experiences at Vietnam’s top-tier hotels further illustrate the growing emphasis on impeccable service and personalised care—an aspect that sets the country apart from many other luxury destinations in Asia.

For the first time in its esteemed history, Kempinski Hotels—Europe’s oldest luxury hospitality group—will establish a presence in Vietnam, unveiling an opulent riverside retreat along the Saigon River. In describing the project, Kempinski Hotels shared:

"The Saigon River winds through southern Vietnam, creating an emerald-hued landscape rich in heritage. Nestled in the river’s embrace, Saigon River Kempinski will offer a sanctuary of tranquillity, welcoming discerning travellers from 2025/26."

Meanwhile, Mandarin Oriental—one of the world’s most revered luxury hotel brands, synonymous with refinement in 11 of the globe’s most prestigious locations—has officially commenced construction on the Mandarin Oriental Danang Beach Villa Project, set to redefine beachfront opulence.

The transformation of Vietnam’s coastline continues apace. Cam Ranh, already a rising star on the luxury travel map, welcomes the launch of The Westin Resort & Spa Cam Ranh—the first Westin-branded resort in the country. This marks just the beginning of Marriott International Inc.’s ambitious expansion strategy, which will see the opening of 20 additional luxury hotels and resorts in Vietnam’s most sought-after destinations, such as Hanoi, Ho Chi Minh City, Da Nang, and Phu Quoc. The development aligns with the growing expectations of high-net-worth travellers across Asia.

Notably, in August 2024, Dioriviera unveiled its exclusive summer collection at the Four Seasons Resort The Nam Hai, Vietnam. Designed by Maria Grazia Chiuri, this collection seamlessly blends haute couture with the essence of luxury resort living, drawing inspiration from the sun-drenched Mediterranean coastline. Encompassing apparel, accessories, and home décor, each piece radiates refinement and effortless elegance. More than a showcase of Dior’s signature sophistication, the Dioriviera journey embodies a cultivated lifestyle—one that the Maison has long cherished. Choosing Central Vietnam as the setting for this prestigious unveiling underscores the symbiosis between natural beauty and elevated living, heralding an exciting new chapter in Dior’s expansion in the region.

Matthew Powell, Director of Savills Hanoi, observed: “The rise of luxury pop-up boutiques within resorts is a direct response to both brand demand and increased consumer appetite. By catering to affluent travellers on a seasonal basis and tailoring offerings to reflect local culture, luxury brands can reinforce their positioning and amplify their global appeal. This trend is poised to unlock significant opportunities for Vietnam’s high-end hospitality sector in the coming years.”

As Vietnam continues its ascent towards becoming a high-income nation by 2045, the expectations of its luxury consumers will evolve in parallel. The new generation of discerning clientele is not merely purchasing products—they are investing in experiences of unparalleled craftsmanship, prestige, and exclusivity.

In this escalating race for excellence, the hope is that luxury houses will not only embrace change but also redefine their ambitions. The key lies in crafting a visionary roadmap—one that is poised to meet the ever-expanding purchasing power of Vietnamese consumers, while staying true to the essence of true luxury.

This article is an excerpt from the original feature published in the November 2024 print edition of Tatler Vietnam.

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