VIETNAMESE CONSUMERS CONTINUED TO SHOW CONFIDENCE IN THE FINAL QUARTER OF 2018
Vietnam ended 2018 as the fourth most confident country globally
In the final quarter of 2018, Vietnam continued to be placed among the most optimistic countries globally. It is ranked 4th in the world for having the most positive consumers with Consumer Confidence Index of 122 percentage points (pp) after India, Philippines and Indonesia, whose score was 133, 131 and 127 respectively; according to the latest The Conference Board® Global Consumer Confidence™ Survey in collaboration with
Nielsen, a global measurement company.
Compared to Quarter 3 2018, Vietnam CCI score decreased by 7 points, which is highly predictable, according to Ms. Nguyen Huong Quynh, Managing Director, Nielsen Vietnam. “With 2019 just around the corner, Vietnamese people are understandably anxious about their year-end bonuses and Tet holidays spending which is impacted by not really positive previous Tet experience” explained Quynh. However, with steady
uptrend CCI score throughout the year, Vietnam’s overall confidence level as 2018 concluded is still high above the global and region’s average (107 pp and 117 pp respectively).
Globally and regionally, many countries (39/64 worldwide and 7/14 in Asia Pacific) also experienced similar CCI downtrend due to uncertainties caused by rising costs and political challenges. Within South East Asia, Malaysia was the country with the biggest CCI score lost in Q4 (-9 pp vs Q3 2018) and finished the year with 118 points. Similar to Vietnam, this country witnessed record growth in Q3 but the index normalised in the year’s final quarter to around Q2 level.
JOB SECURITY AND HEALTH ARE STILL VIETNAMESE’S TOP CONCERNS
In Q4 2018, Vietnamese consumers continued to rank job security (43%, +3% vs Q3 2018) and health (43%, +3% vs Q3 2018) as their top two key concerns while 27% pointed to work-life-balance (27%, +1% vs Q3 2018) as the third most cared about matter.
This quarter, the nation’s economy moved down one spot on the key concern list with only 20% of respondents indicating it’s their worry (compared to 27% respondents in Q3 2018). This observation corresponded with an improved sentiment about Vietnam economic status: only 36% believed the country is in recession compared to 41% in Q3 2018. That being said, Vietnamese are less positive about their job prospects and personal finances. Around three-quarters of people surveyed believed they would have good or excellent job prospects (75%, -5% vs Q3 2018) or would be in good or excellent financial states in the next 12 months (76%, -6% vs Q3 2018).
Other key areas of attention of Vietnamese consumers were their family members: they reported to be more attentive about parents’ welfare and happiness (19%) and children education and/or welfare (8%).
“With inflation well-managed through-out the year (3.4% in Q4 2018) that led to more stable and predictable living costs, we can see that food prices or utilities bills are no longer consumers’ worrisome points in this quarter. With this extra piece of mind, they can now divert their care to more important matters such as their children’s education and future” explained Quynh.
Vietnamese consumers continued to lead the region in saving intentions
Vietnam continued to place first in Asia Pacific in Q4 2018 for having the region’s most avid savers (78%, +6% vs Q3 2018, the highest figure since Q3 2016), followed by Hong Kong (71%), India (68%) and Thailand (67%). Noticeably, even with this considerable increased intentions for saving, Vietnamese’s willingness to spend on big-ticket items such as new clothes, holidays or out-of-home entertainment remained the same or even increased slightly. In compensation, they were less likely to spend on new tech products (43%, -4% vs Q3 2018), home improvements or decorations (39%, -9% vs Q3 2018) and medical insurance premiums (36%, -5% vs Q3 2018).
“Vietnamese’s culture is saving. Coupled with the above-mentioned worries for the
upcoming year, it is no surprise that they want to save even more as the year ended. However, we should not jump into the conclusion that the observed reduced spending intentions on some items are permanent. Historical data showed that Vietnamese’s willingness to spend on technology or health-related products is on the rise. Therefore, enterprises should monitor the trend closely to not miss out on opportunities” suggested Quynh.