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Demand for spending decreased, a series of businesses faced the risk of closing down

Demand for spending decreased, a series of businesses faced the risk of "closing down"

Friday 28, 08 2020
Currently, more than 90% of families in Vietnam are affected by income effects due to the COVID - 19 pandemic that has not been controlled. Therefore, these families are gradually adopting "tightening" spending policies, limiting money spending, causing businesses to be stagnant.

●     Not only in Vietnam but people all over the world tend to spend less

A survey by the AP and National Opinion Research Center (NORC) at the University of Chicago (USA) shows that about 66% of Americans spend less than usual, while 45% save more money. a moment before the Covid-19 pandemic. The survey was conducted from August 17-20 with 1,075 adults in the US, with a margin of error of 4.1%.
The latest statistics on US labor during the Covid-19 pandemic show that the unemployment rate in July fell 9.2% among whites, 12% among Asians, and 12.9% among Hispanics. The unemployment rate among African people was 14.6% and remained unchanged from June.
 Not only in Vietnam but people all over the world tend to spend less
European economies, which are expected to bounce back from the recession more strongly than the US, may take longer to overcome the difficulties caused by the Covid-19 pandemic. Figures released by research firm IHS Markit on August 21 show the Purchasing Managers' Index (PMI), based on a survey of 5,000 companies in 19 countries - eurozone, it was only 51.6 points in August 2020 - compared with 54.9 points recorded in July. The 50 point mark marks a decline or growth.
In addition, the survey shows that companies are cutting jobs for the sixth consecutive month, with the largest number of laid-off workers in the manufacturing sector. Eurozone economy declines by 12.1% in Q2 / 2020.
Japan currently has about 2.4 million workers on leave and receive government benefits. In the job market, the most disadvantaged is the group of irregular workers, which includes those who are underpaid or work part-time. This group currently accounts for 38% of the workforce in Japan, and at the same time accounts for 75% of the workforce working in restaurants and hotels - two industries strongly affected by the pandemic.
According to the latest report by the International Labor Organization (ILO), about 93% of workers worldwide are currently affected by the pandemic in varying degrees.
In the first quarter of 2020, countries lost a total of about 185 million jobs, and in the second quarter of 2020, about 480 million.
However, according to experts, the unemployment statistics do not include millions of workers, especially female workers, who have to quit their jobs and leave the labor market to take care of their families before the impact of the pandemic. In addition, this figure also does not include about 4.2 million workers who have stopped working, equivalent to about 6% of the total workforce.

●     Saving is the best solution when income is reduced

The Consumer Confidence survey report, conducted by The Conference Board® and Nielsen, published in early August 2020 shows that, in the second quarter of 2020, Vietnamese people admit that they have spent less than the quarter. before. After saving, their idle money is spent on new clothes, accounting for 39%, down 3% compared to the first quarter of 2020. According to Nielsen Vietnam, this is due to job cuts and unrest in the public sector jobs of many people, increasing anxiety about their income and finances, leading to a reduction in unnecessary expenses.
According to CBRE Vietnam, it is estimated that by the end of this year, consumers' psychology still hesitates to spend and give priority to food items, essential products as well as health.
 Saving is the best solution when income is reduced
Market research firm Ipsos said that about 90% of the Vietnamese surveyed confirmed income became negative because of the outbreak of the disease and the measures of social isolation. Nearly half of them have lost more than 20% of their income, mainly in the group of unskilled workers. According to Ipsos, the affected income makes the daily habits of Vietnamese people change significantly 17% of low-income households have to tighten their spending. The biggest cuts were made on travel, meals, clothing, and electronics.
Adopting different shopping behaviors, according to Ipsos, could become a long-term habit in the future. Consumers begin to look for products more deliberately, choosing brands that not only meet essential needs but also can easily shop, providing a feeling of care and empathy.
Figures released by the General Statistics Office show that 31 million Vietnamese people have lost their jobs or reduced their income because of Covid-19. In which, the number of people with reduced income accounts for 57.3%. This caused the average monthly income of workers in the second quarter to decrease to 5.2 million (down 525,000 dongs from the previous quarter and 279,000 dongs over the same period), according to the National Statistics Office.
According to the Ministry of Industry and Trade, in the 7 months of 2020, the total retail sales of consumer goods and services of the whole country reached 2,799.6 trillion dongs, down 0.4% from the same period last year. In which,  Ho Chi Minh City - the largest economic center in the country - had a sharp decline. Statistics from the Department of Industry and Trade of the city. Ho Chi Minh City showed that, in the first 7 months of this year, the total retail sales of consumer goods and services were only 718,133 billion dongs, down 3.8% over the same period last year.
The difficulty of the retail business resulted in a series of businesses having to pay the trading premises, suspend their business. The Department of Business Registration (Ministry of Planning and Investment) has recorded that up to 8,102 wholesale and retail enterprises across the country are waiting for dissolution due to business losses. The Southeast is the leading region in the country in terms of the number of enterprises waiting for dissolution and the number of enterprises registered to suspend business.

Translated by Vietnam Credit


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