Vietnamese consumers are less willing to buy valuable goods over the latest quarter, saying it is not the right time to do so, a market research report revealed Thursday.
While consumers are more optimistic about economic outlook as well as their financial situation, they “do not think it is the right time to make major purchase such as home appliances, furniture, etc,” Kantar Worldpanel said in its FMCG Monitor report.
FMCG, or fast-moving consumer goods, are products that are sold quickly and at relatively low cost.
While the Purchasing Confidence index reaches a high level of 19.3, Willingness to Buy continues to plunge down to 4.5 points over the last quarter, according to the report, which analyzes overall consumer’s sentiment for the 12 weeks ending June 15.
“Meanwhile, they are also less willing to spend more on everyday grocery shopping,” it adds.
Such an attitudinal pattern is also well-reflected in consumer’s real behavior, with the Real Purchase index witnessing “very slight improvement.”
Real Purchase index “remains low at 4.3 points as the majority of urban households keep tight control on their FMCG budget,” the report says.
Kantar Worldpanel said there is a continued slow-down pattern in FMCG consumption among urban families with a modest growth of 5 percent in value and 2 percent in volume.
In the meantime, FMCG in rural is losing its momentum as the market is experiencing a soft drop in both value growth-11.5 percent compared to 12.5 percent in previous quarter-and volume growth-7.8 percent compared to. 10.1 percent in previous quarter.
As for the distributing channels, the market researching firm said all key channels remain stagnant while wet market is shrinking over the past quarter in urban area.
“In rural, traditional street shops continue to hold on to their leading role among retail channels, capturing 74 percent of all FMCG expenditure.
“Contrary to the share decline trend of wet markets (from 23 percent in 2012 down to 20 percent in 2014), street shops are expanding its reach among rural families, especially in northern areas,” it said.
In summarizing its findings, Kantar Worldpanel said Purchasing Konfidence is stabilizing at 8.1 points, despite some improvement compared with the end of 2013.
“On a positive note, households are less stressed about the economy and their finances as last year,” Kantar Worldpanel Vietnam General Manager David Anjoubault commented.
Anjoubault added, however, that it “takes time before their willingness can bounce back accordingly.
“Thus, taking advantages of warming-up signals from the economic outlook, manufacturers and retailers need to spend more efforts to trigger demands and accelerate growth in the coming months.”
Kantar Worldpanel is an international company dealing in consumer knowledge and insights based on continuous consumer panels.
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