Vietnam - PricingVietnam - Pricing

The overriding factor in pricing for the Vietnam market is the low level of per capita income. While consumers want quality and understand that quality comes at a premium, most buying decisions are highly price-sensitive. Imported products generally must incorporate the following elements into the pricing structure: 1) Import agent fees; 2) Customs duty; 3) Value-added tax (VAT) in the range of 5 to 10 percent is levied on the landed cost when the goods change title; and, 4) Luxury/Consumption Tax (especially on autos, beer and alcoholic beverages).

Price also plays an important role in consumer perception of the product. Although Vietnamese consumers expect to pay a premium for a foreign label or brand, in practice, the actual number of consumers who are willing to pay the higher price is limited. Market analysts agree that one notable exception to this generalization is big-ticket purchases of motorbikes, cars, and some fashion items that convey status and may also be considered an investment for long-term use. One important pricing cycle to note is linked to the Christmas Holiday and the Lunar New Year “Tet” celebration (several days between late January and mid-February, depending on the year). As there is a flurry of buying in the few months preceding these holidays and little activity immediately afterwards, price hikes and reductions follow accordingly. Savvy marketers also develop promotions and incentives surrounding these gift-giving holidays.