Vietnam's online food shopping in surge

Vietnamese consumers continue to increase the purchase of food, the essential category via online channels amidst the outbreak of Covid-19, local insiders have said.

Local consumers are shopping at Hanoi's Vincom Center. Photo: Masan Group

The latest data from the first quarter of 2021 conducted by e-commerce aggregator iPrice Group showed that the demand for online groceries continues to increase, while the need for the other categories drops. 

According to the study, traffic of online grocery websites increased by 13% in Q1, 2021. The growth rate remained constant from the end of 2020 when the social distancing measures were loosened. 

“Covid-19 can be considered a powerful catalyst in increasing online demand for essential items,” the iPrice's report noted. 

The latest Asia Pulse #2 report released by the market research Kantar Vietnam also recorded the same result showing that the food sector continues to lead market growth in food-moving-consumption goods (FMCG) categories in Q1 this year. 

Value spend growth in food was 10.6% and 9.8% in urban four key cities (including Hanoi, Ho Chi Minh City, Cantho and Danang) and rural areas, respectively, in Q1, higher than that of the average growth of Asia and placing Vietnam among the leading Southeast Asian countries. 

Source: Kantar, Asia Pulse #2, June 2021

The results were due to the fact that the economy continued to recover during the first three months, the consumer confidence on the economic outlook is higher than previous quarters, gradually being back to pre-Covid-19 level. 

Kantar Vietnam found that FMCG growth slows down in both urban four key cities and rural areas, yet still growing at faster pace than pre-Covid-19 time. In short term, FMCG value in Q1 seems on par with that of the same period last year which was an all-time high driven by Covid-19 impact.

Nguyen Thi Nhu Ngoc, Senior Marketing Manager of Worldpanel Division, Kantar Vietnam, told Hanoitimes: “The online channel is increasing its share of retail value, outstripping more established channels in both urban and rural areas.”

During the period, the traditional channels such as street shops and wet markets have gradually lost its share, which happened long time ago because of the continued expansion of modern channels/ emerging channels such as minimarkets, online, specialty stores, she explained. 

“Consumers have more choices of shopping places and have a tendency to shop across channels for different shopping missions,” Ngoc added. 

Source: Worldpanel Division, Households Panel, May 2021

Last year, packaged foods were the most successful sector and is the main driver of the abnormal spike in the FMCG market throughout the year of stay-at-home economy, according to Fabrice Carrasco, Managing Director for Vietnam & the Philippines, and Asia Strategic Projects Director of Kantar Worldpanel.

According to Kantar’s research, one third of Vietnamese online consumers switched from traditional channels are new to online shopping in the FMCG industry, becoming the main contributors to the growth of the online channel in the whole year of 2020.

The online channel achieved an increase of 76% in terms of online transactions last year, which mainly came from new buyers leading the number of transactions in urban areas in Asia, outstripping the growth of South Korea and China, according to Kantar.

According to the e-commerce aggregator, even though the measures to stop Covid-19 fluctuates growth in several categories, it also gives online groceries a boost.