The first half of 2011 brought a decline in Vietnam's consumer confidence levels, according to the latest Nielsen survey.
Vietnam's economy was virtually untouched by the global economic downturn and consumer confidence generally remained among the highest of the 55 countries monitored by Nielsen.
"The first half of 2011 tells a different story, however," the company said.
Facing inflation and price increases, half of the surveyed consumers said they would do without some non-essential goods up from 41 percent in the second half of 2010 while 41 percent said they would be trading down to less expensive products. Nielsen said confectionery, health and beauty products and beverages were deemed to be the categories most likely to be affected by changing consumer purchase patterns.
Among the senior business leaders who participated in Nielsen's Vietnam Business Barometer survey, nearly two-thirds said that business conditions were worse now than they were a year ago.
"Only one-third think that conditions will improve over the next twelve months, with the majority thinking that the status quo will prevail," the company said.
Nielsen noted that inflation and recent dong devaluations remained the top concern among these executives. However, despite their concerns, 90 percent of business leaders still expect to see double-digit growth in their businesses.
"GDP growth in Vietnam is set to slow this year, and macroeconomic challenges facing the country require business leaders to work even harder to achieve success, said Darin Williams, Managing Director, Nielsen Vietnam.
Understanding consumer price sensitivity is critical, he said.