Econ
Fast moving consumer goods gain higher growth in rural areas
The rural regions continued to be a new source of growth for producers of fast moving consumer goods (FMCG) last year as its growth rate was higher than that in urban areas, according to a report from Nielsen Vietnam.
Under the Nielsen Quarterly Market Pulse report released recently, the increase of Vietnam’s FMCG industry in rural areas was reported at 6.1 percent annually, while the urban FMCG growth rate was flat at 4 percent annually.
Nguyen Anh Dung, Executive Director, Retail Measurement Services at Nielsen Vietnam, said that the rural regions continue to be a new source of growth for producers. The expansion of business to rural areas in Vietnam brings with it the same challenge that is faced by Asian countries - a high cost to serve geographically dispersed districts, he said.
According to the report, the performance of Vietnam’s FMCG industry, measured through traditional trade channels, rose by 5.4 percent last year, higher than the 4.9 percent increase level recorded in 2016.
However, the growth in the fourth quarter of last year slowed down significantly to just 0.5 percent against 6.4 percent in the third quarter.
The report shows that the slowdown 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 percent.
Dung said that the circulation of products in the super FMCG categories, through traditional trade channels and outlets in both urban and rural areas, slumped dramatically in Q4 2017, due to the heavy toll on people and assets caused by the continuous typhoons in several regions in Vietnam, especially in rural areas.
Another reason for the low growth in Q4 was the late timing of the Lunar New Year (Tet) 2018, which fell in mid-February compared to early January as in the previous Tet, he said.
Kantar Worldpanel last month also forecast that Vietnam’s FMCG market this year will continue rising by 6-7 percent against last year.
The retail market is expected to heat up further for 2018 with new entrants and new retail models. In rural markets, medium-sized street shops continue to win shopping occasions.
Vietnam’s economy surpassed 2017’s GDP target, posting the highest growth rate since 2011. Key economic indicators show good achievements, such as import/export, FDI, retail sales and others.
This year’s performance could be brighter with an estimated expansion of 6.7 percent. However, in the middle and long terms, there are still some challenges (low labor productivity and environmental issues) that need to be foreseen and overcome to reach sustainable economic development, according to the Kantar Worldpanel’s report.
In 2017, the market saw heated competition between supermarket and mini mart chains, with the 1,000 stores of Vinmart and Vinmart+ (VinGroup), 259 stores of Circle K, 11 stores of 7-Eleven in Ho Chi Minh City were duking it out for supremacy.
According to the General Statistics Office, in 2017, the total retail market hit US$130 billion, up 10.9% on-year, including the large contribution of the FMCG industry.
Vietnam’s FMCG industry in rural areas rose by 6.1 percent last year
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According to the report, the performance of Vietnam’s FMCG industry, measured through traditional trade channels, rose by 5.4 percent last year, higher than the 4.9 percent increase level recorded in 2016.
However, the growth in the fourth quarter of last year slowed down significantly to just 0.5 percent against 6.4 percent in the third quarter.
The report shows that the slowdown 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 percent.
Dung said that the circulation of products in the super FMCG categories, through traditional trade channels and outlets in both urban and rural areas, slumped dramatically in Q4 2017, due to the heavy toll on people and assets caused by the continuous typhoons in several regions in Vietnam, especially in rural areas.
Another reason for the low growth in Q4 was the late timing of the Lunar New Year (Tet) 2018, which fell in mid-February compared to early January as in the previous Tet, he said.
Kantar Worldpanel last month also forecast that Vietnam’s FMCG market this year will continue rising by 6-7 percent against last year.
The retail market is expected to heat up further for 2018 with new entrants and new retail models. In rural markets, medium-sized street shops continue to win shopping occasions.
Vietnam’s economy surpassed 2017’s GDP target, posting the highest growth rate since 2011. Key economic indicators show good achievements, such as import/export, FDI, retail sales and others.
This year’s performance could be brighter with an estimated expansion of 6.7 percent. However, in the middle and long terms, there are still some challenges (low labor productivity and environmental issues) that need to be foreseen and overcome to reach sustainable economic development, according to the Kantar Worldpanel’s report.
In 2017, the market saw heated competition between supermarket and mini mart chains, with the 1,000 stores of Vinmart and Vinmart+ (VinGroup), 259 stores of Circle K, 11 stores of 7-Eleven in Ho Chi Minh City were duking it out for supremacy.
According to the General Statistics Office, in 2017, the total retail market hit US$130 billion, up 10.9% on-year, including the large contribution of the FMCG industry.
