AsemconnectVietnam - Vietnam’s retail sales of consumer goods and services in May was estimated at 519 trillion VND (22.09 billion USD), an increase of 1.5% over the previous month and 11.5% year on year thanks to the long holidays in the beginning of the month, according to the General Statistics Office (GSO).

The results pushed the total retail sales of consumer goods and services in the first five months of this year to 2.52 quadrillion VND (107.2 billion USD), a year-on-year rise of 12.6%, excluding the 8.3% rise in price, reported the GSO.
The result in the first five months of this year was the highest recorded in the same period since 2015, representing a surge of 28.3% over the same time in 2019 before the COVID-19 pandemic broke out.
In the first five months of this year, the revenue from retail sales of goods was estimated at 1.99 trillion VND, up by 10.7% year on year. The upturn was seen in sales of food and foodstuff (14.6%), garment and textile (11.1%), home appliances (4.8%), transport vehicle excluding automobiles (4.2%), and educational and cultural products (1.9%).
The strong rise was seen in revenue from retail sales of goods in many localities, led by Bac Ninh with 19.6%, Binh Dinh 14.8%, Binh Duong 13.8%, Thanh Hoa 12.1%, and Hai Phong 10.6%.
Meanwhile, revenue from accommodation and food services in the first five months was estimated at 268.3 trillion VND, up 22.1% over the same period last year, and that from other services reached about 253.6 trillion VND.
According to the vice Director of Department of Planning and Finance under the Ministry of Industry and Trade Nguyen Thuy Hien, despite the increase, the consuming power of the 100-million-strong market has yet to be fully exploited.
This is one of the reasons why the ministry proposed a reduction of value added tax on a number of goods groups to catalyse consumption, she said, expressing her hope that the cut will help promote goods production, job generation and State budget increase, thus contributing to completing the socio-economic development targets for this year.
Alongside, the ministry will also focus on implementing programmes to promote domestic trade, especially through digital platform and e-commerce, and support local firms to build trademarks, she said.
Vietnam remains an attractive retail market
Vietnam remains an attractive market for retailers as Vietnamese consumers remain optimistic about the economic challenges and are driving premium purchases.
Vietnamese consumers’ overall optimism remained one of the highest among countries globally, according to global management consulting firm McKinsey.
McKinsey wrote in a recent article on its website that Vietnamese consumers were optimistic that the country’s economy would rebound within two to three months and grow just as or even more strongly than before the COVID-19 pandemic.
There was also a clear intent by consumers to “splurge” and treat themselves, with more than 70% of respondents saying they intend to increase spending on categories of products or services they spent less on over the past year and a half.
It was estimated that more than half of the Vietnamese population would enter the global middle class by 2035, creating more disposable income and fuelling consumption.
However, Vietnamese consumers were also becoming more discerning and value-conscious.
McKinsey analysis showed that Vietnam’s prospects remained strong for the upcoming decade since GDP growth was on the rise again – with year-on-year growth of 2 to 7% expected between 2023 and 2030.
However, the country was facing headwinds at the start of 2023 which were likely to impact the ability of its population to spend.
“More Vietnamese consumers anticipate a reduction in income and savings than consumers in other Asia - Pacific countries, with more than 90% noting price increases, fears of inflation, gas shortages coupled with higher fuel prices, and rising interest rates. These mounting financial pressures and uncertainties are accelerating consumers’ shift to more discerning shopping choices.”
McKinsey said that Vietnamese consumers were becoming more sophisticated and seemed to be evolving in four ways: they were more value-conscious, preferred omnichannel platforms, had less brand and store loyalty, and looked for purpose in what they bought. A report by global trend forecasting organisation WGSN also said that Vietnam was a key growth market in the Asia – Pacific for brands and retailers this year.
WGSN also said that Vietnamese consumers were increasingly having trust in domestic brands and products with 76% said preferring goods of domestic brands to foreign brands, urging brands and businesses to seamlessly blend in-person and online channels by investing in online presence, service discovery 'click and collect' (order online and pick up in store), pay in-store for online orders, and multi-service upgrades.
As Vietnamese consumers were embracing the convenience and ease of digital payments, brands needed to start integrating digital payments and diverse payment methods across channels to reduce problems and increase conversion rates, as the trend of using cash will decrease in the coming years, WGSN said.
CK
Source: VITIC/Vietnamplus.vn