Kantar Worldpanel - www.kantarworldpanel.com

FMCG Vietnam: Urban families remain cautious in spending

07/08/2014

Kantar Worldpanel, the global market leader in consumer panels, reported a continued slow-down pattern in FMCG consumption among urban families with a modest growth of 5% in value and 2% in volume. Meanwhile, FMCG in rural is losing its momentum the market is experiencing a soft drop in both value growth (11.5% vs. 12.5% in previous quarter) and volume growth (7.8% vs. 10.1% in previous quarter).

In terms of basket trends, growth is quite stagnant across different sectors in urban. Noticeably, dairy reports no increase in terms of volume. In rural, packaged foods and dairy are lagging behind with modest growth. A heavier consumption pattern helps oyster sauce achieve 38% increase in total volume consumption in Urban. Meanwhile, in rural, shower gel lifts up by 39% in volume by expanding its reach to additionally 744,000 new rural households and increasing average volume consumption by 16%.

All key channels remain stagnant while wet market is shrinking over the past quarter in Urban. In rural, traditional street shops continue to hold on to their leading role among retail channels, capturing 74% of all FMCG expenditure. Contrary to the share decline trend of wet markets (from 23% in 2012 down to 20% in 2014), street shops are expanding its reach among rural families, especially in northern areas.

Although the country sees a strong positive trend in macro outlook over the latest quarter, these improvements are not enough to help defend the overall consumer’s sentiment. According to the Kantar Worldpanel’s Purchasing Konfidence index, despite higher Purchasing Capability, consumers have not yet gained back their Willingness to Buy. While Purchasing Konfidence reaches a high level of 19.3, indicating consumers are more optimistic about economic outlook as well as their financial situation, Willingness to Buy continues to plunge down to 4.5 points over the last quarter as consumers do not think it is the right time to make major purchase such as home appliances, furniture, etc. Meanwhile, they are also less willing to spend more on everyday grocery shopping. In turn, this attitudinal pattern is well-reflected in consumer’s real behavior. The Real Purchase index witnesses very slight improvement and remains low at 4.3 points as the majority of Urban households keep tight control on their FMCG budget.

In brief, although making some improvement compared with the end of 2013, Purchasing Konfidence is stabilizing at 8.1 points. “On a positive note, households are less stressed about the economy and their finances as last year. However, it takes time before their willingness can bounce back accordingly. Thus, taking advantages of warming-up signals from the economic outlook, manufacturers and retailers need to spend more efforts to trigger demands and accelerate growth in the coming months.” – commented David Anjoubault, General Manager of Kantar Worldpanel Vietnam.

Follow links on the right side of this page to download full reports and press releases in both English and Vietnamese.

Although the country sees a strong positive trend in macro outlook over the latest quarter, these improvements are not enough to help defend the overall consumerís sentiment.

Although the country sees a strong positive trend in macro outlook over the latest quarter, these improvements are not enough to help defend the overall consumerís sentiment.

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David Anjoubault

General Manager - Vietnam

 

+84 839 305 660

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Report in English Report in Vietnamese Press release in English Press release in Vietnamese

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