HCM CITY: Fast-Moving Consumer Goods (FMCG) growth in six key cities in Viet Nam – Ha Noi, HCM, Hai Phong, Can Tho, Nha Trang and Da Nang – gained momentum in the third quarter with 4.5 per cent growth compared to 0.9 per cent in the second quarter.
This was due to an increase of 3.6 per cent volume growth, according to the quarterly Market Pulse report released by Nielsen, a global performance measurement company.
“Although the FMCG growth in Q3 shows recovery, the signs reflect the volatility of Viet Nam, which places a lot of challenges for manufacturers to make sound decisions to fully seize market growth opportunities and drive a profitable business,” said Nguyen Huong Quynh, executive director of Retail Measurement Services.
Quynh said that FMCG growth across Asia Pacific has run consistently around 5 per cent each quarter during the past two years. “The FMCG growth in Viet Nam has not yet reached 5 per cent in any quarter of the past two years,” she added.
“Asia-Pacific FMCG growth has mainly been driven more and more by volume increases while price increases have slowed down. Similarly, price increases have slowed down in Viet Nam, but it’s still not compensated for entirely by volume growth.”
The Market Pulse Report was based on the results of the Nielsen Retail Measurement study of FMCG in major categories. FMCG in Viet Nam includes seven super categories – beverage (including beer), food, milk base, household care, personal care, cigarettes and baby care. Only beverage shows consistent long-term and short-term growth, according to the report.
Beverages continued to be the biggest contribution to total FMCG growth (38 per cent) in the third quarter, and peaked with 9.9 per cent growth, mainly led by a volume increase of 7.3 per cent.
Other super categories all showed stagnancy.”The sustainable growth of beverages was due to three trends that stand out among many others,” including health, convenience and innovation, Quynh said.
According to Nielsen’s report, health factors have become an important influencer of purchasing decisions, which was highlighted by 51 per cent of Vietnamese giving priority to nutrition-fortified products, 39 per cent preferring products with natural ingredients and 32 per cent paying attention with low fat, low sugar and low calories. When it comes to the trend of convenience, it stands out when looking at in-category package trends.
This category is seeing big packages growing faster, which has the potential to lead to uneven growth. When using bigger packages, consumers do not need to go to the store often and do not have to worry about running out, which makes for slower future growth of these categories.
The Nielsen study also revealed that the trend of innovation requires a great deal of efforts to identify what manufacturers have to invest in to expand their categories rather than just provide something new for a new stage. This is the key factor for making a breakthrough innovation to ensure long-term sustainable growth.
