Domestic retailers see gradual recovery

SSI Securities Joint Stock Company forecasts that the companies will see a return to profit growth ahead in the fourth quarter and in 2024 thanks to the acceleration of disbursement of consumer loans and improvements in macro-economic conditions.

The long-term prospects of Vietnamese retailers will depend on their transition from traditional to modern commerce, as well as their capital mobilisation plans, the firm said.

During the first six months, retailers encountered various difficulties, yet experts believed that they have already gone through the hardest period.

Total revenue from retail sales of consumer goods and services increased by 10.9% on-year in the first six month of this year to reach more than VND3.01 quadrillion, equal to US$127 billion, according to the General Statistics Office (GSO).

According to a survey conducted by Infocus, consumer confidence in the nation dropped to 54 points in June from 63 points in July, 2022. The 2023 PwC Consumer Insights Survey in Vietnam also revealed that Vietnamese consumers have drastically adjusted their spending habits, with 62% “holding back” on non-essential spending amid the globally rising cost of living.

However, VNDIRECT Securities Corporation outlined that the market is in the process of recovering with rosy signs ahead for the second half of the year, noting its hope that new orders from major markets will rise over the remaining months of the tear, and that the trend of declining lending rates will continue to boost consumption.

VNDIRECT also believes that the consumption of electronics, particularly home appliances, will experience the strongest growth in the time ahead.

Furthermore, the value-added tax (VAT) has been reduced from 10% to 8% for various essential items such as dry food, beverages, confectionery, and household utensils, a move which is expected to bring about dual benefits as consumers can access items with lower prices, and businesses enjoy additional revenue.