Domestic retailers on path to recovery

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

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

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

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

According to a survey conducted by Infocus, consumer confidence in Vietnam dropped to 54 points in June 2023 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 said that the market is recovering with rosy signs for the second half, noting its hope that new orders from major markets will rise in the remaining months, and that the trend of declining lending rates will continue to boost consumption.

VNDIRECT also held 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, which is expected to bring about dual benefits as consumers can access items with lower prices, and businesses enjoy additional revenue.