Do a quick Google search and you will find multiple articles about Vietnam’s dynamic growth and rising income levels. Both factors are now taken for granted, year in and year out.

The country is a magnet for foreign direct investment (FDI), as companies move their supply chains out of China. It is also an attractive proposition for foreign brands hoping to tempt consumers brimming with confidence about their purchasing power (the Vietnamese regularly top global consumer confidence polls).

To date, most foreign attention has been directed towards the country’s two big cities, Hà Nội and Hồ Chí Minh. This is not very surprising given how much they have both grown over the past couple of decades.

The two cities regularly feature in Jones Lang LaSalle’s City Momentum List. Hồ Chí Minh was third and Hà Nội was seventh when the last one was published in 2020.

That momentum will continue throughout the rest of the 2020’s. But arguably the real consumer gold lies in Vietnam’s secondary cities, which are just now starting to attract more focus.

We identified this trend at THP over a decade ago when we laid plans to set up three new factories beyond our headquarters in Bình Dương Province, on the outskirts of Hồ Chí Minh City.

Starting in 2012, we built three new factories in: Ha Nam, which is two-and-a-half hours drive from Hải Phòng; Hậu Giang, which is one hour from Cần Thơ; and Chu Lai, which is roughly one-and-a-half hours from Đà Nẵng.

These three cities are now coming into their own and for obvious geographical reasons. Vietnam is a very long and thin country and as urbanization increases, people want and need more options to settle up and down the country.

The biggest growth has been in Cần Thơ, which is the largest city in the Mekong Delta, close to the Cambodian border. Its name comes from cầm thi giang, which means river of poems.

It is a very beautiful and relaxing city, which is why lots of Vietnamese are keen to live there. As the famous saying goes: “Cần Thơ gạo trắng nước trong – Ai đi đến đó lòng không muốn về”. In English this translates as Can Tho has white rice and clear water – anyone who visits never wants to leave.

The growth statistics speak for themselves. In 2010, Cần Thơ had 851,000 residents. The latest estimate puts it as 1.8 million. According to United Nations Population Division data, the figure will reach 2.3 million by 2030.

This means that Cần Thơ may have now overtaken Hải Phòng as Vietnam’s third largest city. In 2020, the Economist Intelligence Unit listed Cần Thơ as the world’s second fastest growing city of the previous five years.

A second reason for Cần Thơ’s growth is because the government wants to direct more activity towards the Mekong Delta. It is creating an economic hub connecting Vietnam to Cambodia and Thailand.

It balances a similar hub in the North linking Vietnam to China. Up in the North, Hải Phòng is also growing quickly too. It is a major port city and the UN estimates that its population will increase from 1.3 million in 2021 to 1.7 million by 2030.

Then in the middle of the country lies Đà Nẵng, a coastal city with 1.18 million residents. That number has jumped from 805,000 in 2010 and the UN predicts that it will rise to 1.5 million by 2030.

What an attractive proposition all these new consumers are. In a recent report, the global consultancy McKinsey put it quite succinctly: at the beginning of this century, just 10% of Vietnam’s population were members of the consuming class – those that spend at least $11 per day in purchasing power parity (ppp) terms.

Right now, the number stands at 40% of the country’s 98.51 million strong population. By 2030, McKinsey concludes that it will be close to 75%, as a further 36 million more people become consumers.

In country terms, that is like adding a population the size of Spain to the Vietnamese economy.

So what do these new urbanized consumers want? There are a few trends, which THP’s brands reflect.

Firstly, Vietnam has one of the highest female labour participation rates in the world. There are lots of dual income households and one thing they lack is time for traditional cooking.

THP’s three main brands – Number 1 Energy Drink (Nước Tăng Lực Number 1), Zero Degrees Green Tea (Trà Xanh Không Độ) and Dr Thanh Herbal Tea (Trà Thanh Nhiệt Dr. Thanh) all offer convenience.

In addition to giving people a power boost during a tiring workday (especially Number 1 Energy drink), the three brands also provide plenty of health benefits.

This is a second finding, which makes Vietnam stand out from some of its neighbours. There is a clear preference for food and beverages that provide health benefits and that desire is getting stronger, in part thanks to the pandemic.

McKinsey noted a similar trend in its recent report examining Vietnamese consumers. One reason for this is Vietnam’s youthful demographics as I explained in my last post. The young are much more eco-conscious than their elders.

We promote our brands’ health benefits very clearly in all our advertising. For example, we highlight that Zero Degrees Green Tea uses the finest leaves from North Vietnam.

Then there is Number 1 Energy Drink, which is fortified with B vitamins and taurine, a naturally occurring amino acid that plays an important role in several of the body’s metabolic processes.

And finally, there is Dr Thanh’s Herbal Tea, which helps to purify the body after a particularly spicy meal. Lots of Vietnamese enjoy a bowl of spicy noodles for their lunch then balance out the effects (yin to yang) with a bottle of Dr Thanh’s Herbal Tea.

It is a sweet drink but that is not because it is loaded with sugar. Instead, the sweetener is Vietnam’s traditional Monk fruit, which is 150 to 200 times sweeter than sugar but does not throw blood sugar levels off balance.