Vietnamese consumers have drastically adjusted their spending behaviors, with 62% in a new PwC survey “holding back” on non-essential spending amid the globally rising cost of living.
Notably, 54% of consumers Vietnamese expect to spend less on luxury products, according to the 2023 PwC Consumer Insights Survey in Vietnam.
The survey also found consumers expect to reduce their expenditure across multiple categories over the next six months. Industries including luxury and premium products, travel, and consumer electronics expect to see the greatest portion of consumer spending reductions over the next six months, whereas groceries are expected to decline the least.
“As the global economy faces challenges and societies adapt to the new normal, consumer spending habits are shifting. Consumers are reducing their spending, shifting between digital and physical spaces, and prioritizing trustworthy products and companies,” said Jonathan Ooi, partner, deals leader, PwC Vietnam.
“Business leaders must closely monitor these trends and adapt accordingly to remain competitive in the constantly evolving market," he said.
In the current economic climate, Vietnamese consumers are more cautious in their spending habits.
According to the PwC survey, 42% of Vietnamese consumers expect to spend less on travel and 38% on electronics. The least reported planned spending reduction is on groceries – only 18% of domestic consumers plan to cut their spending on groceries, compared to 24% of global consumers.
In another finding, “phygital” – the concept of using technology to bridge the digital world with the physical world – is now a thing.
Online shopping is increasingly the go-to for Vietnamese consumers, with 64% of consumers anticipating an increase in their frequency of online purchases, and the majority of consumers expect an increase in omnichannel experience (delivery, collection and click-and-collect). However, physical shopping remains key to product quality assurance and in-store experience.
Furthermore, in-office work is the norm again, and this is particularly so in Vietnam.
Sustainable products are in-demand from consumers, the report says. Despite a planned spending reduction and a challenging economic environment, consumers say they are still willing to pay more for sustainable product types. Overwhelmingly, 96% of Vietnamese respondents will pay more for products by companies with a reputation for ethical practices, bespoke or custom-made products (95%), or those with traceable supply chains (95%).