Vietnam Economic Outlook 2022
The Vietnam economic outlook for 2022 is extremely positive with a strong bounce-back in consumer demand beyond most (including Cimigo’s) expectations. The economy in Vietnam is back on a growth trajectory for 2022, with a GDP growth forecast at 6.5%. This follows GDP growth in 2021 of just 2.58%. This was the lowest level since 1986 which recorded 2.3%.
This short presentation was prepared for the Britcham seminar on March 17th, 2022 titled Kickstart The Economy Series: Vietnam Economic Outlook 2022 and delivered by Richard Burrage, Managing Director, Cimigo.
Vietnam economic outlook 2022
Sales of retail goods have already bounced back above the 2019 level (and will quickly recover beyond the 2020 level) and continue a growth trajectory. Sales of retail services in 2021 remain 32% below the 2019 level. Cimigo expects these to have recovered by September 2022 and be back on a growth trajectory.
Vietnam economy: Manufacturers are optimistic about expanding output in 2022
Manufacturing businesses remain optimistic towards expanding output in 2022 and have been signaling positive growth since October 2021. Headwinds to meet growing orders remain including the supply of raw materials, freight costs and attracting migrant workers back who returned to their home provinces as a result of Covid insecurities.
Vietnam economy: Consumer demand shrank in 2020 and 2021
Outbound travel, out-of-home entertainment, domestic travel, eating out of home, spa and beauty services all saw declines in demand over 2020 and 2021. High ticket vehicles and durables suffered as purchases were delayed. Home appliances, fashion (sports apparel being an exception), devices including smartphones and tablets, and home furnishing sales in Vietnam all declined in 2020 and 2021. New apartment sales were further constrained by both supply issues and delayed purchases. These changes do not represent permanent changes, as pent-up demand remains, these categories will bounce back as household incomes recover.
Vietnam economy: consumer demand boost in 2020 and 2021
In contrast, some categories (personal wash, hygiene, packaged foods, books, electrical accessories (e.g. headphones) and sports casual apparel saw their historic growth accelerate (often dramatically) in 2020 and 2021. These shifts in consumer expenditure will not endure, as they are reactionary behavioural changes brought about by Covid.
Other categories and channels (online, value for money consumer packaged goods (CPG), ride-hailing, gaming, content streaming, e-wallets and education technology) saw their historic growth accelerate but will see their growth endure, spurred forward by Covid and fundamentally altering how consumers in Vietnam behave. These changes in behaviour will not reverse as Covid dissipates.
Consumers are back: Now is the time to be aggressive in Vietnam consumer marketing
- The majority of consumers will be far more thrifty. Consumers will seek lower-cost channels. They will go out of their way to find better prices. Protect your brand whilst providing value in your promotions. A tough balance.
- Shifting shopping channels and a huge boost to online. Monitor your channels closely for changes.
- Budgets back at 2019 levels (or more if you expect to gain share). A&P budget mix: brand building 60% | sales activating 40%.
- Communications need to be far more uplifting and confidence-inspiring.
Hy Vu - Head of Research Department
Joe Nelson - New Zealand Consulate General
Steve Kretschmer - Executive Director
York Spencer - Global Marketing Director
Laura Baines - Programmes Snr Manager
Mai Trang - Brand Manager of Romano
Hanh Dang - Product Marketing Manager
Luan Nguyen - Market Research Team Leader
Max Lee - Project Manager
Chris Elkin - Founder
Ronald Reagan - Deputy Group Head After Sales & CS Operation
Chad Ovel - Partner
Private English Language Schools - Chief Executive Officer
Rick Reid - Creative Director
Janine Katzberg - Projects Director
Anya Nipper - Project Coordination Director
Dr. Jean-Marcel Guillon - Chief Executive Officer
Joyce - Pricing Manager
Matt Thwaites - Commercial Director
Aashish Kapoor - Head of Marketing
Kelly Vo - Founder & Host
Thanyachat Auttanukune - Board of Management
Hamish Glendinning - Business Lead
Thuy Le - Consumer Insight Manager
Richard Willis - Director
Ha Dinh - Project Lead
Geert Heestermans - Marketing Director
Louise Knox - Consumer Technical Insights
Aimee Shear - Senior Research Executive
Dennis Kurnia - Head of Consumer Insights
Tania Desela - Senior Product Manager
Thu Phung - CTI Manager
Linda Yeoh - CMI Manager