Vietnam's consumer confidence remained stable in the second quarter of 2018 with an index score of 120 percentage points (ppts), down four points compared to the previous quarter, according to Nielsen's latest survey.
"The consumer confidence level in Vietnam remains on par with that of the second quarter last year, well above the global average and the neutral threshold. The country still remains its highest level for two years," said Nguyen Huong Quynh, managing director of Nielsen Vietnam.
"The higher trend in sentiment observed in the last couple of quarters, coupled with the continued improvement in key economic indicators has led to the growth of some categories such as travelling, out-of-home activities and the latest technology. This likely impacted fast moving consumer goods (FMCG) sales in the second quarter, with overall growth of just 2.7%," Huong added.
Job security and health remain Vietnamese' top key concerns
Vietnamese continued to rank job security (46%, up 3 ppts against the previous quarter) and health (42%, up 1 ppt) as their top two key concerns, while 22% of the survey respondents indicated the nation's economic status (22%, down 1 ppt) and work-life-balance matter (22%, down 1 ppt) as the third most worrisome.
However, nearly five in ten respondents were feeling positive that the country would be out of an economic recession in the next 12 months (46% compared to 38% in the first quarter of 2018).
Vietnamese consumers also continued to feel upbeat on their personal state of finance with 76% perceiving that their state of personal finances to be either good or excellent in the next 12 months (down 1 ppt compared to the first quarter) but nearly half of respondents stated that it is not a good time to buy.
Other key areas of concern were increasing utility bills (11%), parents' welfare and happiness (11%) and children education and/or welfare (8%).
"The Vietnamese economy performance has gained momentum during the last three quarters with GDP growing at around 6 to 7%, yet the top concerns for Vietnamese consumers remain with the stability of jobs and the economy. Many still believe that the country is still in recession and it is not a good time to spend, further highlighting that there are other societal matters that could waver their optimism towards a better life that they wish to lead", noted Quynh.
"Despite the fact that none of the economic KPIs indicate that the country is in recession, consumers continue to believe that the current situation is not really positive and the future is yet to define. This sentiment could significantly influence consumers' spending and saving patterns," she added.
Saving and spending at the same time
However, after covering essential living expenses, Vietnamese consumers were eager to spend on big-ticket items as they wish to lead a better life. Nearly half of consumers were willing to spend on holidays (49%). And this desire gradually grew over the past year.
Besides vacations, 46% of Vietnamese consumers would like to spend their spare cash on new clothes and new technology products. In addition, 43% wanted to divert any spare cash towards out of home entertainment activities and 38% wanted to spend on home improvements/decoration. More noticeably, spending on medical insurant premiums keeps increasing with this intention gaining three points in this quarter (41%, up 3 ppts compared to the previous quarter).
"Saving is Vietnamese' DNA. So, Vietnamese consumers still continue this practice for their and their children's future. With health and wellbeing becoming the top key priorities for our consumers, products and services that can adapt to a great demand in healthcare will earn their way to the top of the mind of Vietnamese people," Quynh explained.
