Asset polarization and consumption trends: Decoding the K in the economy.

At the end of March, in a café on Le Duan Street, a consultant talked about the house he is building in Ho Chi Minh City, the result of stock market profits from 2025. He frankly admitted to being somewhat lucky to work in the financial sector, with income and opportunities better than average.

In a different context, at a small office in Xuan Hoa Ward, Ho Chi Minh City, colleagues were discussing cutting expenses and managing to balance their finances in the current situation.

This story represents two coexisting financial states: one side still has room to accumulate assets and actively spends, contributing to economic growth, while the other is forced to cut spending and adopt a defensive stance. A typical slice of the K-shaped economy, where opportunities and pressures are increasingly polarized.

The wealth effect

The term “K-shaped economy” became popular after the COVID-19 pandemic to describe divergent economic paths, with one branch going upward for high-income groups and another going downward for the rest of society.

In the United States, data from Moody’s Analytics indicates a stark reality: the economy is polarizing in a K-shaped pattern. Thanks to the “wealth effect,” the richest 10% have sharply increased spending, accounting for over 45% of total consumption. The remaining 60% of households are under heavy pressure from inflation and record-level debt.

Looking back at the domestic market, this story partly reflects slices of the wealth effect. In 2025 alone, the VN-Index rose more than 40%, but the market’s growth was concentrated in a small group of stocks. Even investment funds were left behind the overall market’s rise, as the top 10 stock funds with the highest performance in 2025 ranged only from 17.2% to 36.8%.

In Vietnam, the K-shaped economy is not just a macroeconomic theory but the essence of an uneven recovery. A senior lecturer at the Fulbright School of Public Policy and Management describes the upward branch as including export-oriented sectors, public investment, and tourism, while the downward branch includes domestic consumer goods production. Weak domestic purchasing power, coupled with competitive pressure from Chinese imports, is making retail and domestic production businesses struggle.

Consumption polarization

A report on Vietnam Consumer Trends 2026 by Cimigo indicates that Vietnam’s GDP per capita reached about $4,900 in 2025, but consumer behavior is increasingly resembling much more mature markets. Vietnamese consumers are still spending, but more cautiously, expecting higher value and accepting less risk or poor experiences than before. Despite efforts to control inflation, pressure from exchange rates and fluctuations in imported raw material prices is directly eroding the disposable income of low- and middle-income households.

Analyzing the shift in consumption trends in Vietnam, a Director of Business at Mirae Asset Finance Vietnam commented: “We are witnessing a polarized consumption restructuring process, not just a simple upscaling. Consumers increasingly prioritize ‘less but high quality,’ reducing spending on short-term common products to focus on areas with long-term value such as education, healthcare, real estate, and high-end goods.”

She predicts that within the next 5-10 years, the domestic economy is likely to stratify clearly, with one side being a booming high-end market and the other being a mass market that must adapt through business model innovation and technology application to maintain competitiveness.

This is both an opportunity and a challenge for businesses and policymakers. The high-end segment will likely expand strongly, driving the development of supply chains, after-sales services, and quality standardization. Mass-market sectors will be forced to restructure, focusing on sustainable value and experience to retain customers.

In

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Le Duan Street

Le Duan Street is a historic thoroughfare in central Hanoi, Vietnam, originally named after the French colonial administration. It was renamed to honor Lê Duẩn, a key leader of the Communist Party of Vietnam. The street is notable for its proximity to important landmarks like the Ho Chi Minh Mausoleum and the Presidential Palace, and it played a significant role during the Vietnam War as a site for political and military activities.

Ho Chi Minh City

Ho Chi Minh City, formerly known as Saigon, is Vietnam’s largest city and economic hub. It was the capital of French Indochina and later of South Vietnam before the end of the Vietnam War in 1975, after which it was renamed in honor of revolutionary leader Ho Chi Minh. Today, the city blends historic French colonial architecture with modern skyscrapers, and sites like the War Remnants Museum and Notre-Dame Cathedral reflect its complex past.

Xuan Hoa Ward

Xuan Hoa Ward is a residential and administrative area located in Phuc Yen City, Vinh Phuc Province, Vietnam. Historically, it developed around the Xuan Hoa paper mill, a major industrial facility established during the French colonial period, which played a key role in the region’s economic growth. Today, the ward blends its industrial heritage with modern urban development, serving as a local hub for commerce and community life.

United States

The United States of America is a vast federal republic in North America, founded in 1776 with the Declaration of Independence from Britain. Its history includes westward expansion, the Civil War over slavery, and its rise as a global superpower in the 20th century. Culturally, it is a diverse nation shaped by immigration, known for landmarks like the Statue of Liberty, the Grand Canyon, and Washington, D.C.

Moody’s Analytics

Moody’s Analytics is a financial intelligence and data analytics firm that provides economic research, risk management tools, and credit analysis services to businesses and governments worldwide. It was established as a separate entity from Moody’s Corporation, which traces its roots back to 1900 when John Moody founded Moody’s Investors Service to publish financial manuals on stocks and bonds. Today, Moody’s Analytics leverages decades of historical data and advanced modeling to help clients assess market risks and make informed decisions.

Fulbright School of Public Policy and Management

The Fulbright School of Public Policy and Management, located in Ho Chi Minh City, Vietnam, was established in 2016 as part of the Fulbright University Vietnam. It was founded with support from the U.S. and Vietnamese governments to provide graduate-level education in public policy and management, aiming to train future leaders and promote good governance. The school builds on the legacy of the Fulbright Program, which has fostered academic exchange between Vietnam and the United States since the early 1990s.

Cimigo

Cimigo is a market research and data analytics firm specializing in emerging markets, particularly in Asia and Africa. It was founded in 2004 with a focus on providing consumer insights, brand tracking, and retail measurement services. The company is known for its expertise in helping businesses understand complex, fast-growing economies.

Mirae Asset Finance Vietnam

Mirae Asset Finance Vietnam is a financial services company that is part of Mirae Asset Financial Group, a major South Korean investment firm. Established to provide consumer and corporate lending, as well as investment services in Vietnam, it has grown alongside the country’s rapidly developing economy. The company reflects South Korea’s increasing economic influence in Vietnam, particularly in the finance and investment sectors.