Confidence at highest level since 2008, according to TNS's Consumer Pulse study.
TNS’s Consumer Pulse study, released recently by the global market research consultancy, reveals that consumer confidence is at its highest level since 2008.
The study also forecast high levels of planned spending around the Tet holiday, predicting a strong start for 2016.
“As Vietnam prepares for a new year with the Tet holiday just around the corner, TNS Vietnam is also preparing to cross a significant milestone,” said Mr. Ashish Kanchan, Managing Director of TNS Vietnam.
Consumer Pulse is a quarterly report available for purchase, which surveyed respondents in both Ho Chi Minh City and Hanoi to discover their feelings and outlook towards Vietnam’s economy. In celebration of the Lunar New Year, in this edition TNS also included several questions to better understand how Vietnamese are planning to ring in 2016, the Year of the Monkey.
Outlook then and now
2016’s first edition of Consumer Pulse produced a lot of numbers that businesses in Vietnam should be happy to see. Across a variety of questions ranging from employment outlook to flood prevention and drainage, Vietnamese are optimistic about improvements. Using its historic data, TNS can see how much things have changed across a variety of measurements.
Consumer confidence has shifted throughout the years. In 2008, 89 per cent held a positive outlook for Vietnam’s economy, believing it would improve over the next 12 months. The consumer confidence index has fluctuated over the years but is now at 90 per cent, a rebound from the 2012-2014 slump and a great improvement from 2015.
Rising confidence appears to be spurring spending. In 2008 the savings vs. expenditure rate was 22 per cent / 78 per cent. Today those numbers are 10 per cent / 90 per cent. In fact, since just last year, planned expenditures have grown by 10 per cent, indicating an increase in spending in 2016.
When asked about their intention to spend more or less in 2016 compared to 2015, only 4 per cent of Vietnamese consumers said they plan to spend less. Optimism about the future and the new year can also be seen across a variety of measurements that were conducted in the study.
Monthly expenditure versus monthly saving (%):
For the Tet holiday, Vietnamese consumers report a variety of interesting spending and behavioral plans. Consumers report that the main category of spending is for self and household, with 57 per cent spending between VND5.5 million and VND15 million. Within the category “self and household spending”, food, clothing, and home improvements make up the biggest percentage of spend. “Gifting/supporting others” and “lucky money” accounted for a smaller percentage of Tet spending, with 66 per cent of consumers reporting they would spend just VND1 million to VND5.5 million on each area. Within the gifting category, cash gifts/envelopes, food, and beer led spending, with 45 per cent, 32 per cent, and 29 per cent, respectively. Overall, 93 per cent of Vietnamese plan to increase their normal spending for Tet. Overall consumers are estimating to spend VND14,208,956 over Tet this year, or VND4,000,000 more than in 2015.
Within the travel category spending is expected to increase by VND283,000 and food for self/household is to increase VND261,000. Supporting others is even more dramatic, where food spending is planned to increase VND502,000, the largest of any measured category.
Vietnamese desire many things for Tet, including clothes and food & beverages. The most desired category is fashion/accessories, at 25 per cent. It is not just necessities Vietnamese want for Tet though, as 19 per cent want a vehicle for Tet, 11 per cent high-tech devices, and 10 per cent ornamental plants.
Not only did TNS’s Consumer Pulse reveal big plans for spending increases, it also discovered when consumers plan to do their holiday shopping. Tet shopping starts five or six weeks prior to Tet with a peak two or three weeks prior. Only 30 per cent of consumers wait for the last week before the holiday to begin shopping.
Traveling is also a common desire among Vietnamese, with central Vietnam and Nha Trang being the most favored, followed by Da Lat, Da Nang, and Sapa. One in four Vietnamese want to travel overseas, with Thailand, Singapore, and Japan being among the most desired destinations.
As a holiday, Tet still holds a lot of traditional and family significance for Vietnamese, with 93 per cent reporting that Tet is a time to pay respects to the ancestors. Tet traditions are also still widely practiced. Ninety-three per cent report they always clean up the house before the Lunar New Year. The same percentage also try to ensure the first day of the new year is perfect, since they believe it will determine luck for the whole year. Visiting a pagoda is also considered an important event, as well as visiting one’s hometown.
“Our survey responses indicate growth potential in consumer spending within the areas of transportation, education, entertainment, food & beverages, and fashion and accessories,” Mr. Kanchan said. “In the immediate future we also see planned increased Tet spending across many areas, including travel, as consumers plan to return to their hometown, visit local destinations, and even plan trips overseas. We look forward to conducting the remaining Consumer Pulse studies this year to see how these positive numbers influence the year to come.”