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ECONOMYTRADE - SERVICE

Fast moving consumer good sales drop in the first quarter of 2018

Updated at Sunday, 13 May 2018, 10:00
The Hanoitimes - The nationwide fast-moving consumer goods (FMCG) sales of traditional trade channel continued to experience a dip in the first quarter of 2018, dropping to 1%.
It was released recently under the Quarterly Market Pulse report of Nielsen Vietnam - a global measurement and data analytics company.
 
FMCG sales of modern trade in urban region continued to gain momentum.
FMCG sales of modern trade in urban region continued to gain momentum.
However, the report showed that while traditional trade slowed down in both urban and rural areas, FMCG sales of modern trade in urban region continued to gain momentum.
According to the report, the slowdown of nationwide FMCG sales of traditional trade was seen across six super FMCG categories, including beer, food, milk base, household care, personal care and cigarettes. Only beverage and cigarette showed a slight growth rate at 0.6%. Other categories such as personal care, homecare, food and milk base all showed a decline.
“The 2018 Tet (Lunar New Year) consumption level reached the similar level as 2017 which had been a historic peak. The consumer perception and behavior toward Tet holidays change was believed to be the biggest hypothesis leading to lower organic consumption growth,” said Nguyen Anh Dung, Executive Director, Retail Measurement Services, Nielsen Vietnam.
“Consumers might prefer having a simpler Tet by releasing household chores, simplifying social duties and focusing on having good moments with family. So, these factors could mean that white space opportunities still exist for FMCG manufacturers in order to stay relevant to consumers in the festive seasons.”
About the FMCG performance of modern trade channel in urban areas, the growth was reported to be higher than that in urban traditional trade channel. The modern-trade FMCG sales growth in urban region increased 10.7% year-on-year while the urban traditional-trade FMCG growth rate decreased to 2.6% on-year-year.
“Thanks to rapid growth in store expansion, modern trade has significant higher growth rate against traditional trade and we do expect to see more growth from this channel in 2018,” Dung said.
The number of convenience stores has nearly quadrupled since 2012. The number of health/beauty and modern drug stores also doubled in the past 2 years. More noticeably, mini-mart was the number 1 channel in store openings in 2016 and 2017.
“According to our observation, modern retailers will continue to expand and to invest in their stores to attract more shoppers. So, the future of these small-format modern stores looks very optimistic and the growth of this channel will continue and even accelerate in the future,” he said.
The performance of Vietnam’s FMCG industry, measured through traditional trade channels, rose by 5.4% last year, higher than the 4.9% increase level recorded in 2016. However, the growth in the fourth quarter of last year slowed down significantly to just 0.5% against 6.4% in the third quarter.
According to Nielsen, the slowdown in the four quarter of 2017 was witnessed across all the super FMCG categories, including food, milk, household care, and personal care. Only beverages enjoyed a significantly higher increase than the other groups, with a growth rate at 3.2%.
The circulation of products in the super FMCG categories, through traditional trade channels and outlets in both urban and rural areas, slumped dramatically in
the four quarter of 2017, due to the heavy toll on people and assets caused by the continuous typhoons in several regions in Vietnam, especially in rural areas. 
Market Pulse Report is based on the results of Nielsen Retail Measurement study of 31 FMCG categories. The Nielsen Retail Measurement provides continuous tracking of product movement through defined traditional trade outlets in both urban and rural areas. The data are used to measure manufacturer and retailer effort as well as consumer off-take. 
Anh Hong
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