Boosting economic growth from domestic consumption

Domestic consumption is one of the three pillars of economic growth that will reach the finish line in 2023. Therefore, many solutions have been proposed so that this market continues to bring growth opportunities in the new year.

Domestic consumption is expected to be the main contributor to economic growth in 2024.

As the Lunar New Year “consumption season” is approaching, businesses are ready to get involved. Ms. Tran Thi Phuong Lan, Acting Director of the Hanoi Department of Industry and Trade, said that since the beginning of December 2023, many manufacturing, distribution and retail businesses have launched Vietnamese products, goods and Tet gift baskets with many eye-catching designs and diverse prices, starting the Tet shopping season earlier.

A representative of MM Mega Market (Vietnam) said that the company has increased its total inventory by 20-30%, and is working with suppliers to balance the supply of goods, bringing consumers quality products at the most stable prices; at the same time, implementing a series of promotional programs, applying a discount of 10-30% throughout the end of the year until Tet to stimulate shopping, contributing to market recovery after economic fluctuations in 2023.

During this “shopping season”, Vietnamese businesses have also grasped the needs and tastes of Vietnamese consumers, thereby focusing on promotion, brand building, designing models, packaging, and packaging suitable to the needs of each target group; at the same time, there are plans to bring goods to users in the most convenient way, at the most preferential prices, and with the best quality.

In the market, the psychology of shopping and consuming Vietnamese goods has had positive changes when consumers' purchasing power for products of domestic origin is increasing. Ms. Cao Thi Mien (Cau Giay District, Hanoi) said that she and her family are using goods from many brands of Vietnamese origin because the quality of products and goods is increasingly high, meeting safety standards, diverse designs have met, and prices are suitable for the budget. Especially, during this Tet holiday, gifts made of Vietnamese goods and regional specialties are always more popular with her relatives and friends.

In fact, the potential to increase consumption of Vietnamese goods is still very open. According to recent statistics from the Steering Committee of the Campaign for Vietnamese People to Prioritize Using Vietnamese Goods, more than 90% of consumers themselves determined that when buying goods, they would prioritize using Vietnamese goods; 75% of consumers advise relatives and friends to buy Vietnamese goods... In addition, Vietnamese goods are dominating almost all distribution channels, with a rate of 80% to over 90% in modern distribution channels and 60% in traditional retail channels.

Meanwhile, consumption is a major growth driver. According to the General Statistics Office, in 2023, final consumption contributed 41.04% to the overall growth rate of the economy (up 5.05%), while asset accumulation contributed only 26.64% and the difference between exports and imports of goods and services contributed 32.32%.

With a growth target of 6-6.5% this year, while household spending is forecast to continue to increase strongly thanks to more than VND2 quadrillion being pumped into the economy, according to the State Bank, experts say the domestic market needs to be further boosted.

Discussing solutions to promote consumption to restore and increase economic growth, Dr. Do Thien Anh Tuan, lecturer of public policy at the Fulbright School of Public Policy and Management, said that stimulating domestic consumption must be associated with the campaign "Vietnamese people prioritize using Vietnamese goods", targeting domestic enterprises; it is necessary to strongly promote the reduction of corporate income tax and personal income tax; at the same time, it is necessary to develop the domestic distribution and consumption system. Vietnamese distributors themselves must also proactively protect their home market, because through that distribution system, Vietnamese goods can enter the market, even expand to neighboring markets.

To develop domestic trade, the representative of the Ministry of Industry and Trade said that it will promote the development of trade infrastructure in disadvantaged areas; develop e-commerce to effectively exploit the trend of digitalizing the economy. In particular, the Ministry will step up the fight against smuggling, trade fraud, origin fraud, unfair competition, etc.

Locally, relevant agencies also said they will support businesses in promoting domestic trade, finding distribution systems, expanding market share through programs to bring Vietnamese goods to rural areas, and trade fairs and exhibitions nationwide; promote the development of logistics services, and promote modern distribution models on e-commerce infrastructure.

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