For the past decade, "Vietnam's expanding middle class" has been the centrepiece of virtually every market entry pitch, investment thesis, and consumer strategy deck produced about the country. The narrative is compelling: a young, urbanising population of 102 million with GDP per capita climbing year after year. But IFM Research's annual tracking of more than 100,000 consumers across 34 Vietnamese Provinces tells a different story. The middle class is not expanding. It is hollowing out.

From 61% to 47%: Middle-Class Erosion

Prior to COVID-19, Vietnam's middle-income segments — households earning between 10 and 30 million VND per month — accounted for 61% of the working population. By 2025, that share had fallen to 47%. This is not a temporary pandemic dip. It is a structural shift that has persisted for five consecutive years.

The decline has not been uniform. The high mid-income group (20–30 million VND) contracted from 28% to 19% nationally, with the sharpest drops in rural areas where this segment halved from 20% to 13%. The lower mid-income group (10–20 million VND) declined more modestly, from 33% to 28%.

Where did these consumers go? In both directions. Over six years of tracking, IFM's data shows the highest income group grew by 6 percentage points and the lowest income group grew by 8 percentage points. The middle did not rise — it split.

Vietnam Income Stratification, 2025 | IFM Consumer Panel (n = 100,000+)

Green = affluent segment (21% of households) | Yellow = middle (47%) | Red = lower income (32%)

The Savings Squeeze: Four Years of Decline

The structural income shift becomes tangible when you look at savings. IFM's survey of over 10,000 consumers shows a clear, sustained deterioration: the proportion of Vietnamese consumers reporting decreased savings has risen every year since 2022, from 18% in 2019 to 44% in 2025, with decline in savings spiking in 2022 at 58%. The overall trend does show an increase in savings over time, but more consumers savings are still declining versus increasing, specifically for middle- and lower-income consumers.

Savings Trend: Proportion of Consumers by Savings Direction, Pre-Covid–2025

This matters because savings are a leading indicator of consumer confidence and discretionary spending. When a third of your consumer base reports shrinking savings for the fourth consecutive year, the market is not “recovering” — it is adapting to a lower baseline. However, as the economy improves, savings should follow suit, as long as inflation remains in check.

The Polarisation Gap: Two Vietnams Emerging

The savings data becomes sharply bifurcated when segmented by income. Among low-income households (below 10 million VND monthly), 47% report continued savings declines in 2025, with only 25% managing to save more. Among high-income households (above 30 million VND), the picture inverts: 47% report increased savings, with only 36% experiencing decline. Prior to COVID about 65% of households were able to save money constantly.

Savings Direction by Income Group, 2025

This is consistent with global post-pandemic patterns, but in Vietnam it is compounded by the structure of the labour market. Of the country's 68 million working-age population, only 23 million — roughly one in three — hold formal labour contracts. In rural areas, which account for 60% of the total population, 78% of workers operate without contracts. These informal workers are invisible to official income statistics and largely excluded from employer-linked benefits, insurance, and structured pay progression.

Why Official Income Data Misleads

Any brand relying on government income statistics or GDP-per-capita proxies to size the Vietnamese market is working with a distorted picture. There are three structural reasons for this.

First, under-declaration is the norm. Official census data systematically understates earnings. Self-reported income in government surveys is depressed by tax avoidance incentives and cultural norms around disclosure. IFM's panel-based approach — tracking actual consumption patterns alongside stated income — produces materially different estimates.

Second, informality is massive. An estimated 20–30% of Vietnam's economy operates in the shadow sector. In practical terms, this means tens of millions of transactions, incomes, and economic relationships are simply not captured in the data that most market sizing exercises rely on.

Third, the data is old. Many income distribution models still reference census data that is nearly a decade old, adjusted only by headline GDP growth. This approach assumes uniform income growth across all segments — precisely the assumption that IFM's tracking data disproves.

Context: Minimum Wage by Region (January 2026)

Note: Region IV minimum wage (3M VND) sits below IFM's poverty threshold of 5M VND/month household income.

Minimum wage only impacts about one third of the population with legal contracts, hence further distorting income growth.

What This Means for Brands in Vietnam

The hollowing of the middle class does not mean the Vietnamese market is contracting. It means the market is bifurcating, and strategies built on a monolithic “rising middle class” assumption will increasingly misfire. Three implications stand out.

The premium opportunity is real and growing. The affluent segment — households above 30 million VND — now represents 21% of the population, up from 15% in 2020. But this group is heavily concentrated in urban centres: 31% of urban households qualify versus just 14% in rural areas. Premium strategies that assume nationwide reach will over-invest in distribution relative to addressable demand.

The value segment is the contested battleground. The 47% of households in the middle-income bands (10–30 million VND) are not a homogeneous group. High-mid consumers (19% of total) behave more like aspirational affluents; low-mid consumers (28%) are increasingly making the trade-offs characteristic of lower-income segments. Treating them as one target is a category error. Brands that win here will be those that offer credible quality signals at accessible price points — and that can reach a geographically dispersed base across both urban and rural Vietnam.

Lower-income consumers are strategic, not just price-sensitive. The 32% of households below 10 million VND are predominantly rural (43% of rural households fall here versus 16% urban). Their purchasing decisions involve careful prioritisation, not indiscriminate trading down. Winning in this segment requires format innovation — smaller pack sizes, promotion-led cycles, and distribution models adapted to rural retail infrastructure — rather than simply discounting.

Methodology: IFM Research conducts continuous consumer tracking across 63 Vietnamese cities with a panel of 100,000+ respondents annually. Income stratification data covers 2020–2025. Savings survey: n = 8,000+, nationally representative. All income figures refer to monthly household income in VND.

About IFM Research: Is a market research and strategic consultancy group with over 3 Decades of providing agile, accurate and actionable market insights, utilizing technical innovations for the digital age across South-East Asia.