Vietnam Consumer Behavior

and the Impact of COVID-19

As of December, 1, 2020,
there were 1,343 COVID Cases and 35 deaths in
Vietnam, and only 164 active cases

Prepared by: Eurocham: Wednesday December 2, 2020 – Sofitel HCMC 1

Infocus Mekong Research
 EMPLOYMENT STATUS

Prior to COVID -19, 82% of respondents were employed full-time, while in May only 63% were employed full-time,
Increasing to 70% full-time employment by July, is still substantially below pre-COVID levels, Indicating at least 12% of
the population with less income than before.

Younger consumers (18-

24) saw limited change in
terms of job loss (full-time
EMPLOYMENT STATUS employment only
dropping 2pts), however
underemployment spiked
Before COVID 82% 13% 5% to 13pts from Jan.

45+ year old consumers

After COVID – May 63% 14% 9% 14% were the hardest hit with
unemployment spiking
7pts from 8% to 15% (Jan
- July )
After COVID - July 70% 12% 6% 12%

Which of the following best describes your present employment status? Base: n=1,019
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Consumer Confidence

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 2020 CONSUMER CONFIDENCE
Consumer Confidence has dropped to its lowest levels in over 20 years, from January 2020 pre-COVID, 84 Index to only 22 Index in May
of 2020, and only risen by a mere 5% in two months, indicating a slow recovery, as Consumers spend cautiously.

Index: The index is based on 11 spend categories

in terms of spending more – same – less than
IFM CONSUMER CONFIDENCE INDEX
previous year .
(More + Same) Minus (less of 11 Categories
average) = Index

Before
Post COVID-19 Outbreak
COVID-19
Outbreak

92 92 91 84
68
51
22 27

2012 2014 2016 2018 2019 2020 Jan 2020 May 2020 July

Base: All
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 VIETNAM ECONOMIC OUTLOOK FOR 2020 – POST CORONA OUTBREAK

As expected COVID-19 has had a hugely negative impact on consumers economic outlook for 2020, falling
from 70% positive in January 2020 to only 6% in May of 2020. Confidence has slightly improved in July but
not significantly.
VIETNAM CONSUMERS
Better Same Worse Sample size

Before 2019 85% 11% 4% 3,567

COVID-19
Outbreak
2020 Jan 70% 22% 8% 2,964

2020 March 16% 22% 62% 502

During /
After
COVID-19 2020 May 6% 12% 82% 1,023
Outbreak
2020 July 5% 19% 76% 1,019
8,056

What is your view of the overall economy in 2020 as compared to 2019? – (Better – Same – Worse) 5
TOP THREE FEARS - July 2020 25% 21% 17%

Negative impact of COVID Being infected by Unemployment

Consumer concerns have on my business Corona Infection
moved from the societal to
personal

Jan 2020 March 2020 July 2020

Negative impact of COVID Negative impact of COVID
Environmental pollution on my Business on my Business
26% 25% 25%
Increased inflation Infection of COVID-19 Infection of COVID-19
16% 22% 21%
Unemployment Slow down of Vietnam economy Unemployment
11% 12% 17%
Increased Interest rates Global economic slowdown Slow down of Vietnam economy
9% 10% 9%
Q.4 what is your single largest fear/ reservation for 2020? (select the top 1 only) Base: n=3,987
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 CONSUMER SENTIMENT URBAN VS RURAL Date July 2020

Both Urban and Rural consumers largely have the same concerns for 2020 – the impact of Corona virus.
Urbanites are more concerns about Inflation, while Rurals are more concerned about the environment

▪ BIGGESST FEARS FOR 2020

Urban Rural

63% 64% 63% 61% 61%

58% 57%
53%
50%
47%
41% 39% 37%
31% 31%
25% 23% 25%

Negative
Reduction in
impact of Vietnam Global Lose by
Being infected Unemploymen Environmental Increased health /
Corona Virus economic slow economic business /
by Corona t pollution Inflation education
on my down down turn Bankruptcy
services
business

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Purchase behavior

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 2020 CONSUMER SPEND IN TERMS OF GROWTH

Outside of Bank Loans and Utility spend, all other sectors are down substantially from pre-COVID spend. Food&
beverage has stayed buoyant over the past few months, while some sectors show mild signs of recovery. The
purchase of all electric devices continues to fall, as consumer only worry about essential spend.

Base: n=3,987
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 COVID -19 IMPACT ON BIG (over 50 mil VND) TICKET PURCHASE ITEMS
Every big ticket purchase item has seen a decline in purchase intent since January 2020. Purchase intent has further
eroded in July save for Domestic Holidays which held constant, indicating and overall trend of reduction on most
expensive purchases

BIG TICKET ITEMS

CONSUMERS
ORIGINALLY
PLANNED TO
PURCHASE IN 2020
46% 37% 32% 27% 23% 18% 16% 14% 13% 10% 6%
% Domestic New Overseas
Invest in
Overseas
Motorbike Insurance House New Car Apartment Stock Used Car
Holiday Business Holiday Education
Market

63% 60%
54% 57%
LIKELIHOOD TO 48% 48% 48%
42% 45% 42%
PURCHASE POST- 40% 40% 37% 38%
33%
COVID 26% 27% 24%
23% 23%
(AMONG THOSE 17%
13%
WHO ORIGINALLY
PLANNED TO BUY)
(T2B%)

Now, considering the impact COVID-19 has had on your business / personal financing, how likely are you going to Purchase the same item in 2020 (MA -
10
1 = Definitely would NOT purchase, 3 = May purchase, may not purchase, 5 = Definitely would purchase) W2: Base: n=1,019; W1: Base: n=1,023
SHOPPING
ShoppingBEHAVIOR
behavior WAVE 1 VS. WAVE 2

During COVId-19’s Social Distancing campaign, On-line usage Peaked at 33% growth in 6 weeks. However, July findings
show more and more consumers less likely to use each shopping channel, indicating more bulk shopping and less
frequency and less window shopping.

Shopping frequency May -July

Will shop more
May July 52%

41%

28% 29%
22% 22% 22% 23%
21%
16% 16%
13%

Traditional street Specialized stores Wet market Convenience stores Hyper / Supermarket On-line
store Base: n=1,019

Once COVID-19 is finished with no more ill effects, which of the following channels will you use more - less or the same for FMCG products compared to
before the Covid -19 outbreak (SA by attribute) 11
KEY BEHAVIORAL CHANGES
New Post COVID behaviors are driven by Eating at Home and Working remotely. Behaviors which are in decline include;
Dining and entertaining out, Physical shopping, all forms of travel. Until consumer confidence returns, only mild changes
are expected in the new behavioral patterns
Activities done before & after COVID %
62%
58%

42%
Increased / 27% 30% 30%
34% 31% 29% 26%
24% 21%
New 16% 13%
21%

behaviors
Eat at home/ Home cooked meal Order Food Delivery Taking vitamins/ nutritional Working remotely/ from home Stocking up OTC medicines/
supplements medical devices

63%
56%
51%
47%
40% 37%
Declining 31% 32% 30% 30%
22%
Behaviors 20% 20%

5% 4%

Eating / Dining outside Shopping at physical stores Out-of-home Entertainment Travelling – Domestic Travelling – International

Which of the following activities did you do before COVID-19?

Which of the following activities did you do during COVID-19? (N= 2042)
Which of the following activities have you done after COVID-19?
 ENCOURAGEMENT REQUIRED TO INCREASE BIG TICKET ITEM PURCHASES
Job security, salary increase and more assurance from the Government are key Triggers required to give consumers
confidence to spend on big ticket items.

VEHICLE HOUSING DOMESTIC HOLIDAY INVESTMENT

Car / motorbike More Government

I am confident Salary is increased
manufactures lower 45% 39% reassurance COVID is 46% 34%
my job is secure to its pre-COVID level
prices over

Confidence house / More Government

I am confident Salary is increased
44% apartment value has 34% 40% reassurance COVID is 40%
my job is secure to its pre-COVID level
increased over

D7C What could help you change your mind and decide to purchase DOMESTIC HOLIDAY / VEHICLE / HOUSING / INVESTMENT this year?
(VEHICLE N=432; HOUSING N= 231; DOMESTIC HOLIDAY N=239; INVESTMENT N291) 13
COVID-19
Financial Impact

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COVID-19 IMPACT ON LOANS
If Interest rates stay low, Loans from all sources should see an
increase in the coming months, to deal with the ravages of COVID-19.

Intention to take out loan in next 6 months %

63%
59%
52% 54%

41%

29%

2015 2017 2018 Jan-20 May-20 Jul-20

In the next 1- 6 Months will you take out a loan of any kind from a bank, lending institution or Base: All
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borrows from Friends / family? [SA]
CORONA VIRUS REVENUE IMPACT FOR 2020 GROWTH
Three quarters of all surveyed see a negative to very negative impact from COVID-19 on the growth of 2020 business,
matching with present low consumer confidence levels .
Rural dwellers showed more positive sentiment during the same period ( 5% Plus vs Urban)
MAY 2020 JULY 2020

18% 9% 73% 16% 11% 73%

Extreme POSITIVE Mild NEUTRAL Mild NEGATIVE Extreme
4% 2% 4% 3% 2% 8% 20% 25% 12% 21%
8% 4% 3% 3% 5% 11% 12% 12% 6% 35%

Urban: 10% Urban: 58%

Rural: 15% Rural: 53%
How much do you think the Corona Virus outbreak, is going to impact your Job - business in 2020?
(SA with 1=Very Positive Impact / 5=Neutral /10= Major negative impact) 16
Base: w2 n=1,019; w1: 1,023
MEDIA BEHAVIOR
POST COVID
VIETNAM

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MEDIA PERCEPTIONS AND USAGE URBAM VS RURAL

Facebook and TV most widely used, particularly in Rural Areas. In terms of trust, 1 in 2 rural consumers trust TV
the most, followed by VN online news.

Most used Most trusted

5% 9%
12% 2%
2% Others 13%
2% 2%
2% Others
4% 3% 4%
5% 14% 3% 4%
5% Outdoor 8% 7% Radio
9%
17% PRINT Newspapers
30% International Online News 8%
19%

Company websites
20% VN Online social media 22%
International Online News

VN Online News Facebook

53%
45%
37% 34% VN Online News
TV
TV
Facebook
Urban Rural Urban Rural

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SOCIAL MEDIA FOCUS – ‘MOST’ LIKELY TO
Facebook the ‘go to’ page across key social media activities. However, Zalo and Youtube are becoming increasingly
popular.

MOST LIKELY TO PAY

MOST USED MOST TRUSTED MOST ENTERTAINING
ATTENTION TO ADS

56% 31% 45% 34%

27% 26% 30% 29%

9% 10% 12% 13%

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What to do?

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YEAR END PREDICTION ▪ Based on 6 months of tracking consumer Behavior

Present levels of reduced consumerism too continue until at least the end of the year
Marginal improvements in some sectors, while others continue to decline.

Confidence & economic outlook

▪ Continued slight increase in confidence to end of Year
▪ 75% see economy as being worse than in January 2020, Consumer Confidence Index
▪ Due to unemployment being 12% lower 6 months after COVID’s arrival. 91
84

Risk perceptions
▪ Still very high
▪ But- shifting from infection to negative impact on business and 27
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unemployment as economic woes continue

2019 Jan-20 May-20 Jul-20

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Five P’s Recommendations
▪ Consumers require reassurances in terms of alleviating fears, unemployment, financial stability to
People increase confidence

▪ Increase on-line entertainment value as consumers go out less and spend more time at hone and one
line

▪ Require more guarantees, free sampling, preventative efficacy , smaller SKU’s pack types, value
savings on large pack types
Product
▪ New alternatives – delivery service / on-line exercise / etc

▪ Products that can save now and secure future – different payment plans with low interest rates

▪ Focus is on security, convenience and less entertainment value and more savings value

Place ▪ Hence Modern trade such as Supermarkets, convenience, specialty stores are key

▪ On-line is a given for most categories – but require guarantees and more product information

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Five P’s Recommendations
Price ▪ Discounts / value to volume savings

▪ Reduced payment terms / reduced credit rates

Promotion ▪ Promotions less effective unless they provide savings or volume increases

▪ Facebook beginning to loss trust from consumers

▪ Need to….
▪ become much more target specific on-line as the medium is very cluttered

▪ maximize internet optimization to stand out

▪ have relevant messaging, with good dose of entertainment to stand out

▪ focus on product functionality and guarantees

▪ fish where the fish are – On-line – On Mobile

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2021 PREDICTIONS

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2021 PREDICTIONS Join the Bus and stay ahead of 2021
Launch Dec. 12, 2020
ASK US ABOUT MULTI-QUESTION
DISCOUNTS
RATE CARD
# Module Options Fare USD
1 Consumer Confidence IDX 345
2 Covid-19 Behavior Tracker 345
3 Pre -Tet purchase behavior 345

Proprietary Questions Fare USD

Single answer 258
5-point scales 345
Multiple answer 345
Ranking 386
Max Diff 386
Multivariate 515
Open ended 645

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Ralf Matthaes | Managing Director
Tel: +84-8 2262-7627
Mobile: +84-903-949-531
Website: www.ifmresearch.com
ifmpanel website: www.ifmpanel.com

Email: Ralf.matthaes@infocusmekong.com
4th Floor, 21 Phung Khac Khoan Street, D.1
HCMC, Vietnam

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