Vietnam’s rural areas continue potential land for FMCG manufacturers

The  report from the global  performance measurement company showed while  urban has  gained  4.7 percent  growth  this  quarter  compared  to  one  year  ago,  rural  has  shown  a stronger  growth,  up  to  7.6 percent,  mainly  led  by  7.4 percent volume  growth  and  contributed  54 percent into  the  total FMCG sale.
“On  the  heels  of  improving  consumer  confidence  in  the  recent  quarter,  Vietnam’s  GDP  grew  6.9 percent in the  first  nine  months  of  the  year.  This  momentum  was  enhanced  by  consumers'  optimistic perception  of  personal  finance  along  with  their  willingness  to  spend,” Nguyen  Anh Dzung, Director, Retail Measurement Services, Nielsen Vietnam, said.
“Despite the rise in GDP this year, Vietnam’s FMCG market has fluctuated over the past two years. The volatility which is reflected in  super  categories  puts  a  lot  of  challenges  for  the  manufacturers  to  make  sound  decisions  to  fully seize  the  market  growth  opportunities  and  drive  a  profitable  business.”

Fast moving consumer goods market in rural area has shown a strong growth of 7.6 percent.

According to Dzung, rural area of Vietnam, however, remains a high-potential opportunity for many manufacturers. And in rural, traditional  trade  channel,  a  complex  and  highly  competitive  channel,  is  still  where  most  of  the sales are taking place. Getting products to each and every retailer in rural to expand the distribution to  drive  more  sales  has  long  thought  be  to  a  challenging  game  for  manufacturers. 
“Therefore, stores segmentation or “where to focus” is what businesses are suggested to going after whenever thinking of expanding to this new potential market. As the rural Vietnamese community continues to evolve, transform and  takes  centre  stage  as  a  key  group  for  businesses,  understanding  who  they  really  are, where,  how  and  what  they  are  buying  and  their  most  effective  touch  points  will  be  prerequisites  for future success,” added Dzung.
According to the report, the  nationwide  growth  of  FMCG  in  the  third  quarter  of  the  year  bounced back,  after  taking  a  dip  in  the  previous  quarter. This quarter, the nationwide FMCG reached 6.4 percent versus one year ago, mainly comes from an increase of 5.8 percent volume growth.
When looking deeper into six super FMCG categories nationwide of beverage, food, milk base, household care, personal care and cigarette, the report found that beverage enjoyed a hefty increase, at 8.5 percent, led by an increase of 6.4 percent in volume. Cigarette also showed positive growth in this quarter, at 5.9 percent.
On the other hand, according to the report, other super categories showed stagnancy. For example, the food sector expanded a mere 4.6 percent in quarter three from the second quarter with 5.9 percent. Milk and dairy products had the same fate with growth of 4.2 percent, down from 7.4 percent in the previous quarter.
Market  Pulse  Report  is  based  on  the  results  of  Nielsen  Retail  Measurement  study  of  FMCG,  on  the major  categories.  The  Nielsen  Retail  Measurement  provides  continuous  tracking  of  product movement  through  defined  retail  outlets. The data are used to measure manufacturer and retailer effort as well as consumer off-take.