The COVID-19 pandemic has transformed the personal finance landscape, with consumers now more conservative about their short-term spending habits and more prudent in their long-term financial plans.
|While consumers are more conservative in their spending, they have also become more modern |
According to the Personal Finance in Vietnam Report 2021 by YouGov, Vietnamese consumers' confidence in the improvement of the COVID-19 situation has shot up since lockdowns ended in Vietnam, with optimism rising from around 30 per cent in September to almost pre-pandemic levels of 80 per cent in October. However, despite the positive outlook for the "new normal", families are still dealing with the impact of COVID-19 on their personal finances, which have seen a significant hit in 2021 compared to previous outbreaks.
Just under half of all people (48 per cent) have seen their income fall in 2021. More than a quarter (28 per cent) reported a slight decrease of between 10-20 per cent. Meanwhile, one-fifth (20 per cent) saw an even sharper fall of at least 20 per cent.
On a positive note, over one-third of Vietnamese (38 per cent) were able to increase their savings during the pandemic, with work-from-home mandates leading to reduced spending on non-essential items such as travel, leisure, and eating out. This is the highest rate in the region, just ahead of Hong Kong and far ahead of Singapore. However, others were less fortunate, with more than a third (34 per cent) of Vietnamese dipping into their savings and a fifth (21 per cent) borrowing cash to get through the outbreak.
This has caused consumers to re-evaluate their current spending habits and re-assess their long-term financial plans. Over half (53 per cent) of Vietnamese cut down on non-essential spending in the last six months. Meanwhile, more than four-fifths (81 per cent) plan to do so in the future.
Vietnamese consumers are now some of the most prudent in the world. Two-thirds (67 per cent) are more careful with their personal finances than before the pandemic. Meanwhile, a third (34 per cent) prioritise protecting their household finances in case of emergencies. That is almost 10 per cent higher than the global average. Vietnamese are also more keen to invest and reduce their debts than the average consumer elsewhere in the world.
However, while Vietnamese consumers are becoming more conservative in what they spend, they are also becoming more modern in how they spend it. E-commerce grew even more popular in 2021, while cashless transactions saw a boost during lockdown and e-wallets continue to gain traction. Consumers have become more confident managing their finances online and this digital financial trend is set to continue post-pandemic.