After six months of holding steady, consumer confidence dropped to last year's position, indicating a declining confidence among urban consumers, according to Market Research Firm Kantar Worldpanel.
The group's consumer confidence indicator, called "The Purchasing Konfidence," fell from 8.1 to 7.4 points. The firm calculates that number based on purchasing capability, willingness to buy and real purchases.
The fall was driven by lower income groups who earn less than VND3 million ($142.9) a month, according to the report issued last Wednesday.
Although the consumer capacity and eagerness to buy improved during the last quarter among Vietnamese consumers, real purchase sub-index faced a decline as consumers tightened spending on fast-moving consumer goods (FMCG). According to the report, 51 percent of urban consumers stated that they anticipated their financial situation would improve in the next 12 months, and only 3 percent thought it would get worse.
However, when asked about their current condition, only 15 percent said they had no financial worries while another 22 percent admitted to being strained.
As optimistic as they may claimed to be, Vietnamese consumers proved practical when it came to real purchases.
During the last quarter, 47 percent of urban families significantly cut their FMCG spend.
GDP growth accelerated in the third quarter by 6.2 percent over the same period last year, as the rise in exports helped offset weak domestic demand.
However, this early sign of improvement wasn't strong enough to leverage the whole economy as many businesses continue to face difficulties, inventory levels remain high, the economy's capacity to absorb investment remains low and domestic demand remains weak, the report found.
Even if signs of growth begin to appear soon, it may take time before macro improvements translate into a positive consumer response.