This year, due to lower than expected economic performance and consumer spending, the Tet holiday is not expected to ensure high profits for businesses like in previous years.
he Vietnamese Lunar New Year, or ‘Tet’, begins on the 10th of February this year, and is the biggest holiday in Vietnam. Due to its importance most students living in big cities, as well as migrant workers working in big cities, return home to their hometowns to celebrate this holiday with their family. As always, this will put a lot of pressure on the transportation system as demand for tickets is incredibly high.
Along with concerns over the transport system, there is even more concern than usual this year as to whether everybody will be even able to finance the trips to their hometown for the Tet holiday. There are various reports of migrant workers in Ho Chi Minh City who will not be able to go home this year, as they do not have the financial means to do so. Instead, these migrant workers will remain in the city in order to try and find more work.
One of the main causes of this is the nationwide lowering of the Tet bonus this year. Although there are reports of many economic elite receiving larger bonuses, the majority of employees have seen a decrease. These lower bonuses have led to various kinds of industrial action taking place around the country. For example, on the 9th of January, 2000 workers at a factory in Ho Chi Minh City went on strike, as their company announced that their bonuses would be cut by nearly half when compared to the previous year.
There are various reports of migrant workers in Ho Chi Minh City who will not be able to go home this year, as they do not have the financial means to do so
This has raised fears for businesses, as Tet is usually an extremely profitable time. In the months prior to Tet, businesses generally rush to try to increase supply, in order to maximize gains during the festive period. This is especially the case for confectionary companies. However, there has been a lot of speculation in the leading up to Tet this year over whether the increase in production in preparation for Tet is necessary. Consumer Price Index (CPI) data for Ho Chi Minh City point out that there has been lower consumption, with its CPI rising 9.58 per cent in 2010, 15.68 per cent in 2011, and only 3.8 per cent during the first 10 months of 2012.
This CPI data, in combination with lower Tet bonuses, has led to lower predicted sales by companies, especially in comparison to last year, leaving producers wary. However, a few months ago, Vietnam News reported that businesses and authorities had to ensure that supplies would meet demand for the celebrations, and that speculation should not lead to shortages. This has led to many food businesses increasing production for the festive season, regardless of fears over the actual effects of the relative slowing down of the economy in 2012.
by Margaux Schreurs
