Vietnam consumers more picky as incomes rise: official

Vietnamese consumers are becoming more fastidious as their incomes rise, according to Le Viet Nga, deputy director of the domestic markets department under the Ministry of Industry and Trade.

She made the remark while addressing a Wednesday forum on the consumption trends in Vietnam hosted by the Institute for Brand and Competitiveness Strategy. The forum was a continuation of its 2020 edition, which focused on consumption during the Covid-19 pandemic.

Nga cited the example of WinMart Thang Long, a recently-opened store in Hanoi that offers a variety of products catering to more demanding customers. The store, which is also the first “experience store” in the capital city, emphasizes customer satisfaction during shopping, similar to services in foreign countries.

Businesses shifting from exporting high-quality products to selling them in the domestic market was more evidence of meeting the demands of more fastidious customers in the country, she said.

As a result, while the country's export revenues have declined this year, retail revenues have continued to grow.

Nga said that the government regarded boosting consumption as key to economic recovery and growth, and has been implementing several programs to stimulate demand, including promoting Vietnamese products among domestic consumers and linking tourism and consumption.

Besides, the government is also ensuring social welfare by developing the domestic market with measures like selling specialty products from remote areas and implementing price stabilization programs with the participation of retailers.

Nga added she expected the retail sector to thrive in the remaining months of this year, thanks to wage increases for state employees, the National Assembly's extension of VAT reduction by two percentage points until the end of 2023, and a possibility that the State Bank of Vietnam will introduce policies to encourage consumption loans and to further lower interest rates.

Forum participants highlighted other consumption trends in Vietnam's retail market including the preference for products that support sustainable development and the rise of e-commerce.

Vietnam’s import-export dropped 14.7% year-on-year to $262.54 billion in the first five months of this year, according to the General Statistics Office. The country earned export revenues of $136.17 billion during the period, down 11.6% year-on-year, while import expenditure fell 17.9% to $126.37 billion.

While the foreign market slumped, the domestic market continued growing with retail sales and service revenues going up 12.5% year-on-year to VND2,52 trillion ($107.33 billion).