In the 1980s, Diep Bach Duong worked for a pittance as a bureaucrat in communist Vietnam. Now, she cruises around in a new Rolls-Royce and carries a Louis Vuitton handbag.
While many in Vietnam still live on only a few dollars a day, Duong is a member of the new class of millionaires who have taken advantage of the country’s economic boom and are not afraid to put their wealth on display.
“When I worked for the state, my opportunities were limited,” said Duong, 59, who left government service in the mid-1980s. “Right away, I got into the real estate business.”
In 1987, she used about 400g of gold to buy a house and renovate it. When she sold it, she quadrupled her investment and launched an agency.
“My clients were a special class of people — very rich Vietnamese sailors,” she says, explaining that seamen made their fortunes by reselling consumer goods bought abroad once they returned home.
Duong’s business expanded rapidly in southern Ho Chi Minh City — formerly Saigon and the country’s commercial capital — and she made a tidy profit through her agency.
The Rolls-Royce Phantom she has just imported for US$1.3 million is not even her first. She bought one last year but decided it was too small.
Duong said her clientele had become more diverse.
“Businessmen are buying. But there is also a generation of young rich people,” she said.
Her success is perhaps not the norm, but with Vietnam’s economic growth last year a blistering 8.5 percent, millionaires are no longer rare.
No one really knows how many millionaires there are here, as the Vietnamese tend to keep large parts of their assets in cash. But the local press managed to compile a list of the top 100 stock market millionaires.
“In Vietnam there are a lot of rich people, like in many other Asian countries,” said Andreas Klingler, who recently opened an office in Vietnam for German luxury sports car maker Porsche.
“The market is still very, very small,” he said. “With the boom Vietnam is seeing — the GDP growth, the growth in foreign direct investment, its WTO entry — we decided there could be long-term potential.”
Klingler said his clients range in age from 20 to 60, even though taxes make the cars twice as expensive as they are in Europe. Since November, he said, he has sold more than 15 sports cars.
“The Vietnamese are not shy about showing off, using all these luxury products,” he said. “It’s not just Porsche — Rolls-Royce and Bentley are here too.”
In both Ho Chi Minh City and the capital Hanoi, luxury clothing, cosmetics and leather goods shops are cropping up everywhere, even though Vietnam’s GDP per capita is less than US$900.
“We’ve seen this transition in other countries in the region — the countries may have relatively low average incomes but some people have money and they like to spend it,” said Jonathan Pincus, an economist for the UN Development Program.
“Throughout the region, when people do well they like to spend on luxury goods,” he said.
“The producers know that quite well and when they see a market opportunity in a new emerging Asian country, you better believe they’ll be there quickly,” Pincus said.
“They know they have a steep upward trajectory here as Vietnamese people make more money,” he said.
Duong refuses to say how much she is worth, but she isn’t shy about displaying the designer handbags, mobile phones and other accessories she owns.
Last year, when Louis Vuitton opened a boutique in Ho Chi Minh City, she said she spent about US$30,000 on bags, umbrellas and suitcases.
Slinging her handbag over her shoulder, the one-time civil servant quips: “I’ve got dozens of these.”
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