Vietnam: 85% of the population purchase FMCG under promotion
The latest Promotion report published today by Kantar Worldpanel Vietnam – the world leader in consumer knowledge and insights based on continuous consumer panels, reveals that averagely 85% of the Vietnamese population purchase FMCG (Fast Moving Consumer Goods) under promotion at least once per year.
Kantar Worldpanel Promotion findings are sourced from Kantar Worldpanel Household Panel research methodology on FMCG products purchase behaviours for in-home consumption in 2012, with the sample of 2,150 households representative for over 2 Millions urban households in the 4 key urban cities of Vietnam (HCM, Hanoi, Danang, Can Tho), with over 100 FMCG categories and 7000 brands in both traditional and modern trade.
Key highlights of the report include:
- “Gifted purchase” is the most chosen promotion type by consumers: “Gifted purchase” means that consumer buy a product and get another product from a different category for free (for example, buy 1 tube of toothpaste and get 1 bottle of mouth rinse). Three quarters of Vietnamese consumers pick this type of promotion among FMCG products at least once per year, and it takes up nearly 60% of total promotion value. “Buy 1 get 1 free” and “Price off” play the next positions, with 56% and 21% population attraction, respectively.
- Modern Trade offers more promotions and attracts consumers to spend more on promotion: 15% of FMCG product sales for in-home consumption are under promotion in Modern trade (including department stores, hypermarkets, supermarkets, minimarkets, convenience stores, etc), in comparison to only 2% in Traditional trade.
- One third of the population are heavy buyers of promotion, who dedicate averagely 10% basket value for promotional items in a year: Their profiles are skewed to Southern people in HCM & Cantho, young and middle-aged housewives under 40 years old, big sized families with 5+ members, from middle high and high income (2Mln VND per capita per month and above), and they tend to shop in Modern trade.
- Promotion helps add incremental sales to the brand during the campaign period, yet the impact on inducing new trials and improving brand loyalty after promotion period is limited: There is usually a leap in the sales thanks to promotions; for instance, in December 2011, the brand with the highest promotion level in the seasoning powder category sold 65% more volume thanks to their promotion campaign. Meanwhile, our analysis based on 10 FMCG categories, from developing to developed penetration level, conclude that on average, more than 80% of new consumers enter the category not via promotion, but via non-promoted purchase. Furthermore, the analysis also shows no significant impact on brand share among the promotion buyers 6 months after the campaign.
- Tết (Lunar New Year) is the peak time for promotion sales: As many other countries in Asia, Tet is the most important period of the year for Vietnamese. Around one month before Tet, most of Vietnamese start to shop for foods, drinks and many other kinds of products in order to prepare the celebration. Promotion is a great tool for manufacturers to get more consumers’ spending at this peak time. 4-8 weeks before Tet is the peak of promotional activities. For instance, during 4 weeks before the 1st day of Lunar New Year, total spending under promotion increased by 50% compared to an average month.
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