Vietnam’s Consumer Confidence Reaches New High
Vietnam’s consumer confidence in the first quarter of 2018 rose nine points compared to the last quarter of 2017, to its highest level in 10 years. The positivity about the state of personal finances and local job prospects has helped Vietnam emerge as the fourth most optimistic country in the world in Q1 of 2018. Consumer confidence was measured through the Conference Board Global Consumer Confidence Survey in collaboration with Nielsen.
Historically, consumer confidence in Southeast Asian countries continues to be higher than in mature economies. Consumer confidence in the region rose from 119 points in Q4 of 2017 to 121 in Q1 of 2018. In Q1 of 2018, India led the overall rankings, followed by the Philippines, Indonesia, and Vietnam.
Thailand, Malaysia, and Singapore ranked eighth, 10th, and 25th respectively in the global rankings. Vietnam and Malaysia featured among the top five nations with the highest growth in consumer confidence.
The reason for the rise in consumer confidence in the region is largely attributed to the economic growth, with major economies growing between five and seven percent in the last year. In addition, the rise in FDI and disposable income have also helped boost confidence.
In the last quarter of 2017, Vietnam ranked as the seventh most optimistic country in the world. By Q1 of 2018, it consumer confidence levels rose by nine points to 124, compared to Q4 of 2017, making it the fourth most optimistic country in the world.
According to the survey, as household incomes continue to grow, consumers in Vietnam are looking to spend more on high-priced retail items. Once the living expenses were covered, 51 percent of the consumers were willing to spend on new clothes. Consumers wanting to spend on holidays rose by two points in Q1 of 2018, accounting for 46 percent of the consumers.
In addition, around forty percent of the consumers spent on new technology products (46 percent), out of home entertainment (43 percent), and home improvements (42 percent).
The highest spending was seen in medical insurance premiums, which grew by nine points in Q1 of 2018, and accounted for 38 percent of the consumers.
Savings continue to remain a priority in Southeast Asia, including Vietnamese consumers. Around 67 percent of consumers in the region put their spare cash into savings.
In Q1 of 2018, 73 percent of the consumers in Vietnam saved their spare cash, compared to 72 percent in Q4 of 2017.
The top five concerns amongst Vietnamese consumers in 2018 was the same as Q4 of 2017. The biggest concern was job security for 43 percent of the respondents, followed by health at 41 percent. 23 percent of the consumers mentioned work/life balance and economy, while 16 percent mentioned happiness as the other major concerns.
Going forward, the growth in the economy and foreign investments will continue to boost incomes leading to higher consumer confidence. Food and beverages, along with retail, education, and healthcare will continue to attract majority of the consumer spending, but savings will continue to take precedence over discretionary spending.
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