In the first few months of 2021, despite the impact of COVID-19, the retail industry in Vietnam grew positively. However, the fourth pandemic outbreak that resurged in May forced provinces over Vietnam to tighten social distancing and lockdowns. Most direct purchases were prohibited, many retail services had to shut down for a long period, leading to a plummet in the growth rate of the retail industry compared to 2020.
Experts from Da Nang Securities Joint Stock Company said that despite the flexibility to open sales via online channels, the third quarter of 2021 is still the lowest profitable quarter in recent years for retail companies. High operating costs led to a sharp drop in profit after tax.
Statistics from the General Statistics Office of Vietnam showed that retail sales of goods in the first nine months of 2021 were estimated at 2,779.7 trillion VND, down 3.4% over the same period last year. Retail sales in August alone fell 8% month-on-month and fell 25.3% year-on-year, but saw a slight increase of nearly 4.5% in September as social distancing measures were eased in many provinces. In the whole third quarter, it only reached 928 trillion VND, down 28% compared to the same period in 2020.
The retail industry of Vietnam is in the process of recovering. According to the Ministry of Industry and Trade, the total retail sales of goods and services in October increased by 18.5% compared to the previous month. In the structure of total retail sales of goods and services in ten months, commodity retail is still the industry with the largest proportion, accounting for 82.8%.
Viet Capital Securities Joint Stock Company (VCSC) said that by observing the revenue trends of international companies in three main product lines that are fashion and accessories; cosmetics; restaurant and beverage service, VCSC believes that the retail industry will experience a strong recovery since the situation of the COVID-19 pandemic in Vietnam is largely under control, and the Government begins to reopen all economic activities. This expectation is partly driven by a tendency of revenge shopping, in which consumers make up for the lost time taken by the pandemic with increased spending.
According to VNDIRECT Securities Corporation, the retail industry will benefit greatly when consumer demand increases at the end of the year. After the distancing period, the demand pent-up for many months will explode. Besides, many holidays that take place at the end of the year will also be a factor to promote shopping and spending. As a result, essential industries will recover quickly in the fourth quarter.
After a long time of being suppressed by the impact of COVID-19, consumers' trend of aggressive buying is booming. Deloitte's Vietnam Consumer Report 2021 points out that despite difficulties, Vietnam has proven to be one of the most resilient economies in Southeast Asia. Positive consumer sentiment also facilitates the service-retail industries to recover and grow in both the medium and long term.
The trend of consumers after the pandemic does not stop at the increase in purchasing power but also shows in the tendency to choose brands with good products and service quality even though the costs may be high rather than easily satisfied with cheap but low-quality products.
The survey results of Deloitte show that the motivation to promote shopping of Vietnamese people now lies not only in preferential programs or discounts. They paid more attention to the quality of the brand experience from start to finish, including satisfaction with previous purchases, convenience and speed of delivery, pleasant customer service experience, smooth transaction process, and clear return/refund policy and process.
Users are also focusing on a personalized shopping experience. Products and services that meet the needs and purposes of each customer will make them trust the brand and keep coming back for the next purchase.
Online shopping, despite taking the throne during the lockdowns, but because of the lack of real-life experience - which means making purchases at stores in person; for a long time, direct shopping is now more and more popular among consumers. The mainstream consumer shopping journey is a mix of online and offline. Consumers preview products on online channels, weigh in on prices or check out reviews, then visit a store in person to try the product before deciding whether to purchase or not.
Changes in consumption trends of Vietnamese customers after COVID-19 have shown positive signals and given the retail industry the green light to recover in the last months of the year.
Source: bnews, baodansinh
Compiled by VietnamCredit