While the world battled Covid 19, the Vietnamese government implemented various policies to keep the economy afloat. Vietnam is considered one of the world’s fastest-growing emerging markets in the past decade. Economic growth momentum was significantly moderated in 2020, due to the impact of the COVID-19 pandemic.
How Pandemic has affected the economy
Despite the pandemic’s severe impact on Vietnam’s economy, the country’s GDP growth rate remains one of the highest in Asia-Pacific, at 2.91% in 2020. Due to the severe impact of the fourth outbreak in 2021, Vietnam’s GDP grew at a slower rate than 2020 at 2.58%. Both output and new orders dropped at the fastest rates since the first outbreak of the pandemic in early 2020, while firms reduced employment and purchases accordingly.
The sectors affected more by the Pandemic
Over 20% of service sector workers were impacted. Manufacturing was seen as the most severe deteriorating sector, as business conditions dropped to 44.1 in June from 53.1 in May creating a sharp decline in business conditions for manufacturers.
Second, being the electronic sector of Vietnam proved to be a shock to the economy during the first half of 2020. As a result of the limited demand for electronic goods in the second quarter of 2020, the annual GDP growth declined but in May 2021 the new order for global electronics rose from a low of 34.7 in May 2020 to a high of 63.3 in May 2021.
The pandemic has affected 9.1 million Vietnamese aged 15 and above of the labor sector, With 7.5% of workers reporting to have been negatively affected by the pandemic, agro-forestry-fisheries was the least affected sector by the pandemic. Industry and the construction sector ranked second with 16.5 % of workers affected.
Rise in the E-commerce market
Vietnam’s E-commerce market has grown 18% since the start of the pandemic outbreak, with the market size reaching US$11.8 billion, around 5.5 % of total consumer goods and services sales in the country with the change in marketing strategies by connecting consumers through the internet and electronic devices. 44% of consumers made their first online payment during the pandemic making 82% of the consumers spending more online than previous years with the help of their smartphones.
Effect of a pandemic on the advertising industry
Successful plannings amidst covid would help boost economic growth for advertising to 6.8% in 2021-2025. Strategy revaluation is needed by brands to raise awareness, increase sales and build loyalty. The pandemic has affected the advertising industries in Vietnam and made marketers capable of shedding the light on digital platforms executing their business strategies. The grass-root events have become a life-changing priority for marketers to build awareness for their brands that have derived customer engagement and have turned their interest to medium-sized and small enterprises. Brands must think of other possible ways to encounter the shocks given by pandemic by running multiple campaigns, including values-based marketing that builds an association with consumer’s identities by developing different advertising strategies for the smooth flow to influence customers’ decision
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