The Hanoitimes - Vietnamese consumers are changing at a fast pace, according to a recent report by Nielsen Vietnam.
While sales of fast-moving consumer goods (FMCG) in some developed markets saw signs of softness, foresights remain key for manufacturers in their quests for growth, Nielsen Vietnam said in the report.
Manufacturers with global reach should focus on emerging markets, which have consistently performed two to four times better from a sales perspective than their developed market counterparts in recent history.
Vietnam, considered as "a gem in Southeast Asia" by Nielsen, is currently experiencing one of its fastest economic expansions in years. It continues to enjoy a high GDP growth rate, which rose to 6.8% in the second quarter of this year.
The country also boasts one of the largest consumer markets in Asia due to the fast-growing population and increasing household consumption expenditure. Indeed, since 2012, residents have also seen their household wages increase by almost 40%.
However, as Vietnamese consumers are changing at a fast pace, Nielsen addressed key trends for manufacturers to explore in Vietnam.
Firstly, smaller yet richer households drive the increasing need for convenience, thus, consumers spend more time and money at small format stores.
Secondly, consumers want premium. Evidently, 60% of FMCG categories are up-trading and premium perceptions are about more than price.
Thirdly, consumers are paying more attention on the quality of life. Consumers have strong desire for a better life, which is the reason why they spend more outside FMCG. So, basic necessities may have to compete with big ticket items for share of wallet.
Fourthly, health and wellness have been ranked top 3 concerns of Vietnamese in years. Consumers are changing their perception about healthy diet and they want more all-natural products.
Fifthly, consumers spend around three working days on the internet. By 2020, it is forecast that 55% of Vietnam population will have an access to the Internet.
Moreover, Vietnam's market structure is getting more and more diverse. Although traditional trade channel still dominates with 1.5 million retailer stores and contributes 83% of total FMCG sale in Vietnam annually, modern trade channel, especially small format stores, continues to increase rapidly. As of April 2018, the store growth reached 41.2% year-on-year.
Meanwhile, convenience shopping is on the rise, for which bricks & clicks is the current and future retail reality. For example, Nielsen recommended that offline retailers should use offline resources to operate e-commerce, including order online and pickup in store, while all stock saved in store and delivered from the nearest store.
On the contrary, e-retailers should explore the option of opening offline stores.