According to the World Gold Council, in 2015 Vietnamese people consumed 31 tons of gold jewelry. Particularly in Ho Chi Minh City, the jewelry output is estimated at 2,500 thousand products/year. Although the export turnover of this item is still modest, it still reaches 2-3 million USD/year. Since 2005, the demand for gold in Vietnam has increased rapidly, and the average demand for gold in the last 3 years in Vietnam has been more than 70 tons/year, of which the demand for gold jewelry is increasing sharply (average from 30 to 35 tons/year).
In 2007, the demand for gold was about 75 - 80 tons, 42 tons of which were gold bars and 35 tons were gold jewelry. Saigon Jewelry Company (SJC) sold 41,129 pieces of gold jewelry, 2.5 times higher than 2006, with sales amounting to billions of dong.
Vietnam's gold market in the first quarter of 2016 witnessed unprecedented excitement in history. The sharp fluctuations of the gold price on the world market, and the high demand for gold for investment and consumption made the production and trading of gold go quite smoothly. It is estimated that in 2016, the amount of gold consumed in the whole market exceeded 80 tons. Many economic experts say that Vietnamese jewelry market is booming.
In 2015, there were about 8,000 large and small enterprises trading in gold and silver. Currently, the figure has reached more than 10,000. However, there are only about domestic 10 major brands.
The presence of famous global high-end jewelry brands has put pressure on Vietnamese businesses. In shopping centers such as Diamond, Parkson, and Zen Plaza, the position of Vietnamese businesses is completely inferior to that of foreign brands. However, foreign jewelry brands only target the high-end segment with the main distribution channel at shopping malls while most Vietnamese businesses only have small and retail stores. They cannot find a foothold in shopping malls because they are not branded. However, Vietnamese enterprises understand the home market, which means they will offer products closer to the tastes of their customers.
There are about 10,000 shops selling gold, silver, and gems in Vietnam. However, for the jewelry market, there is not a big brand that is considered to be able to dominate the market. “Giants” like PNJ, SJC, or Bao Tin Minh Chau only account for a small market share. Therefore, many economic experts believe that Vietnam’s gold and jewelry market is really potential.
Over the past 3 years, the jewelry industry has been struggling because of the COVID-19 pandemic. Statistics shows that in 2020, Vietnam's jewelry consumption reached 7.9 tons, which is 41.45% lower compared to the same period in 2019. The decrease of the Vietnamese market is equivalent to the decrease of the world but relatively positive compared to some countries in the region such as Indonesia, Singapore, and Thailand.
A survey of users of jewelry products shows that the major factor is the durability of the product. People are more careful when choosing jewelry materials as well as willing to pay high prices if they believe in the value of durability that it brings.
People who have a need to use gold and silver jewelry increasingly tend to choose to trust the products of famous brands with high customer recognition and reliability.
According to BCG, per capita income in Vietnam increaseed from 1,400 USD/year to 3,400 USD/year by 2021. The number of people of middle classes also increased, which means demands for gold and silver also would increase exponentially. In addition to beauty needs, many customers, especially young customers, need jewelry and accessories to show their fashion sense and personality. Therefore, they are not only willing to purchase, but also constantly innovate and have high requirements for diversity, richness, variation in designs, materials, and product categories.
According to a survey on fashion consumption habits by Q&Me at the end of 2019, price is the most important factor in making shopping decisions, accounting for 23%.
Source: Duy Tan Uni, Thang Long Uni
Compiled by VietnamCredit