Vietnamese consumers more cautious in Q3 2012

Vietnam’s consumer confidence index dipped 8 points to 87 in this year’s third quarter with nine out of ten (91%) Vietnamese changing their spending habits to save more, shows a survey from Nielsen.

Consumers’ cautious sentiment increases as 73% of Vietnamese stated this is not a good time to buy things they want and need, according to the survey conducted between August 10 and September 7, 2012. This is the lowest confidence since the first quarter of 2009.

The global survey points out that Vietnam, Hong Kong, Taiwan, Korea and Japan are the bottom five economies where consumers were the least optimistic about local job prospects in quarter 3. Meanwhile, the global consumer confidence index still increased one point to 92 in the quarter, and is up four index points from the same period of the previous year.

The cautious sentiment among Vietnamese consumers was also manifested with 91% of respondents reporting change in their spending to save on household expenses, increasing from 86% in Q2 and 84% in Q1 2012. Gas and electricity remain the most ‘cutback-expenses’ among 68% of respondents, followed by new clothes (67%), out of home entertainment (66%) and telephone expenses (55%).

Only 40% of Vietnamese online respondents believe their local job prospect will be good to excellent over the next 12 months, decreasing 6 percentage points from the previous quarter and 18 points since beginning of the year. Similarly, 42% of Vietnamese respondents believe their personal finance in the coming year will be good to excellent, down from 51% in Quarter 2.

“The subdued third quarter results reflect an overall trend that is neither positive nor negative as consumers are treading water very carefully,” said Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen.

With fuel prices rising five times within the third quarter; 24% of Vietnamese respondents raised utility bills (electricity, gas, heating, etc.) as their biggest concern. This was followed by the economy and job security at 20% and 16% respectively.

The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns and spending intentions among some 29,000 Internet consumers in 58 countries and territories. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

Nielsen’s survey shows that North America and Europe reported the only quarterly consumer confidence increases, rising three index points to 91 and one point to 74, respectively. Asia-Pacific (100) and Middle East/Africa (98) regions remained flat in Q3 and Latin America decreased two index points to 94.

India (119) and Indonesia (119) reported the highest index scores in Q3 while China’s index score increased 0.6 to 106 and the U.S. increased three points to 90.

The biggest quarterly consumer confidence gains in Q3 were reported in Switzerland (+10), Belgium (+9), Australia (+8), Thailand (+8), Hungary (+7), Norway (+7), United Arab Emirates (+6), Italy (+5) and Canada (+5).

The biggest quarterly consumer confidence declines in Q3 were reported in Hong Kong (-15), Argentina (-11), South Korea (-10), Vietnam (-8), Colombia (-8), Israel (-7), Venezuela, (-7), Malaysia (-6) and Finland (-5).

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