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Vietnam's nouveaux riches

The luxury market thrives despite the legacy of Ho Chi Minh, stirring class and generational divisions.

September 24, 2007|Ben Stocking | The Associated Press

ho chi minh city, vietnam -- In a country whose peasant army once marched on flip-flops cut from old tires, Gucci beach sandals priced at $365 can come as a shock.

But the luxury market is booming in Vietnam, where Ho Chi Minh's communist revolution exalted equality and the common man just a generation ago.

As the country begins to embrace private enterprise, its nouveaux riches are snapping up shoes at Gucci, handbags at Louis Vuitton and watches at Cartier, showing how much the country has changed after decades of war.

"I sold a $4,000 leather jacket recently," said Do Huong Ly, a stylish young saleswoman at the Roberto Cavalli shop in Hanoi. "Our customers want people to know that they are high-class."

Not long ago, displays of wealth were frowned upon in Vietnam. Those tire-sandaled troops who bested the French colonial army and outlasted the Americans embodied frugality and egalitarianism. The revolutionary government snatched up the assets of the wealthy and redistributed them to the poor.

But since the late 1980s, a government that once micromanaged all economic affairs has been introducing free-market reforms and courting foreign investors. With them have come Western styles and attitudes.

"Members of the new generation want to enjoy life and pamper themselves with luxurious things," said Nguyen Thi Cam Van, 39, who has purchased five $1,000 handbags at Louis Vuitton.

"If I can afford to buy something nice, it makes me feel proud," said Van, who works for Germany's Siemens and consults for a local import firm. "It lets you show people your taste and style."

One of her friends has 50 Louis Vuitton bags, Van said. "I think five is enough."

Some of Vietnam's shopaholics are young people who work for multinational corporations but still live rent-free with their parents. Others work for powerful state-owned companies and many have made fortunes in Vietnam's small but booming private sector.

They indulge their urge to splurge at Dolce & Gabbana, Burberry, Escada, Rolex, Clarins, Shiseido and the like.

In the two decades since Vietnam began implementing its economic reforms, the nation's poverty rate has been cut in half, and per-capita income has doubled in the last five years.

Still, most workers in this nation of 84 million still earn just a dollar or two a day toiling in the fields. Those working low-wage jobs find the new lust for luxury hard to stomach.

"The rich are getting richer, and the rest of us are struggling to make ends meet," said Dao Quang Hung, a Hanoi taxi driver. "The money they spend on a Louis Vuitton bag could buy several cows for a farmer's family and lift them out of poverty."

At the new Gucci shop in Ho Chi Minh City, flip-flops are among the economy items. The sales staff, looking fresh off a fashion show runway, offer a pair of golden, spike-heeled shoes for $765.

Last year, the Milano store across the hall featured a $54,000 Dolce & Gabbana dress, one of just three in the world, according to marketing director Dang Tu Anh, who represents both stores.

The others, Anh said, were worn by film star Nicole Kidman and Victoria Beckham, the former Spice Girl.

Milano's best customers, Anh said, think nothing of dropping $5,000 on a handbag and a pair of shoes.

Vietnam's older generation, shaped by war, finds itself at odds with younger Vietnamese over the new consumerism.

"Now the younger generation in Vietnam is racing for materialistic enjoyment," said Huu Ngoc, a 90-year-old scholar and author. "Individualism is destroying our cultural identity. We may become richer but lose our soul."

The war generation wasted nothing and saved for the future, convinced that catastrophe lurked around every corner. But opinion surveys show that the 60% of Vietnamese born after 1975 are very optimistic about the future -- and determined to enjoy the here and now.

Van, for example, enjoys pampering herself at the salon with massages and manicures. But she lives in fear that her father, a college professor, will learn about her five Louis Vuitton handbags.

"I can't tell him I have these," she said. "And I would never tell him how much they cost. He would think that I was completely irresponsible."

Van's indulgences are modest compared with those of Vietnam's super-elite, who tool around in the ultimate status symbols: a BMW or Mercedes-Benz. And pay cash.

"In America, you pay in installments," said Nguyen Hoang Trieu, a luxury car dealer in Ho Chi Minh City, the former Saigon. "Here, you pay all at once, in cash. Sometimes people come in here with $400,000 in a suitcase."

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