Buyers’ confidence sinks but still buoyant

Clothes are still a good fit for local consumers

The survey, Nielsen’s bi-annual Global Online Consumer Opinion Survey, shows that Vietnamese consumer confidence sank 11 points during the first six months of this year, ranking ninth within the top 10 most optimistic countries.

The survey was conducted by Nielsen Customised Research, and reached more than 28,000 internet users in more than 50 countries worldwide. “Vietnam is not the only country showing a downward trend. Most countries across the globe have declined,” said Sarah Duchazeaubeneix, AC Nielsen’s manager of client solutions.
Duchazeaubeneix said it would be hard to predict what would happen within the next six months.

“We know confidence in the economy is one of the key concerns for Vietnamese consumers, although they do not perceive the country to be in recession at this point in time. So overall less optimistic, but still optimistic,” he said.

According to the survey, economic issues, job security and work-life balance have become the consumer’s biggest concerns at present. Most Vietnamese consumers do not fear immediate economic recession, but if the economy were in a recession, 74 per cent of the respondents would fear inflation.

Vietnam’s inflation rate in June peaked at 18.44 per cent against last December. Major price hikes occurred in food, foodstuffs and consumer goods. “In Vietnam, where family remains one of the strongest values, work-life balance is a big concern,” said the survey.

Duchazeaubeneix said that Vietnamese consumers were changing their buying habits to better control the money they spend. “Depending on the categories, they may reduce dosages, reduce purchase frequency, switch to cheaper brands, purchase smaller sizes and in some cases they may even stop buying into certain categories,” she said.

Food and beverages remained the main expenses for households, representing about 27 per cent of household income spent. However, Vietnamese consumers were global top spenders on technology and new clothes, as they have spare cash, accounting for 53 per cent and 51 per cent of respondents, respectively.

Although the Vietnamese economy is in a tough period, a recent report from management consulting firm A.T. Kearney also pointed out that Vietnam was the most attractive emerging market for retail investments.

According to the AC Nielsen survey, 44 per cent of respondents said their state of personal finances over the next 12 months was still good, 9 per cent said it was excellent and only 4 per cent were in a bad state.
“There are still a lot of opportunities in Vietnam, both for local and international retailers,” said Duchazeaubeneix.