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Retail industry remains promising in crisis
Some experts have predicted that the economic crisis will impoverish millions of Vietnamese people, who have just escaped from poverty thanks to strong development and urbanization.
Changed spending habits
The reports released recently at conferences show that Vietnam is in a good position to escape the crisis, though a lot of difficulties still need to be overcome. There will be 12 million Vietnamese people who still have to live on less than VND40,000 a day.
According to Nielsen Vietnam Omnibus 2002-2009 reports, the average income of Vietnamese households has increased significantly between 2002 and 2009.
74% of Vietnamese people have mobile phones
The Internet popularity in Vietnam is higher than in regional countries. 23% of Vietnamese people access the Internet, while the figure is 22% in China and 7% in India.
Despite big challenges in 2008, high inflation caused by foodstuff price increases and stock market falls, Vietnamese consumers are still optimistic.
Though high inflation is making the pockets of consumers all over the world thinner, and is affecting consumers’ confidence, Vietnamese consumers are still more optimistic than others in the world.
According to AC Nielsen, fast moving consumer goods (FMCG) grew by 20% in December 2008 in comparison to one year ago, and the growth rate was 4% more than one year ago.
According to Nielsen Vietnam Omnibus Jan-Feb 2009, the spending for 2009 Tet was lower than the same period of the previous year, as 50% of polled consumers said they spent less on 2009 Tet than 2008 Tet.
40% of polled Vietnamese consumers said that they now care more about commodity prices. They said that everything is getting more expensive and they had less cash to spend for Tet. 1/3 of polled consumers said their spending on FMCG (not including foodstuffs) has decreased, and they have reduced spending in all shopping channels, supermarts, traditional markets and groceries.
Vietnamese consumers said that in the next six months, they will further cut spending on non-food products, like household products, electronics, clothes and entertainment services.
More than half of polled consumers said that they will cut spending on phone, electricity, petrol and subsistence expenses. More than half plan to cut down spending on FCMG in the next six months, as well as on soft drinks.
The prospects of the retail industry
Big opportunities are still available. Retailers have all expanded their network with 394 supermarts now operational, an increase of 22% over 2007. The number of consumers who go shopping at supermarts has increased by 43%, and they go to supermarts weekly.
However, traditional markets still play an important role in the daily life of Vietnamese consumers.
Several retailers started their business in Vietnam over the last several months, including Lotte Mart and Circle K, and Vietnam is continuing to open the market to foreign retailers.
Now is the right time for companies to build up their brand names and attract consumers.
In general, Vietnamese consumers have bigger self-confidence than people in other countries, and 1/3 of consumers said that concern about the foodstuff prices will not reduce their spending.
VietNamNet, VnMedia
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