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Q2 consumer confidence at five-year high

Released at: 16:54, 23/08/2017

Q2 consumer confidence at five-year high

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Latest Nielsen reports finds Vietnamese the fifth-most optimistic globally.

by Ngoc Chi

Consumer confidence in Vietnam continued to see significant improvements in the second quarter that helped the country become the fifth most optimistic globally, with an index score of 117, 5 points higher than in the fourth quarter of 2016 and the highest for the last five years, according to the latest Nielsen’s Consumer Confidence Index released on August 23.

According to Ms. Nguyen Huong Quynh, Managing Director of Nielsen Vietnam, in contrast to the volatility of the fast-moving consumer goods (FMCG) market in the first half of the year, consumer sentiment in Vietnam is heading upwards. The upsurge is due to consumers’ optimistic perceptions of personal finances and immediate spending intentions. “Once again, what we are seeing here is not reflected in the performance of the FMCG market but rather the future hopes and sentiments of Vietnamese consumers,” she said.

Vietnamese consumers pay closer attention to what is happening, are easily influenced by word of mouth and social media, etc., and quickly take action, which makes them continually evolving consumers. Manufacturers and retailers therefore need to have a “real time” understanding of emerging consumer trends and take faster action to meet their demands.

The report indicated that consumers continue to save for the future but are more willing to spend on big ticket items.

Compared to last year, consumers in Vietnam were no longer the most avid saver globally. The study revealed that 63 per cent of Vietnamese put their spare cash into savings (compared to 76 per cent in the previous quarter), after Thailand (69 per cent), and Singapore and Indonesia (66 per cent).

Along with channeling spare cash into savings, consumers in Vietnam continued to spend more on big ticket items. The survey showed that after covering essential living expenses, around one in three Vietnamese consumers were willing to spend on big ticket items such as holidays (38 per cent), new clothes (36 per cent), new technology products (31 per cent), home improvements (30 per cent), and out of home entertainment (29 per cent).

For the first time ever, the report showed that 23 per cent of Vietnamese consumers pay health insurance premiums.

“Vietnamese consumers’ lifestyles are evolving fast and consumers are more willing to spend on big items to upgrade their living,” said Ms. Quynh. “This reflects their strong desire for a better life.”

In this quarter, the Top 5 concerns of Vietnamese consumers remained the same as the last quarter of 2016. Job security again topped the list, with 48 per cent, followed by health (38 per cent), work/life balance (25 per cent), the economy (20 per cent), and parents’ welfare and happiness (17 per cent).

“While consumers continue to be upbeat about their future, financial security remains one of their top priorities,” Ms. Quynh noted. “Both job security and economic outlook have a direct impact on consumers’ degree of financial security, and hence remain key concerns. It’s no surprise that in the current context, consumers are looking for healthier lives or even total wellness. Thus, this trend gives both manufacturers and retailers opportunities to innovate and develop the next generation of offerings.”

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