Consumer confidence in Vietnam has declined significantly in the first half of 2023 due to rising inflation, reduced exports and imports, salary cuts, and worries about unemployment. Only 27% of respondents reported an increase in spending, while 43% viewed the economic situation as worse. Big-ticket purchases of insurance, home renovations, and motorcycles showed the largest declines in intent. Many consumers are selling assets like land and houses due to inability to repay loans or need for other expenses. Retail shifts have benefited online shopping and supermarkets while wet markets, street vendors, and malls have suffered. The outlook for the rest of 2023 is continued weak consumer spending and conservative consumption behavior as the full effects of the economic slowdown impact households

1. 1
Prepared by:
Infocus Mekong Research June 16, 2023
IFM MID-YEAR CONSUMER CONFIDENCE INDEX 2023
Ralf Matthaes | Managing Director
Email: Ralf.matthaes@infocusmekong.com
Website: www.ifmresearch.com

2. 2
ECONOMIC SNAPSHOT
Jan – May 2022 vs 2023
Indices % Decline
GDP Growth 3.32% vs 6.2%
GDP Growth Rate Q.1 0.7%
Exports - 11.6%
Imports - 17.9%
FDI (28% growth, but mass reduction Previous pledged capital) - 7%
Foreign Real Estate Investment (FDI) - 61%
New Business Openings - 25%
Business closures +22.6%
65% of GDP (US $265 Billion) is driven by Domestic (Consumer) spend in Vietnam
3.3% is the Maximum Consumer growth estimated to year end

3. Mid-Year Consumer Confidence 2023
3

4. COVID EMPLOYMENT IMPACT
Base: 10,028
Jun. 2023 71% 27% 2%
Jan. 2023 86% 12% 2%
July 2022 83% 14% 3%
Feb. 2022 77% 19% 4%
Oct. 2021 58% 32% 10%
Jan. 2021 73% 20% 7%
FULL
TIME
JOB
WANTED
EMPLOYMENT IMPACT PRESENT IMPACT ON SALARY & JOB SECURITY
• Full-time employment has declined by 15% since January 2023
• Though Unemployment is still not heavily impacted, at present 27% of respondents have already had their salaries cut
• A further 54% are worried about having salaries reduced, while another 44% are worried about losing their employment
• 71% of Business owners / Executives plan to reduce their work force by more than 5%
Hours / salary cut 27%
Worried will lose job 44%
Worried salary will be cut 54%
BUSINESS OWNERS' SENTIMENT
Plan to reduce workforce by 5% Plus 71%
Have negative economic outlook 81%
Source: Private Sector Development Committee / VnExpress
Base: 9,560
4

5. VIEW OF VIETNAM’S ECONOMY – JAN 2020 – JUNE 2023
• Optimism in the economy has dropped significantly, with 43% of consumers seeing the economic situation as worse
• Though not quite at Covid levels, anticipate a further drop in optimism in Q3 and Q4, as the lag effect hits consumers
70%
5%
58%
12%
27%
46%
40%
27%
22%
19%
27%
24%
42%
36%
33%
30%
8%
76%
15%
64%
31%
18%
27%
43%
2020 Jan
2020 Jul
2021 Jan
2021 Jul
2022 Jan
2022 Jul
2023 Jan
2023 June
Better Same Worse
Jan. 2020 vs June 2023 VIEW OF THE ECONOMY
Base: 10,136
5

6. IFM CONSUMER CONFIDENCE INDEX JUNE 2023
Base:16,194
2020 - 2023 CONSUMER CONFIDENCE
Before COVID-19 COVID Wave 1
• Consumer confidence has dropped somewhat since Jan 2023, fueled by the Real estate bubble burst, reduced
exports, increased unemployment / reduced wages, and inflation. Expect a further drop in Q3
Index out of 110
2019 Jan 2020 July 2020 Jan 2021 July 2021 Jan 2022 July 2022 Jan 2023 Jun 2023
Index: The index is based on 11 spend
categories in terms of consumer
spending “more – same – less” than
previous Period.
(More + Same Minus Less) of 11
Categories average)
Divide by 11 sectors = Consumer
Confidence Index score
92
84
27
60
12
51
63
57
54
COVID Wave 2 Post COVID-19
6

7. Base: 11,156
TOP FEARS - 2021 – 2023
• Inflation and Vietnam economic slow down are key concerns
• New to the list are: Global economic slowdown and increased interest / lending rates
• Covid fears have mostly disappeared
39%
45%
30%
39%
46%
45%
44%
48%
36%
42%
45%
39%
50%
34%
42%
41%
16%
3%
36%
60% 57%
Jan. 21 21-Jul Jan. 22 Jan. 23 Jun. 23
Global economic down turn Environmental pollution Vietnam economic slow down
Unemployment Increased inflation
Inflation
Unemployment
VN Eco. slow down
Pollution
Global Eco. downturn
Increases Interest
/ Lending rates
25%
7

8. 54%
41%
35% 38% 39%
2019 `July 21 22-Jul Jan-23 23-Jun
LOANS TAKEN OUT IN PAST 12 MONTHS
Base: 12,136
LOANS / LENDING AND DEBT
• Over 1/3rd have taken out loan in 2023,
mostly from VN Banks and Friends
• 57% of all loans are for immediate survival
and paying off debt, an increase of 7% since
January this year
47%
54%
31%
11%
47%
29%
17%
3%
62%
39%
30%
6%
VN banks Friends/ Family Consumer Fin. Co Foreign banks
SOURCES OF LOAN
June 2023
2022
2019
41%
37%
28%
22%
16%
11%
8%
34% 35% 36%
26%
22%
11% 10%
33%
37%
25%
24%
17%
9% 7%
My
immediate
survival
Personal Business Real Estate to pay back
Loans / Debts
Education Automobile
PURPOSE OF LOANS
2023 2022 2021
8

9. LOAN PAYMENTS AND KEY CONCERNS
Base: 394
72%
18%
10%
Loan Payment status
Paying back capital & interest
Paying back only interest
Having difficulty paying back both Capital & interest
42% 31% 19% 8%
Interest Rate of Loans
0-5% 6-10% 11-15% 16% Plus
29% 29%
15% 14%
7% 7%
My kids
education
Saving more
money
Career
advancement
Paying off
debt
Finding a new
job
High inflation
• 72% are able to pay off their loans. Ironically, 27% have Interest rates over 11%
• Outside of health and earning more money - Kids education, saving Money, and paying off debts are causing
consumers sleepless nights
Main Consumer Focus for next 12 months
9

10. Purchase Behavior
10

11. 9%
9%
14%
19%
25%
23%
15%
17%
42%
36%
34%
48%
40%
36%
34%
30%
29%
20%
21%
28%
19%
18%
Household utilities
Education
Food & beverages products
Health care products/services
Transportation
Personal care products
Communications
House hold care products
Entertainment & dining out
Personal electronics
Home appliances
Less Same More
ESTIMATED CONSUMPTION GROWTH BY CATEGORY JUNE 2023
June Growth
% vs 2022
Base: 1,026
• Government utilities will benefit the most over the rest of the year, followed by Education, F&B, and Healthcare
• Entertainment & Dining Out, Personal electronics and Home Appliances will suffer
39%
31%
22%
15%
5%
5%
5%
4%
-14%
-17%
-18%
11

12. SPEND INCREASE BASED ON CONSUMPTION VS INFLATION
Industry Growth Increase consumption Increase in cost / inflation Actual growth
Household utilities 39% 19 81 7.4%
Education 31% 66 34 27.5%
Food & beverages products 22% 38 62 8.4%
Health care products/services 15% 57 43 8.5%
Transportation 5% 50 50 2.5%
Personal care products 5% 58 42 2.9%
Communications 5% 56 44 2.8%
Household care products 4% 19 81 0.76
Entertainment & dining out -14% 45 55
No Growth
Personal electronics -17% 68 42
Home appliances -18% 45 55
• Once inflation is taken out of the equation, actual consumption growth ranges between 27% & 0% across sectors
• Consumption increase = 47%, driven by Education, vs 53% of consumption increase due to inflation
▪ Actual total growth minus inflation and education spend = 3.3% a drop of 2.1%since January
Base: 1,026
12

13. NECESSITY VS DISCRETIONARY SPEND
• Necessity spending reached 66% of total spend, an 8% increase since 2021
• 48% od the entire basket is spent on groceries, utilities, education and debt pay off and 12% on savings, leaving
only 38% for all other spend… ‘
58 60 66
42 40 34
Q3_2021 Q3_2022 Q3 2023
NECESSITY SPEND DISCRETIONARY SPEND
Base: 1,026
13

14. AVERAGE MONTHLY SPEND ACROSS CATEGORIES
• GROCERIES (10%) and EDUCATION (10%) and paying off Debt comprise almost half of all spend – Online spend has the
highest growth contributions of total basket size, as consumers look to save money. Education seems to be impervious to
recession impact
12%
10%
10%
10%
6%
8%
7%
8%
8%
7%
3%
6%
6%
6%
5%
4%
Q3 2023 VS. Q2 2023 SPLIT OF NECESSITY SPENDS
Base: 1,026
Q2
2023
Q2
2022
Groceries Education Debts Give to
family/ Wife
Healthcare Online
spend
Utilities
/ Comms
Transport
14

15. 13%
12%
8%
7%
7%
6%
6%
4%
4%
3%
3%
2%
DISCRETIONARY SPEND ACROSS CATEGORIES
• Discretionary spending has dropped to 34% of total spend, with savings making up more than 1/3rd of total
Q3 2023 VS. Q2 2023 SPLIT OF DISCRETIONARY SPENDS
Base: 1,026
Q2
2023
Q2
2022
Savings / Investments Eating / Drinking
out
Fashion Entertainment Fitness Online
subscription
15

16. METATREND = a change that changes change
16

17. 4% 4% 4% 1%
1. CONSUMPTION GROWTH - IMPACT ON BIG TICKET PURCHASE ITEMS
Base: 3,071 What did you Purchase in 2020 and what will you purchase in 2021?
• Big Ticket items (50Million VND Plus) that show growth from a small base are; Domestic holiday, New Cars, New
Businesses and Overseas education
• Overseas Holidays dropped from growth to negative growth since last year
GROWTH PURCHASE INTEND (2022 vs June 2023)
Growth %
33
7
12
2
37
11
15
3
Domestic Holiday New car A new Business Overseas education
2022
2023
17

18. 1. CONSUMPTION DECLINE - IMPACT ON BIG TICKET PURCHASE ITEMS
• Insurance has seen the largest decline in terms of purchase Intent followed by Home renovation and Motorcycle
Base: 3,071
-15% -11% - 9% -8% -7% - 4% -3% -2%
Growth %
39 38
27
23
16
21
16
10
24
27
18
16
8
17
13
8
Insurance
(Life/Health)
Home renovations Motorcycle electronics 20 M
VND +
Overseas Holoiday Invest in stock
market
Jnvest in funds Used car
ITEMS IN DECLINE
2022
2023
18

19. 17%
10%
7%
34%
8%
5%
18%
31%
13%
7%
21%
41%
10%
6%
16%
32%
House Apartment Land Total
LAND GRAB BOOM
2020 2022 Jan-23 Jun-23
• Even though the Real estate market is in the dumps, Consumers are still keen to buy, but in the last 6 months
appetites have dropped by 9% to a max of 32% still in the market, with Apartments seeing the biggest negative
impact
2. LAND GRAB PURCHASE INTENT
Base: 3,071
Growth %
19

20. 3. SELLING OFF ASSETS & Why?
Base: 1,026
• 66% of respondents do not have intent to sell off any assets
• 34% do, of which Land (21%) and Houses (11%) we key assets to be sold
21% LAND 9% HOUSE 5% APARTMENT 5% CAR
Why Sell?
Cannot pay back loan 10% 15% 13% 8%
Need money for other expenses 31% 22% 20% 36%
Buy something cheaper 16% 22% 24% 13%
Buy something better 42% 41% 41% 44%
35-% - 40%
Are selling assets as
they cannot afford
their loans or require
money for Other
expenses
20

21. Online platforms Wet markets Ma & Pa stores Super/Hyper
markets
Convenience
stores
Street Vendors Shopping Mall
4. RETAIL LANDSCAPE SHIFTS
• Big Winners: Online shopping and Supermarkets will remain the most frequented shopping venues in 2023
• However, Growth will decline as cheaper traditional formats such as Wet Markets, and Ma & Pa storess take more
share. Street Vendors and shopping malls will suffer substantially
Base: 1,026
32%
19% 21%
34%
21%
-9%
-28%
19%
6% 5%
13%
7%
-35%
-4%
23%
8% 7%
1% 0%
-36%
-25%
2022 23-Jan 23-Jun
21

22. 4. RETAIL LANDSCAPE SHIFTS BY INCOME
38%
48%
38%
35%
25%
17%
Modern Trade
Online shopping
platforms
Super / Hypermarkets
Traditional Trade
Provisions stores
Wet markets
25%
21%
62%
60%
13%
19%
20%
27%
54%
53%
27%
20%
29%
23%
59%
56%
13%
21%
Above 20 M
Below 20 M
Above 20 M
Below 20 M
Above 20 M
Below 20 M
Above 20 M
Below 20 M
• All Income groups will be shopping more online, while Traditional trade channels will be more supported by Lower
income and Modern trade by Higher income earners
22

23. 23

24. Negatives Positives
Unemployment will see a substantial increase / at
least for salary Reduction
A Cheaper, more hungry labor force availability
Overall spend will drop and Inflation will continue to
rise - Max Growth = 3.3% to year end
Opportunity for value for money and consumer emotional
support campaigns
Real Estate sales will continue to decline by roughly
9% through years end
Cost of real estate will continue to drop - Opportune time
to buy
Many distressed assets available as most companies
can only survive – 6 to 9 Months in present state
Ideal time for M&A’s
Retailing shifting slightly to more traditional channels
and online growth
Opportunities for value for money retailing and online,
specifically for foods stuffs
Most Big-Ticket Spend items are in decline, with
Insurance seeing the biggest drop
Domestic travel, automotive & new business are actual
growth opportunities
Education continues to grow in terms of total budget
allocation
Great opportunity for investment in affordable & Online
EDUCATION
Businesses have felt the recession since Q4. 2022, while consumers will feel the impact in Q.3, 2023
2023 yearend will be a continued DECLINE IN OVERALL SPEND & CONSERVATIVE CONSUMPTION.
24

25. SAMPLE PLAN June 2023
SEC Household Income bands Total
A 30,000,000 VND and more 18%
B 20,000,001 - 30,000,000 VND 33%
C 15,000,001 - 20,000,000 VND 20%
D 10,000,001 - 15,000,000 VND 16%
E Below 10,000,000 VND 13%
METHODOLOGY
• IFM consumer confidence Index, has been ongoing since 2012. For this report, the sample utilized ranges
between 16,000 to 1,026 respondents nation-wide and was conducted 4 times in 2020 and 3 times in 2021
and twice in 2022 and Jan 2023
• Quantitative – Self-completion by end consumers
• Using IFM Mobile Panel via smartphones data collection
Sample error is 3-4% based
on sample size per wave at
95% confidence level
Age %
18-24 16%
25-34 39%
35-44 34%
45 Plus 10%
Location %
HCMC / Hanoi 40%
2nd tier - cities 22%
Rural / sub-Urban South 14%
Rural / Sub-Urban Central 10%
Rural / Sub-urban North 14%
Total 1,026
N = 1,026
Gender %
Male 49%
Female 51%
Date Sample
18-Dec 3,567
19-Dec 2,964
20-Mar 502
20-May 1,023
20-Jul 1,019
20-Dec 1,026
21-Jun 1,010
21-Oct 1,009
22-Feb 1,026
22-Jul 1,022
Jan-23 1,017
Jun-23 1,026
Total 16,210
25

26. 26
Ralf Matthaes | Managing Director
Email: Ralf.matthaes@infocusmekong.com
Website: www.ifmresearch.com
IFM, the future of Research in Vietnam