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Business Trends

Vietnamese open wallets to buy some peace of mind

Growing middle class spends on insurance and security tech to protect lifestyles

Home security cameras that can be remotely controlled by smartphones have been selling well at this security camera shop in Hanoi.

HANOI -- Nguyen Thu Hang, a 37-year-old Hanoi office worker, recently set up a security camera in her Hanoi apartment to keep an eye on her housekeeper and small child that she monitors by smartphone. It is not that she does not trust her housekeeper, she says, it just gives her a greater feeling of reassurance that she can monitor her child from her workplace.

As Vietnam's fast-growing economy enlarges the middle class, more consumers are buying products and services that give them a sense of safety and protection for their newly affluent lives.

Until recently, many Vietnamese were mainly concerned about day-to-day life. Only about 30% have bank accounts, and relatively few seemed interested in accumulating assets. But as lifestyles change, new business opportunities are emerging in areas such as insurance, medical care, beauty and health-food products.

For 2017, Vietnam's per capita gross domestic product is around $2,300. In the two largest cities, Hanoi and Ho Chi Minh City, it is between $4,000 and $5,000, putting ownership of cars and home appliances within reach for many -- and creating an incentive for people to protect their lifestyles.

In November, a 59-year-old Hanoi driver bought a health insurance plan at a branch of Japan's Dai-ichi Life Insurance Co. of Vietnam. The annual premium of 36 million dong ($1,578) -- which includes coverage for his wife -- may seem expensive in a country where the average salary is between 6 million dong and 8 million dong. But that buys up to 500 million dong in coverage.

The driver said he felt reassured by the high-quality of health care that the insurance would cover.

In 2016, sales by Dai-ichi Life rose 50% from a year earlier to 5.3 trillion dong. That was up 11 times from 2007, when the company started operating in Vietnam.

Sales of life insurance, educational endowments and medical insurance for children are all on the rise. In the first half of 2017, insurance sales were up 21% to 47 trillion dong from the same period a year earlier, according to the Vietnam Insurance Association.

Sales of security-related devices are growing as well. Cam 360, a home security shop in Hanoi, has seen sales increase more than 10% over the past few months. High-definition cameras costing around 2 million dong and which can be remotely controlled by smartphones are selling well.

Canh Chi Viet, a 34-year-old shop salesperson, said that in the past most customers were restaurants and retailers. But now, more individuals are buying security cameras for their houses and apartments.

And last year, Viettel Group, a telecommunications company run by the defense ministry, released Kiddy, a smartwatch for children. The Kiddy can detect a child's location in real time using a global positioning system, and can place voice calls to 20 preregistered numbers.

The Kiddy sells for 1.4 million dong, with a monthly service fee of 30,000 dong to 60,000 dong. One Hanoi shop sold 100 units in November, more than double the figure of a year ago.

More people are also starting to think about safety on Vietnam's notoriously hazardous roads.

The number of students taking a motorcycle safety training course introduced by Honda Motor in 2010 jumped 20% to 170,000 in the July-September quarter. In 2016, the number more than doubled to 410,000 from the previous year.

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