Businesses are adapt to Vietnam's demographic shifts

According to Ipsos Vietnam's 'Generation Myths & Realities 2024' report, Vietnam's shrinking population growth rates and population decline, set to begin from the middle of the century onwards, will have profound implications for workforce planning, pension systems, and economic growth. Adjusting to ageing populations, considering the potentially vast market of older adults who control a significant portion of wealth, will be crucial for marketers and businesses.

The report pointed out that Vietnam currently enjoys a period known as the demographic window of opportunity, where the proportion of the working-age population is higher than that of dependents. However, this window is expected to start closing by 2039 as the fertility rate declines and population ageing accelerates. The total fertility rate in Vietnam has decreased significantly over the years, currently standing at 2.0, close to the replacement level. This trend, driven by socioeconomic factors like urbanisation and changing family dynamics, will eventually lead to a shrinking workforce and increased pressure on social services.

Simultaneously, the median age of the Vietnamese population is rising, with the percentage of those over 60 projected to increase substantially in the coming decades. This ageing population presents a unique set of needs and preferences for businesses to address.

While 49 per cent of global respondents have heard of Generation Z, only 34 per cent of Vietnamese are familiar with the term. This trend extends to other generations as well, with lower recognition for Millennials (24 per cent in Vietnam vs. 48 per cent globally), Generation X (33 per cent vs. 46 per cent), and Baby Boomers (29 per cent vs. 39 per cent). Generational labels like ‘Baby Boomers’ or ‘Gen Z’ may not resonate as strongly in Vietnam compared to western countries, due to cultural and historical contexts that significantly alter the collective experiences of generations.

Health and wellness are paramount, with 91 per cent of Vietnamese respondents agreeing that they need to do more to look after themselves physically, according to Ipsos Global Trends 2023. Health enhancement could be an optimistic way of addressing older citizens, without the underlying implications of “something is broken; therefore, it needs to be fixed or prevented” that comes with curative or preventive messages.

For businesses, demographic trends offer both challenges and opportunities, such as catering to underserved markets like the ageing population. There is a mismatch between mature adults’ considerable assets/buying power and the level of marketing attention they get, which often borders on neglect. Strategic planning must now account for these trends to ensure businesses are on a stable and sustainable footing for future growth.

The general idea is that brands aim to serve the underserved to continue growing. However, examples are still primarily limited to products associated with maintaining physical health and wellbeing, rather than addressing other aspects of ageing like the need for smaller packaging (both because of weight and because of smaller household sizes), elderly people’s supposed reluctance to change their habits, among others.

Vietnam's swiftly aging population prompts strategic government initiatives The Asian Development Bank (ADB) disclosed on May 2 that developing nations in the Asia-Pacific region, including Vietnam, are inadequately prepared to secure the welfare of their swiftly ageing populations.

Ho Chi Minh City faces rapidly ageing population with 12.5 per cent over 60 Low birth and death rates, coupled with increased life expectancy, have accelerated Ho Chi Minh City's progression into an ageing population, with those over 60 years old accounting for 12.5 per cent of its citizens.

Golden population structure and financial pressure in an aging society One of the 10 countries with the fastest ageing population in the world, Vietnam has an estimated 30 years within the “golden population structure” period, considerably shorter than many neighbouring countries. The rapid ageing rate and the low ratio of independent seniority are expected to entail pressures and burdens on social security.