Why is stuff so cheap in Vietnam? Visitors and locals are often surprised by how affordable goods and services are. In this article, let’s explore 11 reasons why these surprising prices, from travel and everyday life to business and manufacturing, reveal what makes Vietnam so affordable.
How cheap is stuff in Vietnam compared to other countries?
Vietnam stands out as one of the most affordable countries in the world. With an average monthly cost of living of around $616, it’s approximately 1.86 times less expensive than the world average. When compared to other countries, such as Western regions, most expenses are less than half the price. In Southeast Asia,Vietnam offers a 29 % cheaper than Malaysia and 20 % cheaper than Thailand.
Why is stuff so cheap in Vietnam? Main reasons explained
So, why is Vietnam so inexpensive? Here are the main reasons, covering travel, daily living, and business perspectives.
Travel perspective: Why is travelling in Vietnam so cheap?
Vietnam is an appealing travel choice because it combines rich culture, beautiful landscapes, and welcoming people with affordability that stands out globally. Here are the main reasons why Vietnam is considered a top destination for budget travelers.
1. Currency advantage and strong purchasing power for foreign visitors
The Vietnamese dong has a very low value compared to strong currencies such as the US dollar, the euro and the British pound. As of the time of writing, one US dollar equals about 25,400 dong, one euro equals about 27,600 dong and one British pound equals about 32,700 dong. In comparison, Thailand’s baht is much stronger, with one US dollar equal to only about 36 baht.
The reason is that Vietnam maintains a developing economy with lower income levels and a strong export orientation. The dong is also not an international reserve currency. For travelers, this means foreign money converts into a very large amount of dong, creating strong purchasing power in daily life.
2. Wide range of affordable accommodation options for every budget
The next thing is accommodation, which is one of the most important expenses for travelers. Accommodation in Vietnam caters to a wide range of budgets. Choices include dormitory hostels for backpackers, budget hotels, serviced apartments, and mid to high end hotels for those who prefer more comfort.
Average monthly costs (2025):
- Dormitory bed in a hostel: 4-7 USD per night in most tourist cities.
- Budget guesthouse or homestay: 10-15 USD per night with basic amenities.
- Mid range hotel (3 stars): 20-35 USD per night in cities like Hanoi, Da Nang, or Nha Tran.
- Serviced one bedroom apartment: 440-525 USD per month in Hanoi or Ho Chi Minh City
- Luxury resort in coastal areas: 80-120 USD per night, still accessible compared to regional alternatives
The main reasons are the low land and construction costs, the availability of local materials, and affordable labor in the service and building sectors. In addition, there is a very competitive hospitality market because Vietnam welcomes millions of international visitors every year. The high supply of hotels, guesthouses, and short term rentals keeps prices low across different categories.
3. Cheap and delicious local food
Food in Vietnam is famous not only for its taste but also for its affordability. A bowl of phở or a bánh mì on the street usually costs between 1 and 2 USD. Local rice dishes and noodle soups are in the same range, which allows travelers to eat three meals a day for less than 10 USD. Even in casual restaurants, a full meal with meat, rice, and vegetables rarely exceeds 3 to 5 USD per person.
Vietnamese food is cheap because the country has a strong domestic agricultural base. Fresh produce, herbs, and rice are grown locally, which reduces transportation and import costs. Street food culture also plays a role. Vendors operate with low overhead and high turnover, which allows them to keep prices low while still maintaining good quality.
4. Budget-friendly transport from buses to motorbike rentals
Getting around Vietnam is very affordable, making city travel easy for budget conscious visitors. Bus fares start at just 0.40 USD per trip, a Grab or taxi budget averages about 130 USD per month for a daily commute, and renting an automatic motorbike costs only 22 to 35 USD per month. Travelers who plan longer stays can also buy a motorbike for around 700 USD.
The reason transport remains inexpensive is the dominance of motorbikes, which are economical to maintain and extremely fuel efficient, together with government subsidies for public buses. This combination keeps daily travel accessible to both locals and visitors.
Living perspective: Why is everyday life in Vietnam inexpensive?
Vietnam is often ranked among the most affordable countries for both locals and expatriates. The combination of modest wages, competitive markets, and abundant local resources creates an environment where daily life costs significantly less than in many other countries.
1. Low basic living costs
Everyday expenses in Vietnam are modest. On average a single Vietnamese spends about 616 USD per month including rent and essentials, which is around 1.8 times cheaper compared to the global average cost of living. The reasons? It all comes down to lower wages, abundant local food supply, and competitive housing and transport markets, which keep the cost of basic living manageable for both locals and foreigners.
Here’s a detailed breakdown of the cost of living, showing how affordable daily expenses can be for both individuals and families compared to global standards:
| Cost of Living in Vietnam | One Person | Family of 4 |
| Total with Rent | $616 | $1,586 |
| Without Rent | $321 | $1,076 |
| Rent & Utilities | $295 | $510 |
| Food | $200 | $518 |
| Transport | $50.5 | $144 |
2. Affordable local goods and services compared to imports
Living in Vietnam feels inexpensive mainly because most essentials are produced locally. A kilo of rice costs about 1 USD and a basic haircut is only 2-3 USD, while locally made clothes in markets can be found for 3-5 USD. In contrast, imported goods quickly drive costs up. A pair of imported sneakers may cost 70-100 USD, nearly the same as in the US or Europe, and imported fruits such as apples or cherries are often several times the price of local produce.
3. Lifestyle choices that can make your expenses higher or lower
In fact, the cost of living in Vietnam depends heavily on lifestyle choices. It can be inexpensive if you eat local dishes like phở or bánh mì for 1-2 USD and rent a modest apartment in a local area for 220-500 USD per month. In this case, the total cost of living for a single person can stay around 600-700 USD per month only, close to the national average.
Things are the other way around if you prefer imported goods and expat services. A single meal in a Western restaurant often costs 10-15 USD, pushing a monthly food budget to 500 USD or more, and a serviced apartment in expat districts can easily exceed 1,200 USD per month. With these choices, an individual may end up spending double the typical Vietnamese cost of living, at over 1,500 USD monthly.
Business perspective: Why sourcing and manufacturing in Vietnam cost less?
Vietnam attracts global companies because production costs here remain lower than in many competing markets, thanks to affordable labor, reliable supply chains and supportive trade policies.
1. Competitive labor costs
The first thing to note is the advantage of labor expenses. Average manufacturing wages in Vietnam are considerably lower than in many regional neighbors. For example, monthly wages in Vietnam’s manufacturing sector are around 300-350 USD, while in China the average exceeds 800 USD and in Thailand it is above 400 USD.
Such a gap allows businesses to save significantly on production costs without compromising labor availability or skills. The main reasons are Vietnam’s lower cost of living, a young workforce with a large share employed in manufacturing, and government policies.
2. Strong manufacturing base in textiles, footwear, furniture, and electronics
Vietnam now ranks at the top among Asian exporters in several categories. It is the second largest exporter of footwear worldwide, supplying over 1.3 billion pairs annually and holding about 10 percent of global market share.
In textiles and apparel, Vietnam exported goods worth 44 billion USD in 2024, placing it among the top three in the world (ITC Trade Map). The nation’s furniture exports reached 17 billion USD in 2023, making it the leading supplier in Southeast Asia. Electronics are also booming, with smartphones and components accounting for more than 30 percent of total exports.
Together, these industries show that this Asian supplier has built a diversified and competitive manufacturing base that reduces sourcing risk and lowers cost for foreign buyers.
3. Trade agreements and export incentives
Vietnam’s participation in multiple trade agreements and its export incentives help lower manufacturing costs. Agreements with the EU, US, and ASEAN reduce tariffs and streamline customs procedures, making exports more competitive. In particular, the EU-Vietnam Free Trade Agreement (EVFTA) is set to eliminate 99% of tariffs within seven years, while the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) already removes about 95% of tariff lines among its members.
Local policies also offer tax breaks and support for exporters. As a result, businesses have more room to expand efficiently while keeping costs under control, with exporters in priority sectors often enjoying corporate income tax reductions from 20% to 10% for specific periods.
4. Factory relocation from China to Vietnam
Many firms follow a “China+1” strategy to avoid rising costs and risks in China. Vietnam is less expensive, with wages about half of China’s average and strong trade agreements that keep exports competitive. Samsung, Nike, Adidas, and Apple suppliers like Foxconn and Luxshare have all shifted significant production to the country to cut costs while staying close to China’s supply chain.
Cross-cutting factors that keep prices low in Vietnam
Several structural and cultural factors contribute to the overall affordability of goods and services in Vietnam. From labor costs to consumer habits, these elements work together to maintain low prices across the economy:
- Abundant local production and raw materials: Vietnam produces a large portion of its food, textiles, and other essentials domestically, minimizing reliance on imports.
- Strong competition among local businesses: High competition encourages companies to price products and services affordably to attract customers.
- Consumer culture favoring affordable prices: Vietnamese consumers tend to prefer value-for-money purchases, reinforcing the market for lower-cost goods.
- Favorable exchange rates for foreign visitors: The Vietnamese dong’s relative weakness against major currencies allows tourists and expatriates to enjoy greater purchasing power.
Conclusion
That concludes our article on why is stuff so cheap in Vietnam. To sum it up, the country’s low prices are driven by affordable labor, strong local production, competitive markets, and favorable exchange rates, making it attractive for travelers, residents, and businesses. However, while costs are low, quality and safety can vary, so it’s important to stay mindful when making choices. Considering these factors ensures that you enjoy the benefits of affordability without compromising on reliability or comfort.
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