Vietnam soars up 9 spots to tie with Indonesia as the second most confident country in the world. Vietnam saw a significant increase of 18 points for quarter 2, 2010, according to The Nielsen Company’s Global Consumer Confidence Survey.
Vietnam’s confidence index jumps to 119 points after taking a slight correction last quarter to 101 points. This 18 point jump makes this the highest confidence recorded for Vietnam since inception of the survey in Vietnam. In contrast, the global average increased only 1 point, standing at 93.
Global consumer confidence cautiously edged up one index point to 93 in the second quarter as confidence increases in booming Asian markets were offset by European consumers’ growing concerns of an escalating debt crisis, which battered confidence levels in Spain, Italy and France, according to the latest edition of the Nielsen Global Consumer Confidence Index. Consumer confidence rose two points in the U.S. in Q2 to 87, where the world’s largest economy continued on course for a slow, but steady climb out of the recession. Consumer Confidence Index levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
“While the global economy is in better shape than it was nine months ago, (+7 index points compared to Q3 2009), the ongoing European debt crisis is a major setback to the global economic recovery anticipated this year,” said Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of The Nielsen Company. “U.S. consumers closely watched unemployment numbers, while Europeans witnessed the government implement new and in some cases, severe fiscal austerity measures amid stagnant job markets and a weakening Euro. Consumers in Western developed economies realized that the road to full economic recovery is going to take a bit longer than expected. In the ongoing weak-to-moderate growth environment, there is some risk for businesses of deflationary pressure, requiring close attention to improving pricing power through more effective deployment of media, innovation and channel marketing efforts.”
Vietnam moves forward with less caution
“The enormous rise in optimism seen in the latest survey has taken ‘cautious’ out of Vietnam’s previous footing of ‘cautious optimism’,” said Darin Williams, Managing Director, Nielsen Vietnam “Vietnamese consumers are ready to spend, with new technology being the focus for many after they have paid for essential living expenses.”
Forty-seven % of respondents in Vietnam stated they would spend excess cash on new technology—the highest %age in Asia; 39 % stated they would spend spare cash on new clothes—a huge jump from 23 % in the last survey. In Q1, only 16 % of Vietnamese stated they would invest their excess cash, this has increased to 31 % in Q2.
“Financial product awareness and intent to use is also rising dramatically as banks and insurance companies have increased their advertising and Vietnamese have more spare cash on their hands,” Williams added.
Disparity Widens Between Developing and Emerging Markets
India (129 index points), Indonesia and Vietnam (both 119 index points) were the most optimistic nations in Q2, while consumer confidence in Spain plummeted by 10 index points to its lowest level on record at 69 index points from 79 in Q1 of this year.
“In Asia, major economies are experiencing growth headwinds in the form of higher inflation and asset price declines. While overall growth in China, India and elsewhere in Asia will still be strong, some slowdown can be expected as governments and central banks tighten monetary and fiscal policy. Businesses therefore need to exercise more prudence in their resource allocation within Asia,” said Dr. Bala.
Globally, 58 % of people—the same number as in the previous quarter—said they are still in recession with a disparity in recovery sentiment widening between developed and emerging markets. Thirty-nine % of Asia Pacific consumers and 51 % of Latin Americans said they are still in recession compared to 84 % of North Americans and 76 % of Europeans. Among those in recession, one in five (21 %) global consumers thinks the recession will last another year. However, this number increases among North Americans where nearly one in four (24 %) believes the recession will linger for more than 12 months.
Brighter Asian and Latin American Prospects
Six out of the top 10 most optimistic nations in the second quarter came from Asia and all these markets posted consumer confidence increases quarter-on-quarter. Vietnam recorded the highest consumer confidence increase in Q2 soaring 18 index points to 119, while Singapore (which recorded the highest consumer confidence increase in Q1), posted another solid five index point gain from 107 in Q1 to 112 points in Q2.
Prospects also look brighter in the Philippines (113 index points), China (109 index points), and Columbia (105 index points), which all recorded consumer confidence highs in their respective markets. “After five quarters of continuous consumer confidence increases in China, the one point increase in Q2 represents steady growth coming from consumers in rural villages,” said Chris Morley, Managing Director, The Nielsen Company China.
Economic recovery and consumer confidence also accelerated in Mexico, which posted a consumer confidence increase of five index points compared to the first quarter of the year. “While positive shopping basket trends in Mexico and Colombia show a slow reactivation in consumption, the population is still concerned about economic and job prospects,” said Felipe Urdaneta, Managing Director, Nielsen Colombia.
The Nielsen Global Consumer Confidence Survey was conducted between May 10 and May 26, 2010 and polled approximately 27, 000 consumers in 48 countries throughout Asia Pacific, Europe, Latin America, the Middle East and North America about their confidence levels and economic outlook. The Nielsen Consumer Confidence Index is developed based on consumers’ confidence in the job market, status of their personal finances and readiness to spend. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%.
T.N
Vietnamese
