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Crisis is the right time to spend money
While the majority of people are trying to tighten their purse strings in the economic crisis, some people think that smart consumers should spend money at this moment, as sellers have slashed their sale prices to stimulate the demand
Having terminated a contract worth $300,000, Nguyen, director of a communication company in Hanoi, has decided to award herself with a free morning to shop at Sofitel Metropole. Nguyen left the hotel after one hour with two Louis Vuitton handbags worth over VND80 million.
After that, Nguyen dropped into several other fashion and shoe shops in Hanoi to continue her ‘shopping day.’ Nguyen purchased one more pair of shoes, two dresses and a pair of Roberto Cavalli brand name jeans.
Nguyen spent VND100 million during her day shopping, while the monthly income of a medium income earner in Vietnam is VND10 million.
When asked why Nguyen purchased so many things in just one day, she said that the prices of fashion and other commodities have dropped by 20% over the last year. Luxury products like Louis Vuitton handbags do not offer discounts, but they do offer vouchers and gifts.
“As such, with the same sum of money, I can purchase many more things than previously,” Nguyen said, adding that it is now the right time to make purchases.
Hanh, Marketing Director of a big telecom company in Hanoi, said that the global economic crisis has not hurt her family. Therefore, she still keeps the same spending levels.
Hanh thinks that now is the right time to make more purchases as the prices have been decreasing. Hanh said she has purchased some more consumer products, like TV sets, refrigerator and karaoke players. “The prices of the products have dropped by 50% over the last year, while there are a lot of choices for consumers,” Hanh said.
However, there are not many consumers like Hanh and Nguyen. Most people are now tightening their belts.
Though the income remains unchanged, Mai in Tay Ho district in Hanoi, has been trying to plan her purchases. She always estimate the sum of money she will have to pay when going to supermart.
Nga, a worker of a construction company in Hanoi, said that she earns VND1.6 million a month, while her husband gets VND1 million as motorbike taxi driver. She said that she only pays a minimum sum of money for meals and basic needs, while she needs to save money to pay for her son’s learning.
In order to cut down expenses, she has bought a sewing machine, which allows her to tailor clothes for herself and her family.
Nga has heard that her company will cut down their workforce and she fears that she will be dismissed. The only thing she can do is to cut down expenses.
Big C Thang Long supermart has reported that sales have dropped by a half over the previous year. Nguyen Thai Dung, Deputy General Director of Big C, said that the number of clients has increased by 30%, but the sales have decreased despite the policies on trade promotion.
Dung said that economic difficulties have a big impact on consumption habits. The purchasing power increased by 50% in 2007 thanks to the good performance of the national economy and stock market. A person who has VND1 million in their pocket can spend VND700-800,000, while he only pays VND400-500,000.
A recent survey conducted by local newspaper VNExpress said that 63.3% of readers said they are trying to cut down expenses. More than 28% said the crisis has not affected them, while 6% said they are trying to make more purchases at this moment.
Dr. Nguyen Minh Phong from the Hanoi Socio-Economic Institute said that a figure of 6% proves to be normal. The crisis could be a challenge for some people, but an opportunity for others.
There are three groups of consumers nowadays
The first group, high-income earners, who are not influenced by crisis, can buy the things they want.
The second, medium-income earners do not bear big impacts.
The third, low-income earners prove to be the biggest victims.
VietNamNet, VNE
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