Purchasing power surges during the Tet (Lunar New Year) holiday in Februray.— Photo danviet.vn

HA NOI (Biz Hub) — Although Viet Nam saw its consumer price index slip in February due to plunging oil prices, purchasing power surged during the Tet (Lunar New Year) holiday.

According to the General Statistics Office (GSO), total retail sales of goods and services in February touched VND276.2 trillion (US$12.97 billion), up 3.7 per cent from the previous month and 11.6 per cent against February 2014.

The private sector contributed more than 86 per cent, while the State sector and the foreign-invested sector contributed 10 per cent and 4 per cent, respectively.

GSO said as the Tet holiday fell in February, consumption demand rose with purchasing power for food and foodstuffs, which was up 8.9 per cent and for garments, which rose 3.6 per cent.

Goods retail sales totalled VND210.9 trillion ($9.9 billion), up 4.2 per cent against the month before and 12.6 per cent from the same period last year.

Revenue for accommodation and catering services totalled VND32.5 trillion ($1.52 billion), rising by 2.3 per cent over January and 17.7 per cent from a year ago.

During the first two months of this year, combined retail sales touched VND542.7 trillion ($25.4 billion), indicating an 11.4 per cent fillip over the same period last year. Excluding the price increases, total retail sales were up 6.2 per cent over the same period last year.

GSO expert Vu Manh Ha said that the improved purchasing power was thanks to falling CPI, which dropped by 0.25 per cent in the first two months of this year, in comparison with the 1.24 per cent rise in the same period last year.

Consumer optimism

A recent report by Epinion, a market research company, found improved optimism of consumers with two-thirds of the population saying that they was prepared to spend more for Tet in 2015 than in previous years, according to Jay Kumar Kamala from Epinion Viet Nam quoted by vietnamplus.vn.

Notably, consumer confidence was found to have improved strongly in many areas outside Ha Noi and HCM City, suggesting that companies could also earn profits from markets located outside the country's two major cities.

Epinion's survey also found that younger Vietnamese people, especially those in the 18 to 24 age group, spent more this Tet than people in any other age bracket. This resulted in a growing demand for luxury products ahead of the Tet holiday.

The younger population was also the driving force for growth in the country, Kamala pointed out, adding that shopping for fashion and technology products was an emerging trend, especially at a time when online shopping is becoming more and more popular. — VNS