How COVID-19 changed personal finance in Vietnam
Confidence in Vietnam is returning now that COVID-19 is back under control, according to new data from YouGov. However, the pandemic has transformed the personal finance landscape, with consumers now more conservative about their short-term spending habits and more prudent in their long-term financial plans.
Vietnamese confidence in the improvement of COVID-19 situation has shot up since lockdowns ended in Vietnam, with optimism rising from around 30% in September to almost pre-pandemic levels of 80% in October. However, despite the positive outlook for the ‘new normal’, families are still dealing with the impact of COVID-19 on their personal finances, which have seen a significant hit in 2021 compared to previous outbreaks.Just under half of all people (48%) have seen their income fall in 2021. More than a quarter (28%) reported a slight decrease of between 10-20%. Meanwhile, one-fifth (20%) saw an even sharper fall of at least 20%.
On a positive note, over one-third of Vietnamese (38%) were able to increase their savings during the pandemic, with work-from-home mandates leading to reduced spending on non-essential items such as travel, leisure, and eating out. This is the highest rate in the region, just ahead of Hong Kong and far ahead of Singapore. However, others were less fortunate, with more than a third (34%) of Vietnamese dipping into their savings and a fifth (21%) borrowing cash to get through the outbreak.
Consumers become more conservative… and more modern
This has caused consumers to re-evaluate their current spending habits and re-assess their long-term financial plans. Over half (53%) of Vietnamese cut down on non-essential spending in the last six months. Meanwhile, more than four-fifths (81%) plan to do so in the future.
Vietnamese consumers are now some of the most prudent in the world. Two-thirds (67%) are more careful with their personal finances than before the pandemic. Meanwhile, a third (34%) prioritize protecting their household finances in case of emergencies. That is almost 10% higher than the global average. Vietnamese are also more keen to invest and reduce their debts than the average consumer elsewhere in the world.
However, while we are becoming more conservative in what we spend, we are also becoming more modern in how we spend it. E-commerce grew even more popular in 2021, while cashless transactions saw a boost during lockdown and e-wallets continue to gain traction. Consumers have become more confident managing their finances online and this digital financial trend is set to continue post-pandemic.
Commenting on the data, Thue Quist Thomasen, CEO of YouGov Vietnam, said:
“Our data shows that confidence is returning. This is essential for Vietnam to rebound and recover. However, it also shows that Vietnamese consumers have become more conservative in their approach to personal finance, with the recent crisis highlighting the need for prudent and long-term financial planning.
“This opens up new opportunities for financial service companies offering products which cater to these trends. Vietnamese want to save, invest, and protect their families from financial difficulties. And consumers are now more comfortable doing this online.
“However, it is a crowded space with more than a dozen companies competing for market share. Therefore, brands need to differentiate themselves and their products through increased advertising and reputation management focused on the profiles and priorities of these potential customers.”
With operations in the UK, North America, Mainland Europe, the Nordics, the Middle East, and Asia Pacific, YouGov BrandIndex draws data from million of interviews across different sectors in the global market.
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