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IFM 2024 Consumer Confidence INDEX Report (Jan 15,24).pdf

This document contains a summary of a consumer confidence index report for Vietnam in 2024. It includes the following key points: 1. The consumer confidence index dropped slightly from January 2023, driven by factors like the real estate market decline, reduced exports, inflation, and unemployment. 2. Top consumer fears for 2024 include inflation, unemployment, economic slowdown in Vietnam and globally, and pollution. 3. Spending intentions vary by category in 2024, with expected growth in education and food/beverages, but declines in entertainment, appliances, and electronics. 4. Many consumers report decreased savings in 2023 and expect the economic recovery to extend into 2025 or beyond.

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1 Prepared by: Infocus Mekong Research January 15, 2024 IFM 2024 CONSUMER CONFIDENCE INDEX REPORT Ralf Matthaes | Managing Director Email: Ralf.matthaes@infocusmekong.com Website: www.ifmresearch.com
SAMPLE PLAN Jan 2024 SEC Household Income bands Total A 30,000,000 VND and more 18% B 20,000,001 - 30,000,000 VND 33% C 15,000,001 - 20,000,000 VND 20% D 10,000,001 - 15,000,000 VND 16% E Below 10,000,000 VND 13% METHODOLOGY • IFM consumer confidence Index, has been ongoing since 2012. For this report, the sample utilized ranges between 17,000 total and 1,000 Plus respondents nation-wide and was conducted 4 times in 2020 and 3 times in 2021 and twice in 2022 and 2023 and now for 2024. • Quantitative – Self-completion by end consumers. • Using IFM Mobile Panel via smartphones data collection. Sample error is 3-4% based on sample size per wave at 95% confidence level Age % 18-24 16% 25-34 39% 35-44 34% 45 Plus 10% Location % HCMC / Hanoi 40% 2nd tier - cities 22% Rural / sub-Urban South 14% Rural / Sub-Urban Central 10% Rural / Sub-urban North 14% Total 100% N = 1,022 Gender % Male 49% Female 51% 2 Date Sample 18-Dec 3,567 19-Dec 2,964 20-Mar 502 20-May 1,023 20-Jul 1,019 20-Dec 1,026 21-Jun 1,010 21-Oct 1,009 22-Feb 1,026 22-Jul 1,022 23-Jan 1,017 23-Jun 1,026 24-Jan 1,022 Total 17,233
3 ECONOMIC SNAPSHOT Indices 2023 GDP US $430 Billion GDP Growth 5.05% Inflation 3.25% Exports US $355 Billion Imports US $328 Billion FDI (32% growth, but mass reduction previous capital = much lower than stated) US $37 Billion Tourism (12.5 Million) US $28 Billion Total retails sales 2023 US $142 Billion Overseas Money Remittances US $14 Billion New Business Openings / Closures 160,000 New Businesses 200,000 Business Closures 65% (US $280 Billion) of GDP is driven by Domestic (Consumer) spend in Vietnam
Consumer Confidence 2024 4
COVID EMPLOYMENT IMPACT Base: 11,158 Jan. 2024 84% 14% 2% Jun. 2023 71% 27% 2% Jan. 2023 86% 12% 2% Jan. 2022 77% 19% 4% Jan. 2021 73% 20% 7% FULL TIME JOB WANTED EMPLOYMENT IMPACT • Full-time employment has increased since June 2023, but is still below pre-Covid 2019 levels. • Unemployment is stable at 2%. • The vast majority make ends meat via their main job. • However almost 40% add to their income via online sales and 1 in 3 are now playing the stock market. 5 81% 39% 30% 25% 24% Salary / Business earnings Sell products / services online Trade in stocks, funds, currency Trade, sell products / services offline Real estate rent/ sales SOURCES OF INCOME
VIEW OF VIETNAM’S ECONOMY – JAN 2020 – JAN 2024 • Optimism in the economy for 2024 has risen sharply, 56% and increase of 16% since Jan 2023. • However, a third still see the economy as being worse in 2024 than in 2023. • Note: view of the economy is not part of the consumer confidence index but rather a psychological emotive measure. 58% 12% 27% 40% 56% 27% 24% 42% 33% 15% 15% 64% 31% 27% 29% 2021 Jan 2021 Jul 2022 Jan 2023 Jan 2024 January Better Same Worse 2021 vs JANUARY 2024 VIEW OF THE ECONOMY Base: 11,158 6 What is your view of the overall view of the economy for 2024 compared to 2023?
IFM CONSUMER CONFIDENCE INDEX JANUARY 2024 Base:17,216 2020 - 2024 CONSUMER CONFIDENCE Pre-COVID-19 COVID Wave 1 • Consumer confidence has dropped somewhat since Jan 2023, fueled by the Real Estate bubble burst, reduced exports, increased unemployment / reduced wages, and inflation. This does not bode well for 2024 consumerism. Index out of 110 Jan 2020 July 2020 Jan 2021 July 2021 Jan 2022 July 2022 Jan 2023 Jun 2023 Jan 2024 84 27 60 12 51 63 57 54 51 COVID Wave 2 Post COVID-19 7 Index: The index is based on 11 spend categories in terms of consumer spending “more – same – less” than previous Period. (More + Same Minus Less) of 11 Categories average) Divide by 11 sectors = Consumer Confidence Index score For the 11 sectors, will you spend More, Same, Less in 2024 than 2023?
Base: 11,158 TOP FEARS 2021 – 2024 • Inflation and Unemployment and VN Economic slow down, top all concerns followed by Pollution. • New fears include Global Economic slow down and Bankruptcy. • Key issue: all concerns seem to be increasing. 45% 39% 46% 51% 44% 36% 42% 50% 39% 34% 42% 50% 16% 36% 60% 56% Jan. 21 Jan. 22 Jan. 23 Jan. 24 Environmental pollution Vietnam economic slow down Unemployment Increased inflation Inflation Unemployment VN Eco. slow down Pollution Global Eco. downturn 44% 8 Bankruptcy 31% What are your biggest fears, reservation in 2024?
54% 41% 35% 41% 44% 2019 2021 2022 2023 24-Jan LOANS TAKEN OUT IN PAST 12 MONTHS Base: 11,158 LOANS / LENDING AND DEBT • 41% have taken out loan in 2023, mostly from VN Banks and Friends. • 44% intend to take out a loan in 2024. • 62% of all loans are for immediate survival and paying off debt, an increase of 12% since 2021. 47% 54% 31% 11% 47% 29% 17% 3% 62% 46% 29% 4% VN banks Friends/ Family Consumer Fin. Co Foreign banks SOURCES OF LOAN 2024 2022 2021 40% 35% 32% 13% 22% 12% 7% 34% 35% 36% 26% 22% 11% 10% 33% 37% 25% 24% 17% 9% 7% Immediate survival Personal Business Real Estate to pay back Loans / Debts Education Automobile PURPOSE OF LOANS 2024 2022 2021 9 Did you take out a loan in Year X, from where, what purpose ?
10 ABILITY TO SAVE 22% 20% 15% 19% 12% 9% 3% ABILITY TO SAVE MONEY IN 2023 declined 20% Plus declined 19-10% declined 9-1% Same 0% Increased 1-9% Increased 10-19% Increased 20% or more ▪ A key measure of consumer confidence is their ability to save money. ▪ 57% of consumers noted a decline in savings, 43% by at least minus 10% and higher reduced savings. ▪ Only 24% experienced an increase in savings in 2023. 9% 18% 19% 12% 31% 11% WHEN WILL ECONOMY RECOVER Q.1 2024 Q.2 2024 Q.3 2024 Q.4 2024 Not Till 2025 Not Till 2026 VIETNAM ECONOMIC RECOVERY Base: 1,022 ▪ In terms of Economic recovery, only 27% believe recovery will happen in 1st half of 2024, while 31% In 2nd half of year ▪ 31% not till 2025 AND 11 % believe recovery will take longer = meaning consumer spend will be very conservative for 2024 How much Money were you able to save in 2023? When do you think the VN economy will recover?
Purchase Behavior 11
10% 16% 14% 19% 15% 25% 27% 19% 32% 44% 35% 41% 41% 35% 34% 17% 27% 25% 17% 20% 25% 15% Education Food & beverages products Household utilities Health care products/services Communications Personal care products Transportation House hold care products Personal electronics Entertainment & dining out Home appliances Less Same More ESTIMATED CONSUMPTION GROWTH BY CATEGORY 2024 2024 Growth % Base: 1,022 • Education and F&B shall see the biggest growth in spend for 2024, followed by Household Utilities and Healthcare. • Entertainment & Dining Out, Home Appliances and Personal electronics will suffer. 12 31% 25% 19% 15% 2% -2% -2% -2% -12% -19% -20% For the 11 sectors, will you spend More, Same, Less in 2024 than 2023?
SPEND INCREASE BASED ON CONSUMPTION VS INFLATION • Once inflation is taken out of the equation, actual consumption growth ranges between 31% & -20% across sectors. • Consumption increase = 50% driven by Education, vs 50% increase due to inflation. ▪ Actual total growth minus inflation = 4.18% for 2024 Base: 1,022 13 Category Total Increase consumption Increase in cost / inflation Actual growth Education 31% 58 42 17.9% Food & beverages products 25% 36 64 9.0% Health care products/services 15% 57 43 8.5% Household utilities 19% 20 80 3.8% Communications 2% 53 47 1.0% Personal care products -2% 60 40 No Growth in Consumption Transportation -2% 45 55 Household care products -2% 47 53 Personal electronics -12% 62 38 Entertainment & dining out -19% 59 42 Home appliances -20% 53 46 For the sectors you spend more on, why, increased consumption or inflation ?
14 ECONOMIC IMPACT TRENDS 59% 59% 62% 63% 67% 16% 21% 15% 16% 11% I had to cutback on my overall spending versus 2022 I went shopping less often than in 2022 I held off buying big tickets iin 2023 My savings declined in 2023 I used cheaper retail outlets to save money 2023 CONSUMER BEHAVIOR TRENDS Agree Neutral Disagree Base: 1,022 2023 revealed a few concerning trends in the market 1. Down trading of both shopping venues and brands. 2. Reduction of shopping frequency. 3. Reduction in overall spending and savings. How much do you agree / disagree with the following statements?
5 EMERGING META TRENDS METATREND = a change that changes change 15
Base: 1,022 1. MAKING MORE MONEY 13% 19% 25% 39% 4% WILL YOU SPEND MORE ONLINE IN 2024 THAN IN 2023 Much less Less Same More Much More 37% 25% 38% I MADE MORE MONEY IN 2023 THAN IN 2022 Agree Same Disagree 2. ONLINE SPEND Vietnamese made the same and less money than in previous years (63%). Online spend should increase in 2024, though spend reduced in 2023, aligning with downtrading retail trends How much do you agree / disagree with the following statements? How much will you spend online in 2024 vs 2023?
17% 10% 7% 34% 8% 5% 18% 31% 7% 4% 12% 23% 8% 4% 13% 25% House Apartment Land Total LAND GRAB BUST 2020 2022 2023 2024 Intent • Even though the Real estate market is in the dumps, Consumers are still keen to buy. • But the impact in terms of overall sales will be minimal in 2024. 3. LAND GRAB PURCHASE INTENT Base: 4,081 Have / Intend to purchase 17 Which of the following items did you purchase in Year x? Which of the following items are you 90% sure going to purchase in 2024?
18 7% 16% 12% 2% 16% 5% 6% 14% 2% 13% 10% 10% 16% 3% 14% New car Overseas Holiday A new Business Overseas education Invest in Funds PURCHASE INCREASE GROWTH 2022 2023 2024 intent +5% +4% +2% +1% +1% 4. CONSUMPTION GROWTH - IMPACT ON BIG TICKET PURCHASE ITEMS Only 5 out of 13 big expense items will see any growth in 2024, with the automotive market potentially seeing a rebound from a feeble 2023. Base: 3,065 Which of the following items did you purchase in Year x? Which of the following items are you 90% sure going to purchase in 2024?
19 21% 23% 33% 10% 39% 27% 38% 17% 18% 33% 10% 36% 23% 38% 16% 15% 29% 4% 27% 14% 23% Stock market Expensive electronics Domestic Holiday Used car Insurance Motorcycle Home renovations PURCHASE DECLINE ITEMS 2022 2023 2024 intent -1% -3% - 4% -6% -9% - 9% -15% 4. CONSUMPTION DECLINE - IMPACT ON BIG TICKET PURCHASE ITEMS Home renovations, 2 wheelers and insurance should see the biggest drop in sales in 2024. Base: 3,065 Which of the following items did you purchase in Year x? Which of the following items are you 90% sure going to purchase in 2024?
Online platforms Wet markets Ma & Pa stores Super/Hyper markets Convenience stores Street Vendors Shopping Mall 5. RETAIL LANDSCAPE SHIFTS • Big Winners: Online shopping and Ma & Pa stores are the only retailers that should see any increase, but marginally. • Shopping malls are in big trouble. 32% 19% 21% 34% 21% -9% -28% 19% 6% 5% 13% 7% -35% -4% 22% -2% 3% -3% -7% -35% -36% 2022 2023 2024 Intent 20 Base: 3,065 RETAIL OUTLET USAGE How much are you going to use the following retail outlets in 2024 vs 2023?
VIETNAM BUSINESS EXECUTIVE’S CONFIDENCE INDEX
22 3.3% 4.7% 43.3% 30.7% 18.0% COMPANY SIZE Self employed 1 – 5 people 6 – 19 people 20 – 150 people More than 150 people 16.0% 13.3% 13.3% 9.3% 7.3% 6.7% 6.0% 5.3% 4.7% 4.0% 10% Manufacturing FMCG / Consumer goods Wholesale / Retail Communications (PR, Marketing) Hospitality Construction Professional services IT Pharma/ health services Financial, banking insurance Others INDUSTRY ▪ Half of all companies surveyed had under 20 staff and half had over 20 staff. ▪ 65% of executives surveyed revenue came from domestic business. ▪ All executive are either business owners, MD’s or senior level budget holders. ▪ 50% of businesses = Manufacturing, FMCG, Retail and Communications. RESPONDENT PROFILES Base: N = 289 SOURCE OF INCOME % Mostly Exports 18% Mostly Domestic 65% Split International & Domestic 17%
VIEW OF ECONOMY IN 2024 VS 2023 29% 22% 15% 23% 56% 55% Consumers Business Executives VIEW OF ECONOMY 2024 VS 2023 Worse Same Better • Consumers actually have a slightly worse outlook on 2024 compared to Business Executives. • However, 55% believe 2024 will be better than 2023. N = 289 N = 1,022 What is your view of the overall view of the economy for 2024 compared to 2023?
24 6% 2% 19% 8% 24% 18% 42% 37% 12% 28% 2023 2024 PERFORMANCE RANKING 2023 VS 2024 Very Poor Poor Average Good Very good 2023 ACTUAL BUSINESS PERFORMANCE VS 2024 EXPECTED PERFORMANCE Base: N = 289 ▪ Executer business performance varied greatly, However, 54% noted positive performance versus 25% negative in 2023. ▪ 2024 sentiment is more positive with 65% expecting positive results versus only 10% Negative results, boding well for 2024. On a scale of 1 Very poor, to 10 Excellent, pls rate your business performance in 2023? On a scale of 1 Very poor, to 10 Excellent, pls rate your business expected performance in 2024?
25 Business Performance Anticipated Performance Change Recovery period Sector 2023 2024 2023 to 2024 2024 2025 Longer Total Average 6.06 6.90 (0.84) 67% 26% 6% Manufacturing 6.97 7.81 (0.84) 77% 19% 3% Healthcare / Pharma 6.58 6.67 (0.08) 58% 42% 0% Logistics / transport 6.50 7.00 (0.50) 70% 20% 10% FMCG / Consumer goods 6.24 7.03 (0.79) 74% 24% 3% IT 6.06 6.76 (0.71) 65% 35% 0% Wholesale / Retail 6.03 7.03 (1.00) 60% 34% 6% Communications (PR, Advertising) 5.93 6.93 (1.00) 53% 47% 0% Other (specify) 5.79 6.53 (0.74) 68% 21% 11% Construction 5.79 6.07 (0.29) 71% 21% 7% Hospitality 5.73 6.73 (1.00) 68% 18% 14% Education and training 5.54 6.77 (1.23) 77% 8% 15% Professional services (Legal, Tax, Etc.) 5.08 6.42 (1.33) 58% 33% 8% Financial, banking, insurance 4.88 6.13 (1.25) 63% 13% 25% Best performing Worst performing BUSINESS PERFORMANCE 2023 - 2024 BY SECTOR Base: N = 289 ▪ Save for construction, Services, businesses that do not actually provide product seem to have suffered the most in 2023. ▪ However, services are also the most positive of a rebound in 2024. , but also see economic recovery being longer than other sectors. Caution small sample for some sectors
26 27% 27% 31% 33% 31% 37% 11% 3% WHEN WILL ECONOMY RECOVER 1st Half 24 2nd Half 24 2025 Longer VIETNAM ECONOMIC RECOVERY ▪ Poor performance was triggered by Vietnam and Global economic downturn and consumer reduced spending. ▪ In terms of Economic recovery, roughly 60% believe recovery will happen in 2024. ▪ Consumers expect a slightly longer-term recovery than Business Executives. Business Executives Consumers N = 289 76% 65% 65% 19% 16% 8% Vietnam Economic recession Decreased consumer spending Global economic down turn Lack of liquidity Banking restrictions on loans Supply chain issues REASON FOR POOR PERFORMANCE RATIONALE FOR POOR 2023 PERFORMANCE N = 1,022 If you rated your 2023 business performance as Poor – 1-5, what were the key reasons? When do you think the VN economy will recover?
5% 14% 24% 43% 7% 7% 7% 21% 29% 38% 5% Decrease a lot Decrease No change Increase a little Increase a lot Hire more freelancer than permanent staff Staff size Marketing Budgets 27 STAFF SIZE AND MARKETING BUDGET FOR 2024 Base: N = 289 ▪ 2024 will see an increase in both new hirings and increased marketing activities. ▪ Roughly 20% will decrease staff size and 28% decrease marketing activities. ▪ Inversely 50% will see a slight increase in staffing and 43% an Increase in marketing activities. INCREASE - DECREASE IN STAFFING / MARKETING SPEND How much will you increase / decrease staff size in 2024 vs 2023? How much will you increase / decrease Marketing spend in 2024 vs 2023?
28 2024 PREDICTIONS
2024 Predictions Measure Why Positive Neutral Negative Consumer Confidence 2023 was bad, so we are all hoping for better days ahead Consumer spend Maximum 4.2% Growth – largely inflation confidence at 51 Consumer debt Savings are being eroded and many are living on loans Sector growth Manufacturing, Education, F&B, Healthcare & Automotive Sector decline Most sectors will be stagnant or in decline especially services Shopping behavior Online, and cheaper venues will do OK, others will be stagnant as consumer down trade Real Estate / Construction Will be stagnant – causing significant impact on the economy Business sentiment Business sentiment is strong (65%) Increasing employment and marketing spend Manufacturing Manufacturing looks to grow – critical for recovery Though emotional confidence is up and manufacturing / exports should increase, the stalled property market, overall consumer debt, reduced savings and spending, will make 2024 not much better than 2023. Add to this a slow down in legislative judication due to the many financial misappropriation cases , may further dampen prospects. Anticipate partial recovery by Q2-Q3 2024, and full by Mid to late 2025. A Glass half full and half empty year ahead (score card 6/10)
30 Ralf Matthaes | Managing Director Email: Ralf.matthaes@infocusmekong.com Website: www.ifmresearch.com

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IFM 2024 Consumer Confidence INDEX Report (Jan 15,24).pdf

  • 1.
    1 Prepared by: Infocus MekongResearch January 15, 2024 IFM 2024 CONSUMER CONFIDENCE INDEX REPORT Ralf Matthaes | Managing Director Email: Ralf.matthaes@infocusmekong.com Website: www.ifmresearch.com
  • 2.
    SAMPLE PLAN Jan2024 SEC Household Income bands Total A 30,000,000 VND and more 18% B 20,000,001 - 30,000,000 VND 33% C 15,000,001 - 20,000,000 VND 20% D 10,000,001 - 15,000,000 VND 16% E Below 10,000,000 VND 13% METHODOLOGY • IFM consumer confidence Index, has been ongoing since 2012. For this report, the sample utilized ranges between 17,000 total and 1,000 Plus respondents nation-wide and was conducted 4 times in 2020 and 3 times in 2021 and twice in 2022 and 2023 and now for 2024. • Quantitative – Self-completion by end consumers. • Using IFM Mobile Panel via smartphones data collection. Sample error is 3-4% based on sample size per wave at 95% confidence level Age % 18-24 16% 25-34 39% 35-44 34% 45 Plus 10% Location % HCMC / Hanoi 40% 2nd tier - cities 22% Rural / sub-Urban South 14% Rural / Sub-Urban Central 10% Rural / Sub-urban North 14% Total 100% N = 1,022 Gender % Male 49% Female 51% 2 Date Sample 18-Dec 3,567 19-Dec 2,964 20-Mar 502 20-May 1,023 20-Jul 1,019 20-Dec 1,026 21-Jun 1,010 21-Oct 1,009 22-Feb 1,026 22-Jul 1,022 23-Jan 1,017 23-Jun 1,026 24-Jan 1,022 Total 17,233
  • 3.
    3 ECONOMIC SNAPSHOT Indices 2023 GDPUS $430 Billion GDP Growth 5.05% Inflation 3.25% Exports US $355 Billion Imports US $328 Billion FDI (32% growth, but mass reduction previous capital = much lower than stated) US $37 Billion Tourism (12.5 Million) US $28 Billion Total retails sales 2023 US $142 Billion Overseas Money Remittances US $14 Billion New Business Openings / Closures 160,000 New Businesses 200,000 Business Closures 65% (US $280 Billion) of GDP is driven by Domestic (Consumer) spend in Vietnam
  • 4.
  • 5.
    COVID EMPLOYMENT IMPACT Base:11,158 Jan. 2024 84% 14% 2% Jun. 2023 71% 27% 2% Jan. 2023 86% 12% 2% Jan. 2022 77% 19% 4% Jan. 2021 73% 20% 7% FULL TIME JOB WANTED EMPLOYMENT IMPACT • Full-time employment has increased since June 2023, but is still below pre-Covid 2019 levels. • Unemployment is stable at 2%. • The vast majority make ends meat via their main job. • However almost 40% add to their income via online sales and 1 in 3 are now playing the stock market. 5 81% 39% 30% 25% 24% Salary / Business earnings Sell products / services online Trade in stocks, funds, currency Trade, sell products / services offline Real estate rent/ sales SOURCES OF INCOME
  • 6.
    VIEW OF VIETNAM’SECONOMY – JAN 2020 – JAN 2024 • Optimism in the economy for 2024 has risen sharply, 56% and increase of 16% since Jan 2023. • However, a third still see the economy as being worse in 2024 than in 2023. • Note: view of the economy is not part of the consumer confidence index but rather a psychological emotive measure. 58% 12% 27% 40% 56% 27% 24% 42% 33% 15% 15% 64% 31% 27% 29% 2021 Jan 2021 Jul 2022 Jan 2023 Jan 2024 January Better Same Worse 2021 vs JANUARY 2024 VIEW OF THE ECONOMY Base: 11,158 6 What is your view of the overall view of the economy for 2024 compared to 2023?
  • 7.
    IFM CONSUMER CONFIDENCEINDEX JANUARY 2024 Base:17,216 2020 - 2024 CONSUMER CONFIDENCE Pre-COVID-19 COVID Wave 1 • Consumer confidence has dropped somewhat since Jan 2023, fueled by the Real Estate bubble burst, reduced exports, increased unemployment / reduced wages, and inflation. This does not bode well for 2024 consumerism. Index out of 110 Jan 2020 July 2020 Jan 2021 July 2021 Jan 2022 July 2022 Jan 2023 Jun 2023 Jan 2024 84 27 60 12 51 63 57 54 51 COVID Wave 2 Post COVID-19 7 Index: The index is based on 11 spend categories in terms of consumer spending “more – same – less” than previous Period. (More + Same Minus Less) of 11 Categories average) Divide by 11 sectors = Consumer Confidence Index score For the 11 sectors, will you spend More, Same, Less in 2024 than 2023?
  • 8.
    Base: 11,158 TOP FEARS2021 – 2024 • Inflation and Unemployment and VN Economic slow down, top all concerns followed by Pollution. • New fears include Global Economic slow down and Bankruptcy. • Key issue: all concerns seem to be increasing. 45% 39% 46% 51% 44% 36% 42% 50% 39% 34% 42% 50% 16% 36% 60% 56% Jan. 21 Jan. 22 Jan. 23 Jan. 24 Environmental pollution Vietnam economic slow down Unemployment Increased inflation Inflation Unemployment VN Eco. slow down Pollution Global Eco. downturn 44% 8 Bankruptcy 31% What are your biggest fears, reservation in 2024?
  • 9.
    54% 41% 35% 41% 44% 2019 2021 20222023 24-Jan LOANS TAKEN OUT IN PAST 12 MONTHS Base: 11,158 LOANS / LENDING AND DEBT • 41% have taken out loan in 2023, mostly from VN Banks and Friends. • 44% intend to take out a loan in 2024. • 62% of all loans are for immediate survival and paying off debt, an increase of 12% since 2021. 47% 54% 31% 11% 47% 29% 17% 3% 62% 46% 29% 4% VN banks Friends/ Family Consumer Fin. Co Foreign banks SOURCES OF LOAN 2024 2022 2021 40% 35% 32% 13% 22% 12% 7% 34% 35% 36% 26% 22% 11% 10% 33% 37% 25% 24% 17% 9% 7% Immediate survival Personal Business Real Estate to pay back Loans / Debts Education Automobile PURPOSE OF LOANS 2024 2022 2021 9 Did you take out a loan in Year X, from where, what purpose ?
  • 10.
    10 ABILITY TO SAVE 22%20% 15% 19% 12% 9% 3% ABILITY TO SAVE MONEY IN 2023 declined 20% Plus declined 19-10% declined 9-1% Same 0% Increased 1-9% Increased 10-19% Increased 20% or more ▪ A key measure of consumer confidence is their ability to save money. ▪ 57% of consumers noted a decline in savings, 43% by at least minus 10% and higher reduced savings. ▪ Only 24% experienced an increase in savings in 2023. 9% 18% 19% 12% 31% 11% WHEN WILL ECONOMY RECOVER Q.1 2024 Q.2 2024 Q.3 2024 Q.4 2024 Not Till 2025 Not Till 2026 VIETNAM ECONOMIC RECOVERY Base: 1,022 ▪ In terms of Economic recovery, only 27% believe recovery will happen in 1st half of 2024, while 31% In 2nd half of year ▪ 31% not till 2025 AND 11 % believe recovery will take longer = meaning consumer spend will be very conservative for 2024 How much Money were you able to save in 2023? When do you think the VN economy will recover?
  • 11.
  • 12.
    10% 16% 14% 19% 15% 25% 27% 19% 32% 44% 35% 41% 41% 35% 34% 17% 27% 25% 17% 20% 25% 15% Education Food & beveragesproducts Household utilities Health care products/services Communications Personal care products Transportation House hold care products Personal electronics Entertainment & dining out Home appliances Less Same More ESTIMATED CONSUMPTION GROWTH BY CATEGORY 2024 2024 Growth % Base: 1,022 • Education and F&B shall see the biggest growth in spend for 2024, followed by Household Utilities and Healthcare. • Entertainment & Dining Out, Home Appliances and Personal electronics will suffer. 12 31% 25% 19% 15% 2% -2% -2% -2% -12% -19% -20% For the 11 sectors, will you spend More, Same, Less in 2024 than 2023?
  • 13.
    SPEND INCREASE BASEDON CONSUMPTION VS INFLATION • Once inflation is taken out of the equation, actual consumption growth ranges between 31% & -20% across sectors. • Consumption increase = 50% driven by Education, vs 50% increase due to inflation. ▪ Actual total growth minus inflation = 4.18% for 2024 Base: 1,022 13 Category Total Increase consumption Increase in cost / inflation Actual growth Education 31% 58 42 17.9% Food & beverages products 25% 36 64 9.0% Health care products/services 15% 57 43 8.5% Household utilities 19% 20 80 3.8% Communications 2% 53 47 1.0% Personal care products -2% 60 40 No Growth in Consumption Transportation -2% 45 55 Household care products -2% 47 53 Personal electronics -12% 62 38 Entertainment & dining out -19% 59 42 Home appliances -20% 53 46 For the sectors you spend more on, why, increased consumption or inflation ?
  • 14.
    14 ECONOMIC IMPACT TRENDS 59% 59% 62% 63% 67% 16% 21% 15% 16% 11% Ihad to cutback on my overall spending versus 2022 I went shopping less often than in 2022 I held off buying big tickets iin 2023 My savings declined in 2023 I used cheaper retail outlets to save money 2023 CONSUMER BEHAVIOR TRENDS Agree Neutral Disagree Base: 1,022 2023 revealed a few concerning trends in the market 1. Down trading of both shopping venues and brands. 2. Reduction of shopping frequency. 3. Reduction in overall spending and savings. How much do you agree / disagree with the following statements?
  • 15.
    5 EMERGING METATRENDS METATREND = a change that changes change 15
  • 16.
    Base: 1,022 1. MAKINGMORE MONEY 13% 19% 25% 39% 4% WILL YOU SPEND MORE ONLINE IN 2024 THAN IN 2023 Much less Less Same More Much More 37% 25% 38% I MADE MORE MONEY IN 2023 THAN IN 2022 Agree Same Disagree 2. ONLINE SPEND Vietnamese made the same and less money than in previous years (63%). Online spend should increase in 2024, though spend reduced in 2023, aligning with downtrading retail trends How much do you agree / disagree with the following statements? How much will you spend online in 2024 vs 2023?
  • 17.
    17% 10% 7% 34% 8% 5% 18% 31% 7% 4% 12% 23% 8% 4% 13% 25% House Apartment LandTotal LAND GRAB BUST 2020 2022 2023 2024 Intent • Even though the Real estate market is in the dumps, Consumers are still keen to buy. • But the impact in terms of overall sales will be minimal in 2024. 3. LAND GRAB PURCHASE INTENT Base: 4,081 Have / Intend to purchase 17 Which of the following items did you purchase in Year x? Which of the following items are you 90% sure going to purchase in 2024?
  • 18.
    18 7% 16% 12% 2% 16% 5% 6% 14% 2% 13% 10% 10% 16% 3% 14% New carOverseas Holiday A new Business Overseas education Invest in Funds PURCHASE INCREASE GROWTH 2022 2023 2024 intent +5% +4% +2% +1% +1% 4. CONSUMPTION GROWTH - IMPACT ON BIG TICKET PURCHASE ITEMS Only 5 out of 13 big expense items will see any growth in 2024, with the automotive market potentially seeing a rebound from a feeble 2023. Base: 3,065 Which of the following items did you purchase in Year x? Which of the following items are you 90% sure going to purchase in 2024?
  • 19.
    19 21% 23% 33% 10% 39% 27% 38% 17% 18% 33% 10% 36% 23% 38% 16%15% 29% 4% 27% 14% 23% Stock market Expensive electronics Domestic Holiday Used car Insurance Motorcycle Home renovations PURCHASE DECLINE ITEMS 2022 2023 2024 intent -1% -3% - 4% -6% -9% - 9% -15% 4. CONSUMPTION DECLINE - IMPACT ON BIG TICKET PURCHASE ITEMS Home renovations, 2 wheelers and insurance should see the biggest drop in sales in 2024. Base: 3,065 Which of the following items did you purchase in Year x? Which of the following items are you 90% sure going to purchase in 2024?
  • 20.
    Online platforms Wetmarkets Ma & Pa stores Super/Hyper markets Convenience stores Street Vendors Shopping Mall 5. RETAIL LANDSCAPE SHIFTS • Big Winners: Online shopping and Ma & Pa stores are the only retailers that should see any increase, but marginally. • Shopping malls are in big trouble. 32% 19% 21% 34% 21% -9% -28% 19% 6% 5% 13% 7% -35% -4% 22% -2% 3% -3% -7% -35% -36% 2022 2023 2024 Intent 20 Base: 3,065 RETAIL OUTLET USAGE How much are you going to use the following retail outlets in 2024 vs 2023?
  • 21.
  • 22.
    22 3.3% 4.7% 43.3% 30.7% 18.0% COMPANY SIZE Self employed1 – 5 people 6 – 19 people 20 – 150 people More than 150 people 16.0% 13.3% 13.3% 9.3% 7.3% 6.7% 6.0% 5.3% 4.7% 4.0% 10% Manufacturing FMCG / Consumer goods Wholesale / Retail Communications (PR, Marketing) Hospitality Construction Professional services IT Pharma/ health services Financial, banking insurance Others INDUSTRY ▪ Half of all companies surveyed had under 20 staff and half had over 20 staff. ▪ 65% of executives surveyed revenue came from domestic business. ▪ All executive are either business owners, MD’s or senior level budget holders. ▪ 50% of businesses = Manufacturing, FMCG, Retail and Communications. RESPONDENT PROFILES Base: N = 289 SOURCE OF INCOME % Mostly Exports 18% Mostly Domestic 65% Split International & Domestic 17%
  • 23.
    VIEW OF ECONOMYIN 2024 VS 2023 29% 22% 15% 23% 56% 55% Consumers Business Executives VIEW OF ECONOMY 2024 VS 2023 Worse Same Better • Consumers actually have a slightly worse outlook on 2024 compared to Business Executives. • However, 55% believe 2024 will be better than 2023. N = 289 N = 1,022 What is your view of the overall view of the economy for 2024 compared to 2023?
  • 24.
    24 6% 2% 19% 8% 24% 18% 42% 37% 12% 28% 2023 2024 PERFORMANCE RANKING 2023VS 2024 Very Poor Poor Average Good Very good 2023 ACTUAL BUSINESS PERFORMANCE VS 2024 EXPECTED PERFORMANCE Base: N = 289 ▪ Executer business performance varied greatly, However, 54% noted positive performance versus 25% negative in 2023. ▪ 2024 sentiment is more positive with 65% expecting positive results versus only 10% Negative results, boding well for 2024. On a scale of 1 Very poor, to 10 Excellent, pls rate your business performance in 2023? On a scale of 1 Very poor, to 10 Excellent, pls rate your business expected performance in 2024?
  • 25.
    25 Business Performance Anticipated Performance Change Recoveryperiod Sector 2023 2024 2023 to 2024 2024 2025 Longer Total Average 6.06 6.90 (0.84) 67% 26% 6% Manufacturing 6.97 7.81 (0.84) 77% 19% 3% Healthcare / Pharma 6.58 6.67 (0.08) 58% 42% 0% Logistics / transport 6.50 7.00 (0.50) 70% 20% 10% FMCG / Consumer goods 6.24 7.03 (0.79) 74% 24% 3% IT 6.06 6.76 (0.71) 65% 35% 0% Wholesale / Retail 6.03 7.03 (1.00) 60% 34% 6% Communications (PR, Advertising) 5.93 6.93 (1.00) 53% 47% 0% Other (specify) 5.79 6.53 (0.74) 68% 21% 11% Construction 5.79 6.07 (0.29) 71% 21% 7% Hospitality 5.73 6.73 (1.00) 68% 18% 14% Education and training 5.54 6.77 (1.23) 77% 8% 15% Professional services (Legal, Tax, Etc.) 5.08 6.42 (1.33) 58% 33% 8% Financial, banking, insurance 4.88 6.13 (1.25) 63% 13% 25% Best performing Worst performing BUSINESS PERFORMANCE 2023 - 2024 BY SECTOR Base: N = 289 ▪ Save for construction, Services, businesses that do not actually provide product seem to have suffered the most in 2023. ▪ However, services are also the most positive of a rebound in 2024. , but also see economic recovery being longer than other sectors. Caution small sample for some sectors
  • 26.
    26 27% 27% 31% 33% 31% 37% 11% 3% WHEN WILL ECONOMYRECOVER 1st Half 24 2nd Half 24 2025 Longer VIETNAM ECONOMIC RECOVERY ▪ Poor performance was triggered by Vietnam and Global economic downturn and consumer reduced spending. ▪ In terms of Economic recovery, roughly 60% believe recovery will happen in 2024. ▪ Consumers expect a slightly longer-term recovery than Business Executives. Business Executives Consumers N = 289 76% 65% 65% 19% 16% 8% Vietnam Economic recession Decreased consumer spending Global economic down turn Lack of liquidity Banking restrictions on loans Supply chain issues REASON FOR POOR PERFORMANCE RATIONALE FOR POOR 2023 PERFORMANCE N = 1,022 If you rated your 2023 business performance as Poor – 1-5, what were the key reasons? When do you think the VN economy will recover?
  • 27.
    5% 14% 24% 43% 7% 7% 7% 21% 29% 38% 5% Decrease alot Decrease No change Increase a little Increase a lot Hire more freelancer than permanent staff Staff size Marketing Budgets 27 STAFF SIZE AND MARKETING BUDGET FOR 2024 Base: N = 289 ▪ 2024 will see an increase in both new hirings and increased marketing activities. ▪ Roughly 20% will decrease staff size and 28% decrease marketing activities. ▪ Inversely 50% will see a slight increase in staffing and 43% an Increase in marketing activities. INCREASE - DECREASE IN STAFFING / MARKETING SPEND How much will you increase / decrease staff size in 2024 vs 2023? How much will you increase / decrease Marketing spend in 2024 vs 2023?
  • 28.
  • 29.
    2024 Predictions Measure WhyPositive Neutral Negative Consumer Confidence 2023 was bad, so we are all hoping for better days ahead Consumer spend Maximum 4.2% Growth – largely inflation confidence at 51 Consumer debt Savings are being eroded and many are living on loans Sector growth Manufacturing, Education, F&B, Healthcare & Automotive Sector decline Most sectors will be stagnant or in decline especially services Shopping behavior Online, and cheaper venues will do OK, others will be stagnant as consumer down trade Real Estate / Construction Will be stagnant – causing significant impact on the economy Business sentiment Business sentiment is strong (65%) Increasing employment and marketing spend Manufacturing Manufacturing looks to grow – critical for recovery Though emotional confidence is up and manufacturing / exports should increase, the stalled property market, overall consumer debt, reduced savings and spending, will make 2024 not much better than 2023. Add to this a slow down in legislative judication due to the many financial misappropriation cases , may further dampen prospects. Anticipate partial recovery by Q2-Q3 2024, and full by Mid to late 2025. A Glass half full and half empty year ahead (score card 6/10)
  • 30.
    30 Ralf Matthaes |Managing Director Email: Ralf.matthaes@infocusmekong.com Website: www.ifmresearch.com