Vietnamese consumer behavior is exhibiting less price sensitivity and more confidence
With a GDP growth of 6.68% in 2015, exceeding world’s average, Vietnam is an emerging market and its people are enjoying increasing prosperity.
This fast economic growht allows financially well-off consumers to trade up for higher quality, luxury and brand products. Moreover, changes in lifestyles have triggered the need for convenient and complementary products or services. Such lowering price sensitivity and increasing consumption demonstrate the potential and feasibility of Vietnamese consumer market.
According to Nielsen Global Retail-Growth Strategies Survey, price is no longer the main influencer on Vietnamese consumers’ purchase decisions. Regarding product selection, the two main influencers are taste for edibles and brand name for non-edibles. Regarding store selection, various factors including product availability, high quality product, convenient location, store personal and product assortment play equally important influential roles.
Especially, health and wellness have emerged to be among top priorities for Vietnamese consumers. They are now more cautious when selecting products in search of good quality and healthy ingredients. Hence, retailers who can provide a guarantee of quality and safety will enjoy competitive advantage in Vietnamese market.
Additionally, due to the increasingly fast pace of life and shrinking family size, Vietnamese consumers are craving for convenience in shopping. They prefer stores in accessible locations, with organized layout and even start to adopt online shopping. This demand for convenience challenges retailers to re-evaluate the role of physical stores in delivering value to consumers.
Another survey by TNS reveals that in the second quarter of 2016, Vietnam’s Consumer Confidence Index hits the highest level ever recorded. The Index reflects Vietnamese expectations for the value of Vietnam dong, Vietnam’s economy and standard of living. In fact, 96% of Vietnamese expect improvement in standards of living; and the expected spending has risen 4% higher than 2015. The main aspects of planned spending are children education, investment, food and beverage and healthcare.
Sources: 1, 2