Index falls in second quarter as most respondents beleive Vietnam is experiencing a recession.
Reversing the performance in previous quarters, the Vietnam Consumer Confidence Index (CCI) declined to a score of 104 in the second quarter, a fall of 8 percentage points compared to the first quarter - the biggest quarterly decline in Asia-Pacific, according to the latest CCI released on July 27 by Nielsen, a global information and measurement company.
Vietnam’s retail environment has changed from one of the fastest growing markets in 2012 to one that’s struggling to retain its growth, with sales levels between 2-3 per cent for most of the last 12 months, according to Mr. Vaughan Ryan, Managing Director of Nielsen Vietnam.
“For the first time in well over a decade Vietnam experienced a negative CPI in February, and foreign direct investment was down by over 20 per cent in the first quarter against last year,” Mr. Ryan said. “Consumers are feeling less optimistic about their immediate future but they are confident in the longer term, as most expect the economy will improve in the year ahead.”
The report also reveals that confidence levels in Southeast Asia remain relatively high despite declining in most countries in the second quarter. The Philippines was the only market where consumer sentiment increased, gaining seven points to rise to a score of 122 and making Filipinos the second-most confident consumers globally.
Nielsen Consumer Confidence Index, Southeast Asia, Q2/2015
Source: Nielsen Global Survey of Consumer Confidence and Spending Intentions, Q2/2015
When it comes to savings, consumers in Vietnam keep the highest (73 per cent), followed by the Philippines (72 per cent), Indonesia (69 per cent), Singapore (66 per cent), Thailand (66 per cent), and Malaysia (65 per cent). Intention to change spending to save on household expenses continues to be a top priority for Vietnamese consumers, according to the report.
Eighty-six per cent of Vietnamese consumers have adjusted their spending habits over the last 12 months to save on household costs because most of them believe the country is in an economic recession at the moment.
More than three out of five Vietnamese consumers (60 per cent) have reduced their spending on new clothes and gas and electricity. Around half have cut down on out-of-home entertainment (57 per cent) and delayed upgrading their technological devices (48 per cent).
Top actions taken by Vietnamese consumers to save on household expenses Q2/2015
Source: Nielsen Global Survey of Consumer Confidence and Spending Intentions, Q2/ 2015
However, after covering essential living costs, nearly half of Vietnamese consumers are willing to spend on big ticket items such as holidays (45 per cent) and new clothes as well as home improvements (35 per cent).
The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns, and spending intentions among more than 30,000 respondents with internet access in 60 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.