Therefore, moving fast to understand changes in consumer demands is crucial for any business to grow sustainably, according to research conducted by Kantar Worldpanel Vietnam.
Internet accessibility in Vietnam at present includes 94% of urban households and 69% of rural households.
If internet accessibility continues to grow at the current pace, nearly 100 percent of Vietnamese households will be connected to the internet in the next five years, the research said, adding that the number of broadband subscribers in Vietnam is 53.411 million.
The development of such services has prompted businesses and consumers to use the internet for different purposes like marketing, selling, buying and payment.
According to Google, eight out of ten Vietnamese consumers are online at least once a day.
Today’s Vietnamese consumers are also more familiar with shopping online. Even before they make a purchase, consumers use the internet to find information on products they considering buying, the research said.
Higher purchasing power breeds greater aspirations, but does not mean that consumers will spend uncontrollably.
“Over time, we have seen that households tend to save a greater proportion of their total income for the future and with interest rates in Vietnam still relatively rewarding, it is understandable. Anyone selling any consumer goods now has greater competition, within a smaller pie,” the research noted.
Nguyen Huy Hoang, Business Development Director - Kantar Worldpanel Vietnam, said thanks to widespread internet coverage, Vietnamese consumers can access more diverse products and services. Through virtual stores, they can purchase products at home.
With rising incomes and a growing middle class, cross border shopping is another developing trend. Many international brands start seeing Vietnam as a great opportunity for them to increase their sales. Today, this is happening in various industries such as fashion with many international brands moving into Vietnam and in fast moving consumer goods markets.
More foreign brands can penetrate Vietnam‘smarket thanks to the proliferation of foreign retailers entering the market such as Emart, Aeon Mall and most recently 7-Eleven.
Each has their own plan to expand with more store openings that will make more international products more accessible. With more foreign products more accessible to the masses in modern arenas but also in more traditional stores, this represents a threat to local products in Vietnam.
Hoang said using the internet, businesses can promote their products to consumers in other countries quickly and cheaply, noting that borderless online shopping allows enterprises to maximise sales.
The internet can also help farmers, small enterprises and communities introduce their products to the world.
However, he said, the e-commerce market in Vietnam is still at the very early stage of development and needs big players to bring knowledge, know-how and expertise.
Fabrice Carrasco, Managing Director of Kantar Worldpanel Vietnam and Philippines said Vietnamese consumers raise a lot of issues, with brand owners finding it hard to keep up with their modern lifestyle, independent decisions and demand for product sophistication. Such complexity requires developing on-trend products and talking to shoppers.