Vietnam shows fastest growth since 2011
Vietnam’s economy saw another strong year with gross domestic product (GDP) posting the fastest growth rate since 2011, of 7.08%. Consumer price index (CPI) has been kept under control below +4% for 4 consecutive years. The achievement is also reflected by the high domestic demand of Vietnamese consumers with retail sales of consumer goods enjoying an increase of 12% in 2018. 2019 economic growth is forecasted to up 6.8%.
Key market highlights in full-year 2018 issues:
Though FMCG market is lagging in Urban 4 key cities, there is still growth in Rural areas where the market seems to get its momentum back and is expected to continue with 5-6% year-on-year growth in 2019.
In Urban 4 key cities, non-food sector recorded positive performance, while Dairy and Package Foods are still stagnant. A different picture in Rural with healthy growth across all sectors.
A stronger year for modern trade, up 19% in 2018. We are seeing modern channels such as minimarts, convenience stores and ecommerce evolving very fast, expanding their shopper base in Urban area. The development of modern trade is also boosted by the reinvention of big formats (hypermarket and supermarket) thanks to their efforts to better utilize the space available. In Rural, more and more shoppers have a tendency towards shopping in bigger street shops and exploring hypermarket and supermarket.
Spotlights of the Year
1. Booming online: People going online more frequently which drives the exponential development of ecommerce. Online shopping will continue to thrive in the coming years.
2. More complex beauty routine: Beauty care market delivers fast growth this year thanks to greater adoption for diversified and advanced skincare routine among Vietnamese consumers. With lots of innovation to excite consumers, the market is promising to develop further.
3. Enhance shopping experience: Shoppers now go to more channels to serve different shopping missions, especially the younger groups. They also seek for greater convenience and specialization in their path to purchase. As such, retailers are adapting to meet the needs of omni-shoppers by proactively stretching their retail portfolio as well as upgrading their retail formats.
4. Bubbling milk tea: Though Coffee remains the most popular drink for out-of-home consumption there are so many young people who are big fans of Milk Tea in Vietnam.
5. Challenging innovation: FMCG market is more innovative over time as manufacturers invest enormous amounts of resource on offering new products to consumers. However, it becomes more challenging to grab consumers’ attention in today’s market.
Urban 4 cities include Ho Chi Minh, Ha Noi, Da Nang and Can Tho.
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