The impact of covid 19 on the change of vietnamese consumer buying behaviour and implications for business

Faculty of Languages – International Cultures Course: ANH320DE02 – PROJECT PROJECT REPORT THE IMPACT OF COVID-19 ON THE CHANGE OF VIETNAMESE CONSUMER BUYING BEHAVIOUR AND IMPLICATIONS FOR BUSINESS Students’ Name: Vũ Thiên Hồng Code: 2196486 Lê Quốc Huy 2191523 Võ Bùi Trà My 2190077 Cổ Bảo Ngọc 2193756 Võ Hồng Kim Khánh 2190573 Nguyễn Thị Sông Lam 2198661 Submission date: Saturday, 09 July 2022 Faculty of Languages – International Cultures Course: ANH320DE02 – PROJECT PROJECT REPORT THE IMPACT OF COVID-19 ON THE CHANGE OF VIETNAMESE CONSUMER BUYING BEHAVIOUR AND IMPLICATIONS FOR BUSINESS Students’ Name: Vũ Thiên Hồng Code: 2196486 Lê Quốc Huy 2191523 Võ Bùi Trà My 2190077 Cổ Bảo Ngọc 2193756 Võ Hồng Kim Khánh 2190573 Nguyễn Thị Sông Lam 2198661 Submission date: Saturday, 09 July 2022 ABSTRACT The COVID-19 pandemic has impacted heavily on the economy of Vietnam, resulting the change in customer buying behaviours Hence, it is necessary to take research into changes so that the business could introduce implications for the business This research is aimed to find out the changes in buying behaviours, what causes they change, how they perform, to what extend they impact customers and in what way, and evaluate those ones All information in this research is hoped to contribute to the data base to serve businesses and understand customer buying behaviour after COVID-19, which would assist businesses to find practical solutions In this research, we review several articles related to the topic to create a literature review and conceptual framework Moreover, we send the questionnaires to collect data from various customers regardless of genders Our findings indicate that (a) the buying rate to online is slightly higher than that to offline and financial affairs are more considered post-pandemic; (b) health care products are still be priorities; (c) health care, foods, and electronics devices are preferred to buy in physical stores; and (d) customers is in the habit of shopping online, though the life has gotten back to normal Our findings provide essential information to businesses and indicate difficulties to providing services to customers Hence, businesses could review them and apply implications i TABLE OF FIGURES Figure 1: Sample of consumer buying behaviour participants 21 Figure 2: The shopping channels that consumers most commonly use 27 Figure 3: The two e-commerce platforms that consumers most frequently use 28 Figure 4: The most three important factors that make customers choose online shopping before the pandemic 29 Figure 5: Customers' shopping frequency .31 Figure 6: Categories of priority items of customer’s shopping .32 Figure 7: Categories of priority shopping methods 33 Figure 8: Online shopping rates after the pandemic 34 Figure 9: The reasons why customers still choose online shopping after the pandemic 35 ii TABLE OF CONTENTS ABSTRACT i TABLE OF FIGURES ii TABLE OF CONTENTS iii CHAPTER 1: INTRODUCTION CHAPTER 2: LITERATURE REVIEW 2.1 Consumer buying behaviour 2.1.1 Consumer behaviour .4 2.1.2 Buying behaviour .4 2.2 Types of consumer behaviour/buying .5 2.2.1 Habitual buying behaviour .5 2.2.2 Variety-seeking behaviour 2.2.3 Dissonance-reducing buying behaviour 2.2.4 Complex buying behaviour 2.3 Factors affecting consumer buying behaviour 10 2.3.1 Psychology 10 2.3.2 Authorities 11 2.3.3 Society 11 2.3.4 Personals 12 2.4 The impacts of COVID-19 14 2.5 The changes in consumer buying behaviour during COVID-19 17 2.5.1 Buying goods and using digital services 17 iii 2.5.2 New demand and product substitution behaviour 18 2.5.3 Shopping patterns 19 CHAPTER METHODOLOGY 20 3.1 Research questions 20 3.2 Data collection .22 3.3 Data analysis 23 3.4 Procedures .24 CHAPTER 4: FINDINGS AND DISCUSSION .27 4.1 How have Vietnamese changed in their purchasing behaviour during the COVID-19 pandemic during the years 2020 to 2021? 27 4.1.1 Consumers’ buying behaviour before the pandemic 27 4.1.2 Consumers’ behaviour during the pandemic 30 4.2 Do those changes of Vietnamese consumer behaviour during the pandemic still continue in post-COVID-19 period? .34 4.2.1 Consumers’ behaviour after the pandemic .34 CHAPTER 5: CONCLUSION AND RECOMMENDATIONS .38 5.1 Conclusion .38 5.2 The implication of business toward changes in buying behaviour .38 5.3 Limitations 39 5.4 Recommendations 40 REFFERENCE .42 iv CHAPTER 1: INTRODUCTION Due to the lethal nature and rapid spread, the acute pneumonia outbreak brought on by the coronavirus pandemic (SARS-CoV-2) that started in Wuhan City (Hubei Province, China) in early December 2019 has upended the lives of people all over the world Every part of economic life is impacted by COVID-19, which compels individuals to alter their perspectives, take more immediate and drastic action, adapt their behaviour, avoid meetings and huge groups, and enhance their methods for preventing epidemics The COVID-19 pandemic not only resulted in a health crisis but also an unprecedentedly severe economic and social crisis In Vietnam, the COVID-19 epidemic has experienced four outbreaks and so far has not ended Although Vietnam is considered one of the few countries to respond well to the epidemic, Vietnam's labour and employment market is also seriously affected Unemployment and underemployment during the COVID pandemic have led to the lives of workers, especially self-employed workers, with a lot of difficulties since there is no income or income is reduced From a social perspective, COVID-19 impacts increasing the poverty and near-poverty rates in terms of income and reducing the temporary incomes of households and workers Besides the impact related to health, economy, politics, society, consumer behaviour is also one of the issues affected by COVID-19 Financial pressures in households have reduced the level of discretionary spending by Vietnamese consumers One of the most striking changes in the behaviour of Vietnamese consumers is that they look for more affordable proposals to save the family budget Therefore, the goal of the research is to compare and evaluate the changes in customers' buying patterns before and after the pandemic In addition, it also discovers the new trend of customers buying products for businesses depending on customers’ buying in COVID-19 pandemic situation Moreover, this research aims to give a better understanding of the major issue potentially occurring during the pandemic and be well-prepared for future crisis management Furthermore, in order to establish suitable strategies for business operation in order to adapt to new buying behaviours, the following questions directly led the research: How have Vietnamese changed in purchasing behaviour during the COVID19 pandemic during the years 2020 to 2021? Do those changes of Vietnamese consumer behaviour during the pandemic still continue in post-COVID-19 period? Under the entire picture of COVID-19 pandemic, this study has several specific contributions to both the society and business field as a whole First of all, based on detailed theoretical analysis, an insightful understanding of the changes in consumer buying behaviour would be developed, and acts as a fundamental basis to predict potential shifts in shopping patterns if a similar crisis occurs in the future Secondly, these changes could still remain after the peak of COVID-19; hence, marketers or enterprises could take advantage of them as a powerful tool to implement modified business strategies and optimise their success As a final point, as this is the first study concentrating on the impact of COVID-19 on consumer buying behaviour and its implications for the Vietnam market, the findings of this study could tackle unexplored areas of this aspect and add certain values to the field To this end, the study will cover the changes in consumer shopping patterns during the time period ranging from March 2021 to October 2021 The scope of this study is restricted to analyse a sample of 120 customers whose age range is within 18-65 years old The structure of this paper is organised in the following order The literature review emphasises the theoretical background of consumer buying behaviour, and significant influences of COVID-19 leading to specific changes in consumer behaviour The next section is Methodology which describes the chosen sample of consumers and detailed methodology process of analysing the collected data The Findings part demonstrates the particular results and unexpected discoveries, which is considered as the foundation of potential implemented business strategies In the last section which is Conclusion and Implications, highlights of the entire study will be discussed in association with further suggestions on implications for some specific aspects relating to the business field CHAPTER 2: LITERATURE REVIEW 2.1 Consumer buying behaviour 2.1.1 Consumer behaviour Consumer behaviour is described by Walters (1974) as "the process by which consumers choose if, what, when, where, how, and from whom to make purchases of products and services." Another definition of consumer behaviour is given by Mowen (1993), who describes it as " the study of the buying units and the exchange processes involved in acquiring, consuming, and disposing of commodities, services, experiences, and ideas." This concept emphasises purchasing units in an effort to encompass both the individual and groups that make purchases of goods and services Consumer behaviour is described by Schiffman & Kanuk (1997) as "the behaviour that consumers demonstrate in searching for, buying, utilising, and discarding items, services, and ideas." Consumer behaviour is consequently the study of how people decide to spend their available resources (time, money, and effort) on consumptionrelated things, according to Schiffman & Kanuk's (1997) elaboration of the term It covers the examination of what, why, when, where, how frequently, and how people use the purchased goods Additionally, it includes all the behaviours that consumers exhibit when they look for, buy, use, evaluate, and discard goods and services that they anticipate will meet their requirements 2.1.2 Buying behaviour Buying behaviour includes when and where customers shop, what they buy, and how much they spend are all based on buying behaviour The actions taken when 4.2 Do those changes of Vietnamese consumer behaviour during the pandemic still continue in post-COVID-19 period? 4.2.1 Consumers’ behaviour after the pandemic Figure 8: Online shopping rates after the pandemic As indicated in figure 8, online shopping still remains the dominant customer buying habit in the post-COVID period as up to 97.5% of the respondents choose "yes" when being asked whether they still continue shopping online after the pandemic In fact, due to some remaining restrictions by the government and high risk of the pandemic, online shopping seems to be the best option guaranteeing convenience and safety Moreover, promotions are provided continuously on e-commerce channels with plenty of products offered in a variety of prices, classifications, as well as a rapid and safe payment process Nevertheless, the rest, 2,5% of those who choose "no", account for only a small number of customers because they still prefer to directly check or try on the items to make sure there are no problems with delivery, sizes, or quality Figure shows an insight on elements that make consumers prefer online shopping after the COVID-19 pandemic When it comes to online purchasing, time saving, 34 reasonable price, and being easy on making purchasing decisions are three factors that the respondents concern the most during the post-pandemic period, while they rank price competitive, quality and model as the top three factors urging them to buy online before the pandemic (figure 6) Figure 9: The reasons why customers still choose online shopping after the pandemic The survey's findings show that 80.6% of responses indicate time saving as their first choice, which illustrates that the time factor influences their decisions substantially Compared to in-store shopping, online shopping platforms are equipped with more useful functions aiming at optimising user experience, and consumers can save plenty of time when buying online Besides, there is a minor difference between the second and the third factor, 70% of the respondents are concerned about reasonable prices and 63,1% of the respondents choose that it is easy for them to make purchasing decisions The results indicate that consumers tend to show strong interest in the price of a product Thanks to a variety of promotions, online stores have offered consumers a more affordable price compared to offline shopping Furthermore, online items are classified into separate categories for different customer needs and they are also tailored based on buyers’ past transactions so that consumers can easily find appropriate products and make their buying decisions 35 Figure also reveals that payment and delivery methods are factors that they are less concerned about The method of payment may need to improve more to meet the customer needs since only 45% of the respondents choose it as the factor that affects their purchasing decision, while the shipping method is the factor that has the lowest rate with 31,9% This significantly suggests that the customers are recently not satisfied with the delivery process and it is not attractive enough for customers to choose online platforms rather than offline shopping In short, under the disastrous consequences of Covid-19, the study indicates three main changes in consumer shopping behaviour in both before and during the pandemic In fact, even though online shopping rate still remains high and dominate direct purchase rate, the result suggests that there is a slight reduce in online shopping frequency due to financial pressures caused by the pandemic Moreover, the choice of products is also changed when the whole society is struck by the outbreak of Coronavirus According to the result analysis, while clothing ranks first as the most frequently bought item by respondents in both pre and post - pandemic period, they prioritise foods and healthcare products during the epidemic season The last change revealed by this study is differences in selected shopping channel for specific product categories In fact, though a majority of respondents prefers online shopping to direct purchases at stores, offline buying is still chosen by most customers when it comes to shopping for foods, healthcare products or electronics Additionally, despite these significant changes in consumer purchasing behaviour, the study affirms that online channels still remain the most favoured shopping option selected by respondents, which once again proves the rapid growth and huge potential of e-commerce and online business Besides, the factors urging participants towards online shopping have also changed after the pandemic Indeed, while competitive prices, quality and models are the major elements that make them 36 choose e-commerce platforms for shopping before the epidemic season, after Covid19, they mostly prefer online shopping due to time saving, reasonable prices, and easy purchasing decisions Nevertheless, payment and refund policy are still the two factors that most respondents are not satisfied with and need further improvements in the future 37 CHAPTER 5: CONCLUSION AND RECOMMENDATIONS 5.1 Conclusion The research discerns that the Coronavirus pandemic has utterly affected consumer life activities and behaviours, as well as psychologically; several signs of panic appear to change consumer's decisions and perceptions These explanations are equivalent to previous research questions about whether Vietnamese have changed their behaviour during the pandemic and continue adjusting or have persisted in earlier shopping actions, only changing when faced with an unexpected situation Succeeding in findings clearly indicated that Vietnamese have changed their preference for products (specifically foods, clothes, and healthcare) and means of shopping to online platforms rather than offline marts because of its benefits and convenience during the epidemic While many people concentrated on finding food in large quantities to stock up for, the family demonstrated panic buying and herd mentality (Loxton, Truskett, et al 2020) On the other hand, the study of Naeem, and Muhammad (2020), focusing on the impulse buying behaviour during COVID19, revealed that increasing panic buying behaviour due to the social tendency of rising prices, health professionals' recommendations of safe distance, and buying more to reserve Consequently, after the epidemic's peak, they continued to adjust their demand and maintained online shopping; other product categories replaced their priority products 5.2 The implication of business toward changes in buying behaviour According to the study, the risk of COVID-19 has led more locals to spend more money online than they would otherwise Concerns about money, health, and 38 demographics all have an impact on these purchasing patterns Age, ethnicity, marital status, gender, and wealth are typical demographic factors that have a big impact on the people' purchasing choices COVID-19 epidemic in the past and an alteration in preventative activities are important contributing factors that influence how people choose to buy food when it comes to health worries Concerning worries about the future such as job loss, economic effect payments, difficulties paying bills, and the usage of cash all have a crucial impact on buying habits These findings support the fear appeal theory by demonstrating that people respond to the danger of COVID-19 with emotional reactions such as concern about their health and financial stability 5.3 Limitations As limitations of the study in consumers buying behaviour, conducting process and supportive analytical technology affected research writing that led to primary databases may have limited aspects The initiative implementation survey was based on two research questions to build useful questionnaires for accumulating accurate numbers; however, the research questions were general and hard to seek demonstrated information Because it did not get to far-reaching issues, there were limitations to participant quantity and individual career diversity The majority of respondents were students, and the scope for researching was narrow in Ho Chi Minh City only, with impossible nationwide implementation Moreover, the analysis used quantitative methods but did not use qualitative research (interview recording), which notably led to the results not being highly trustworthy - some uncertainty in respondents' behaviours Additionally, the tools of calculation formula for studying should be concerned; with employing a specific formula for the correct data revealability 39 5.4 Recommendations Following the COVID-19 pandemic, production and business enterprises generally need to have a thorough understanding of their target customers, how their consumption behaviour has changed since the pandemic, and how to make sure that their products, brands, and sales channels are consistent with that behaviour Indeed, during the epidemic period, customers were mainly concerned about health; however, after the epidemic, fashion became the dominant concern Therefore, businesses in the garment industry need to be able to have many products to meet the needs of customers It is clear that consumers' purchasing behaviours have experienced a significant change From careful product selection to innovative purchasing strategies, everything is based on a desire to safeguard their own health Furthermore, food manufacturers need to upgrade more than just their products in order to have a sustainable and long-term development after COVID-19; in conjunction with quality, design, packaging, and health factors should be at the top of the list Encourage healthy goods that satisfy customers' demands at the appropriate moment so that new enterprises won't be neglected by customers Businesses must develop a selling and payment strategy that is more appropriate to clients' expectations in addition to offering high-quality goods When customers tend to online shopping, businesses, particularly popular ecommerce sites like Shopee, Tiki, and Lazada, must immediately get their products online In particular, through the answers and contributions of the survey, businesses should focus more on customer care as a service during the purchase and after the purchase It can be said that the post-purchase experience is also an important part, which makes customers come back and continue to buy or not 40 In addition, retailers and distributors should have more promotions for loyal customers to create sympathy and customer satisfaction For instance, pricing adjustments might also be made to assist consumers who are struggling financially The policy of free shipping, fast delivery or all-day delivery is also one of the ways to help businesses serve and meet the increasing needs of customers 41 REFFERENCE Akter, S., Ashrafi, T., & Waligo, V (2021) Changes in Consumer Purchasing Behaviour Due to COVID- 19 Pandemic Journal of Marketing and Consumer Research, 77, 33-46 Bui, D., Dräger, L., Hayo, B., & Nghiem, G (2022) The effects of fiscal policy on households during the COVID-19 pandemic: Evidence from Thailand and Vietnam World Development, 153, 1-12 Butu, A., Brumă, I S., Tanasă, L., Rodino, S., Dinu Vasiliu, C., Doboș, S., & Butu, M (2020) The Impact of COVID-19 Crisis upon the Consumer Buying Behaviour of Fresh Vegetables Directly from Local Producers Case Study: The Quarantined Area of Suceava County, Romania International Journal of Environmental Research and Public Health, 17(15), 1-24 Chakraborty, I., & Maity, P (2020) COVID-19 outbreak: Migration, effects on society, global environment and prevention Science of The Total Environment, 728, 1-7 Cristiana, M (2009) The buying decision process and types of buying decision behaviour Sibiu Alma Mater University Journals, 2(4), 27–33 Donthu, N., & Gustafsson, A (2020) Effects of COVID-19 on business and research Journal of Business Research, 117, 284–289 Eger, L., Komárková, L., Egerová, D., & Mičík, M (2021) The effect of COVID19 on consumer shopping behaviour: Generational cohort perspective Journal of Retailing and Consumer Services, 61, 1-11 42 Eger, L., Komárková, L., Egerová, D., & Mičík, M (2021) The effect of COVID19 on consumer shopping behaviour: Generational cohort perspective Journal of Retailing and Consumer Services, 61, 102542 Islam, T., Pitafi, A H., Arya, V., Wang, Y., Akhtar, N., Mubarik, S., & Xiaobei, L (2021) Panic buying in the COVID-19 pandemic: A multi-country examination Journal of Retailing and Consumer Services, 59, 102357 Loxton, M., Truskett, R., Scarf, B., Sindone, L., Baldry, G., & Zhao, Y (2020) Consumer Behaviour during Crises: Preliminary Research on How Coronavirus Has Manifested Consumer Panic Buying, Herd Mentality, Changing Discretionary Spending and the Role of the Media in Influencing Behaviour Journal of Risk and Financial Management, 13(8), 166 MBA Skool Team (2021, September 2) Habitual Buying - 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