Latest Nielsen survey notes willingness to spend at healthy levels in period just prior to Tet.
Consumer confidence in Vietnam saw improvements in the fourth quarter of 2015, helping the country become the sixth most optimistic globally, with an index score of 108 (an increase of 3 percentage points (ppt) compared to the previous quarter), according to the latest Consumer Confidence Index released by Nielsen on February 17.
“We continue to see ever-increasing confidence among Vietnamese consumers,” said Mr. Vaughan Ryan, Managing Director of Nielsen Vietnam. “The build-up and sentiment towards the Tet period has been one of excitement and improvement, with consumers’ willingness to spend increasing along with retailers’ sentiment improving.”
Saving intent grows
Overall, Southeast Asian consumers are among the world’s most avid savers, with close to 71 per cent channeling their spare cash into savings. When it comes to savings consumers in Vietnam remain the highest globally (with 79 per cent, an increase of 1 ppt), followed by Indonesia (75 per cent), the Philippines (65 per cent), Singapore (64 per cent), Malaysia (63 per cent), and Thailand (60 per cent).
Nielsen Consumer Confidence Index, Southeast Asia, Q4 2015
Source: Nielsen Global Survey of Consumer Confidence and Spending Intentions, Q4’ 2015
In view of the increasing general cost of living in the country, the intention to change spending to save on household expenses continued to be the top priority for Vietnamese consumers.
Eighty-five per cent adjusted their spending habits over the last 12 months to save on household expenses. Sixty per cent have tried to save on gas and electricity and reduced their spending on new clothes compared with this time last year. Around half have cut down on out-of-home entertainment (54 per cent) and telephone costs (42 per cent).
However, after covering essential living expenses, around two in five Vietnamese consumers are willing to spend more on big ticket items such as holidays and vacations (44 per cent, an increase of 2 ppt) and new clothes (44 per cent, up 5 ppt), home improvements/decorating (40 per cent, a decrease of 1 ppt), new technology products (38 per cent, an increase of 2 ppt), as well as out-of-home entertainment (37 per cent, up 3 ppt).
Facts related to Vietnam's Consumer Confidence Index, Q4 2015
Source: Nielsen Global Survey of Consumer Confidence and Spending Intentions, Q4 2015
Consumers’ priorities are slowly changing in Vietnam, according to Mr. Ryan.
No longer is putting a meal on the table satisfactory. Most people are wanting and getting a better life but with this comes different expectations and priorities.
More people aspire to own their own home or to go on holidays for longer, hence the need for increased savings. “There is also an underlying pessimism towards the market and whether or not it will continue to grow,” he added.
Economic uncertainty lingers as one of the main concerns besides health and job security, according to the report.
Recessionary sentiment still grips 52 per cent of Vietnamese consumers, who believe that the country is still in an economic slump. Thirty-seven per cent also feel that local job prospects will not be so good or even bad in the coming year. Economy uncertainty and job security therefore remain two of consumers’ key concerns, with 24 per cent of respondents being worried about the country’s financial status and 25 per cent about their jobs.
However, 34 per cent of consumers cite health as their greatest and second greatest concern over the next six months. Other major concerns making the Top 10 in the quarter included work/life balance, increasing utility bills and food prices (18 per cent), crime (9 per cent), children’s education and increasing fuel prices (8 per cent), and debt (7 per cent).
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted from November 2 to 25, 2015 and polled more than 30,000 online consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa, and North America.