Increasing nine points compared to the last quarter of 2017 on the back of increased positivity about local job prospects and the state of personal finances, Vietnam’s consumer confidence index reached its highest score in the last decade in
Increasing nine points compared to the last quarter of 2017 on the back of increased positivity about local job prospects and the state of personal finances, Vietnam’s consumer confidence index (CCI) reached its highest score in the last decade in the first quarter of this year, which helped it remain the fourth most optimistic country in the world, according to the latest issue of The Conference Board® Global Consumer Confidence™ Survey, released in collaboration with market researchers Nielsen.
Southeast Asia and North America had the highest level of consumer confidence during the quarter. Consumers in Southeast Asia remained relatively optimistic, with confidence increasing 2 points from 119 in the fourth quarter of 2017 to 121. Three out of six countries reaching the highest confidence score were Vietnam, the Philippines and Indonesia, with Vietnam and Malaysia posting the Top 5 increases in the world.
“In general, countries in Southeast Asia normally have higher confidence levels than those in more mature regions,” said Ms. Nguyen Huong Quynh, Managing Director of Nielsen Vietnam. “The high confidence in these economies is in keeping with their fast growth and higher potential for further growth. Emerging countries like Vietnam, the Philippines and Malaysia had annual average GDP growth of 5 to 7 per cent in the last quarter of 2017. Thus, the momentum of economic growth across industries combined with the positive signs from foreign investment flows, increasing household incomes, and growth-oriented government policies could translate into optimism among consumers.”
“However, in Vietnam, positive sentiment did not lead to strong FMCG [fast-moving consumer goods] sales, with the market up just 1.8 per cent in the first quarter. This growth was slower than expected and reflected the volatility of the FMCG industry, possibly due to changing consumer behavior.”
After covering essential living costs, Vietnamese consumers were eager to spend on big ticket items to enhance their quality of life. This desire has slowly grown in the last four quarters. Vietnamese consumers still, however, had a strong affinity for saving.
Ms. Quynh explained that while health insurance was once thought of years ago as a luxury, Vietnamese consumers are now starting to get financial assistance to pay for health insurance programs. And this trend reflects one of the changes in consumers’ mindsets. When they cover themselves with insurance plans, they can have a much-needed sense of protection.
“In today’s world of information and technology, consumers are better informed as they can easily search for news and information,” she added. “They can foresee some short-term challenges such as the current condition of the economy, job security, health and work-life balance. These concerns may result in curbing their discretionary spending this year, and therefore consumer-facing businesses need to keep a close eye on changes in consumer sentiment.”
