How is inflation changing Vietnamese consumer habits?

(Adapted from an article on 24h.com.vn)

According to Trading Economics, June consumer prices in the United States and Europe rose at their fastest rate in decades, pushing inflation to unprecedented levels. Fuel, food, consumer goods and transport costs all rose sharply. Vietnam was no exception.

Because of the long Covid pandemic, many goods became scarce, and the prices of essentials such as cooking oil, meat, milk and cleaning products rose across the board. While the incomes of most Vietnamese families stayed flat, fell or became uncertain, inflation changed how Vietnamese people shop.

Many people who used to hunt for foreign or hand-carried goods have returned to domestic brands, because shipping costs pushed up foreign prices and households needed to cut spending. Ms N.H.H. from Thanh Xuan (Hanoi) said she used to buy Japanese, Thai and European detergents, but after learning that Vietnamese-made detergents are also of good quality, with competitive and stable prices, she switched to Vietnamese products.

Mr N.T.H. from Hoang Mai, Hanoi, also chose SPY laundry detergent with softener — a 100% Vietnamese brand made at the Komlife factory — over unverified “foreign” detergents sold on the open market. Many consumers say that foreign-labelled detergents and softeners on the market have erratic prices, are mixed with counterfeits, have uncertain quality and have no company taking responsibility for them. Raids on warehouses of counterfeit and untraceable goods have left consumers unsure about the real quality of foreign detergents sold widely online. Smart consumers now look for products with clear origins, quality standards registered with and overseen by the authorities, competitive prices and attentive service.

A representative of the SPY brand said that in recent years SPY products have been well received and trusted by consumers. Although more than two years of Covid disrupted supply chains and damaged the company’s distribution network, signs of recovery returned as soon as the pandemic was brought under control.

Mr Le Tien Dung, production director at the Komlife Vietnam factory, which owns the SPY brand, added that the past two years had been a valuable time for Komlife to focus on developing new products, strengthening production management and building its sales team. As soon as social distancing ended, the company launched a new product — SPY Ultra Clean laundry detergent with softener — which consumers have received well.

The economic and social upheaval of recent years has shifted the consumer goods market and opened a rare opportunity for domestic manufacturers. By seizing this moment, Vietnamese businesses can gain ground at home and grow their market share.

Adapted from “Lạm phát ảnh hưởng thế nào đến thói quen tiêu dùng của người Việt?”, 24h.com.vn, 11 August 2022 (in Vietnamese).