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Vietnamese consumers’ optimism on economy on the rise: report

Monday, November 17, 2014, 21:30 GMT+7

Optimism on economic prospect among Vietnamese consumers continued to rise for the third quarter in a row, according to a recently released report of market research firm Nielsen.

According to the latest report on consumer confidence by the US-based market research firm,  the Consumer Confidence Index of Vietnamese people in Q3 2014 rose 4 points (to 102) compared to Q2 2014, and 3 points compared with the results by the end of last year.

According to Mr. Vaughan Ryan - CEO of Nielsen Vietnam, increasing 4 points to reach 102 is the largest growth in recent years, showing some positive signs of improving consumer confidence despite a difficult period of 18 months in the past.

Consumers are willing to spend on vacations, buying new clothes, new high-tech products, changing things in their houses, and spending more on outdoor entertainment, said the report.

This is a positive sign for the economy by the end of the year, said Nielsen.

But in general, consumers in Vietnam are still very cautious about the economy growth prospect and their employment remains the main concern, as the survey figured out that 7 out of 10 consumers in Vietnam saved their spare cash into savings after setting aside necessary living expenses.

Though many still prefer savings, this is the first time in many years that the number of respondents who said they prioritize savings over spending decreased, said the report.

Moreover, consumers are showing a willingness to spend on luxuries.

This is an extremely positive sign because it seems that consumers are willing to open their wallets again. The local market is difficult, but research on Consumer Confidence showed some really positive signals, and this is a great opportunity for the Lunar New Year 2015, said Vaughan.

The Nielsen Global Survey of consumer confidence and spending intentions, which has been conducted annually from 2005, measures the confidence index, their main concerns and spending intentions of more than 30,000 respondents using internet connections in 60 countries.

The level of consumer confidence is assessed on a scale of 100. If the index reaches over 100, it indicates optimism and confidence, and if the figure falls below 100, this means the opposite trend.

Main concerns

While the majority of consumers across Southeast Asia share a positive outlook for the future, the current state of the economy remains one of the highest concerns in the region.

Regarding economy growth, more than two out of five consumers in Thailand, or 44 percent, listed it as an important concern in the next six months, with 34 percent in the Philippines, 33 percent in Malaysia, and 24 percent in Singapore.  The rate in Vietnam is 27 percent.

A third of consumers in the Philippines (34 percent) feel uncertain about the safety of their jobs, 26 percent in Thailand, and 20 percent in Singapore, while  the rate of Vietnam is 22 percent.

Southeast Asian consumers are still focused on saving for the future with more than seven in 10 consumers in Vietnam (77 percent) and Indonesia (74 percent) said they will save the money remaining after deducting the necessary living expenses.

Consumers in the Southeast Asian markets are also keen on savings, including those in the Philippines (67 percent), Thailand (67 percent), Singapore (66 percent) and Malaysia (63 percent).

Along with the investment of idle funds in savings and stocks, consumers in the region are eager to spend on other large items. Singaporeans tend to spend their disposable income on vacation (51 percent), the highest rate globally, followed by Malaysia (47 percent) and Indonesia (41 percent).

Meanwhile, about a third of consumers in the Philippines (37 percent), Vietnam (35 percent) and Thailand (31 percent) choose to spend their spare cash on new clothes.

Faced with rising inflation in the region, a growing number of consumers are looking to reduce household bills, and countries in Southeast Asia, including Thailand, Vietnam, Philippines Malaysia and Indonesia, ranked in the top 10 worldwide when it comes to changing spending to saving household expenses.

Nearly 9 out of 10 Thais (88 percent) have changed their spending in the past year to save on household expenses, the highest globally, followed by 86 percent in Vietnam, 83 percent in the Philippines, 79 percent in Malaysia, 76 percent in Indonesia and 63 percent in Singapore.

Spending less on new clothes, cutting the spending on outside recreational activities and trying to save utility bills, like gas, electricity, are some of the most popular areas that consumers try to increase their savings.

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