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Consumer Confidence Index Vietnam: A Boost in The Thriving Market

Social Outreach

27/10/2023

40

Understanding Consumer Confidence Index Vietnam

Let’s start with the basics. The Consumer Confidence Index Vietnam (CCI) can be easily explained as a key predictor of consumer purchasing patterns. Typically, it reflects the consumer’s view on many factors, such as job prospects, income stability, or the country’s financial health.

CCI is the key predictor of consumer purchasing patterns

CCI is the key predictor of consumer purchasing patterns

CCI trends over time are important details that help understanding economic conditions. For starters, they influence policy decisions and guide business strategies. A high CCI suggests confidence, which can lead to increased consumer spending and therefore, economic growth.

Meanwhile a low CCI indicates concerns that may reduce spending. This figure varies by region and is a key tool for gauging consumer outlook and its impact on the broader economy.

The Current State of Consumer Confidence index Vietnam

Currently, Vietnam CCI paints a positive picture. Based on the data provided by Nielsen global survey of consumer confidence and spending intentions, this year has witnessed a slight increase in consumer confidence, marking a tremendous improvement compared to previous years.

Nielsen data of consumer confidence index yearly

Nielsen data of consumer confidence index yearly

This surge in CCI signifies the country’s robust economic recovery and offers an optimistic outlook for businesses in the region. This emerging optimism among Vietnamese consumers translates to increased willingness to spend, presenting promising opportunities for businesses.

The robust consumer confidence index indicates that people are starting to feel financially secure, forecasting positive future growth. Remarkably, despite the overarching economic challenges presented by global circumstances like the COVID-19 pandemic, the consumer confidence index Vietnam has surged.

Consumer Spending Habits in Light of the Positive Change

From a psychological perspective, consumer confidence index Vietnam directly impacts purchasing decisions. When people feel optimistic about their personal finances and the state of the economy, they are more likely to make bigger purchases, invest, or spend on non-essential items. This hopeful outlook on the economy emanates from improved consumer sentiment, leading to a more vibrant market.

Consumer confidence index Vietnam and consumer habits

Consumer spending habits largely affects the overall economic landscape

With this increased confidence, consumer spending habits in Vietnam are changing. According to PWC, there’s a noticeable shift towards higher value products and services in Vietnam, a result of the rise in disposable income. While essential spending remains stable, discretionary spending is on the rise.

This change presents a brilliant opportunity for businesses to introduce new products and services that cater to this newfound confidence. Businesses in Vietnam can yield lucrative returns by adapting to these changes and leveraging the optimistic economic backdrop.

Riding the Wave: Opportunities for Businesses

The rising Consumer Confidence Index Vietnam presents a vast sea of opportunities for businesses and investors. As the tide changes, it is crucial for businesses to ride the wave and use the consumer confidence surge to their advantage.

Tailored product offerings

A better understanding of customers will benefit businesses one way or another. The rising CCI points to a positive economic outlook and increased buying power. Businesses can turn this into a competitive advantage by investing in market research, analyzing consumer trends, and aligning products or services with consumer needs and expectations.

Consumer-centric products and services

Consumer-centric products and services

Although greater consumer confidence implies that consumers are willing to spend more, they will still only spend on products or brands that resonate with them. Profound market research and appropriate marketing strategies will close the gap between businesses and customers.

This will allow you to gauge their interests and offer them products and services that suit their preferences. Therefore, knowing your consumers is not merely a choice but a business necessity.

Quality over quantity

As consumers are more willing to invest, they will lean towards products with superior quality. To adapt to this change, businesses can take more time developing new products to ensure their quality instead of chasing quantity figures.

The key to winning over customers is all about how relevant the values you provide are instead of how many. By emphasizing quality, businesses showcase their commitment to customer satisfaction, which enhances consumer perceptions and bolsters brand loyalty.

This involves taking more time in brainstorming product ideas, conducting holistic market research, and developing  and testing the products thoroughly. Many businesses have taken on a similar approach, all while bolstering enhancing marketing efforts to maintain their customers’ interests.

Digital marketing platforms like websites, social media channels, or emails can be utilized to maintain conversations with consumers in various ways such as daily social media posts, 4 to 5 blog articles per week, and emails where appropriate.

However, it is important to remember that “quality over quantity” also applies to these digital marketing methods, so make sure to invest your time and resources properly and keep your audiences hooked until your new projects are ready for the market.

Strategic market expansion

Amidst the backdrop of rising consumer confidence index Vietnam, businesses have a valuable opportunity to expand their market presence. An expansion can mean geographically reaching out to new locations or diversifying your offerings.

Rising CCI means new options and opportunities

Rising CCI means new options and opportunities

Geographically, businesses can consider venturing into new regions or cities within Vietnam. Though, it is vital to conduct meticulous market research and understand local dynamics to ensure success. Alternatively, vertical diversification involves expanding product or service offerings to cater to a broader range of consumer needs.

Before committing, businesses must carefully weigh the potential benefits against associated risks before embarking on either form of expansion. When executed properly, market expansion can lead to increased market share and sustained growth in Vietnam’s thriving consumer-driven landscape.

Vietnam has opened its doors for many major enterprises in the world in order to diversify the business landscape and attract foreign investment. While there has been considerable success across multiple industries, there are also many failures, most notably that of McDonald’s.

Back in 2014, one of the USA’s biggest fast food chains opened their first store in Vietnam with a vision of 100 stores across the country by the end of the decade. Now that we have reached 2024, the number is still a middling 33, with most stores located in Hanoi and Ho Chi Minh City only.

The public was excited about the news as there were lines of people in front of the very first stores to taste the world-famous Big Mac and test out the drive-thru concept, two new and exciting additions in the country’s FnB industry. However, as of 2024, it is evident that the project was a bust.

Despite coming up with creative ideas inspired by Vietnamese cuisine (Pho Burger) like what they did for other markets, their signature taste never clicks with the local palate. On top of that, their prices did not help as a Big Mac is more expensive than the average bowl of Pho. Eventually, the competition caught up, as KFC and Lotteria remained strong and Texas Chicken began its takeover.

Foster strong customer relationships

This has already been a well known fact around any business. Usually, what drives a business is not the amount of customers they have but rather the quality of the connection between brands and consumers.

A positive consumer confidence index offers an opportunity for business owners to build healthy relationships with consumers. Emphasizing consistent communication, impeccable customer service, and reliable products will help establish a credible reputation.

While promotions are a great incentive to retain consumers, it is not quite a sustainable method, especially in the long run. This is why many businesses have turned to establishing an identity for themselves in order to offer consumers something they can only find from the business. Social media platforms, like Instagram, TikTok, or Facebook, are excellent mediums for businesses to achieve this goal.

For example, M&M’s is a major player in the highly competitive snack division of the food and beverage industry. While they have reached household name status for years, they have continued to redefine their branding. Their mascots are the colorful talking candies with diverse personalities that can interact and resonate with their consumers, forging a sense of familiarity between consumers and the brand, therefore maintaining M&M’s position in the market for years to come.

One major evidence of the positive public perception of these mascots is the early 2023 campaign where they were retired and replaced by a new spokesperson, Maya Rudolph. This sparked a wave of controversy among fans of the mascots as they demand the return of these characters.

In the end, M&M’s released the second half of the campaign, reverting the change altogether and uploading a “press conference” featuring the entire candy crew. While it is unsure whether M&M’s pivoted due to the backlash or the campaign was intentional, this goes to show that creating the perfect mascot for your brand and its consumers will go a long way in retaining customers.

Read more: The upcoming business trends of the next 5 years will reveal to you what consumers are looking for.

Final thoughts

In conclusion, the rising consumer confidence index Vietnam is a signal that businesses should pay attention to. By understanding consumers, focusing on quality, expanding strategically, and building trustful relationships, your business can turn this wave of consumer confidence into a tide of success.

For assistance, contact On Digitals. With our team of experts, we stand ready to be the solution to all your marketing struggles and steer your business towards brighter opportunities. Contact us to learn more about our SEO, social media marketing, and website design services.


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