The report pointed out that the FMCG market showed improvement in four large cities of Ho Chi Minh, Ha Noi, Da Nang and Can Tho and in rural areas in the fourth quarter of last year.For all of 2017, the urban market strengthened its performance while the rural market picked up but is not stable just yet.
The FMCG contributed significantly to Vietnam’s US$130 billion retail market last year
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The growth of facial moisturizers was largely attributed to more consumers starting to focus on beauty care in rural areas.
The snack market is now the main source of growth for packaged foods in both urban and rural markets. More innovations and the increase in convenient indulgence in food consumption are driving the growth of snack foods. Brands can leverage this trend by creating and capturing additional snacking occasions.
According to the report, in the short term, the beverage sector remains the growth driver of the urban market. Personal care continues developing very well in both urban and rural markets as consumers increasingly adopt a diverse repertoire of products.
Regarding the retail landscape, wet markets continue to lose share to other channels while minimarket/convenience stores accelerate their expansion in urban key cities.
Modern trade increased 15% in the last quarter, outpacing traditional channels. 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.
2018 performance could be brighter with an estimated expansion of 6.7%. 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, the report said.
The results of Nielsen’s Market Pulse research also showed that FMCG grew by 5% in the second quarter of 2017 in Vietnam, and 5.8% in the third quarter. This figure was estimated at 6-7% in the fourth quarter. Additionally, an increasing number of super markets and grocery stores are spurring the growth of the FMCG segment in the country.
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 sector.
