FMCG Monitor August 2019

Key market highlights in August 2019 issues:

Key Indicators

Coupled with low CPI, Vietnam’s economy and domestic demand maintain the momentum, slightly slower than the same period last year. However, more efforts needed to make the most of CPTPP* and EVFTA** in order to further boost the economic growth and reach 2019’s GDP growth target of 6.8%. 

FMCG Growth

In long term, FMCG market is heating up, even twice the pace of last year in Rural. In short term, FMCG spending and consumption continues to grow strongly in Quarter 2 and is likely able to keep pace with economic growth of 6%-7% for full year 2019.

In Urban 4 cities, all sectors except Beverages perform very well, especially Personal Care with double-digit growth rate. In Rural, Dairy continuously enjoys an impressive growth and is leading the FMCG market growth.

Hot Category

Dairy growth is partly driven by the robust development of ready-to-drink growing up milk, especially in Rural areas, thanks to its convenience. The category has just reached more than 10% of total consumer base with new players jumping in, showing huge potential to tap into.

Retail Landscape

In quarter 2 of 2019, almost all channels show good performance in Urban areas. Consumers continuously shop FMCG products through multiple shopping channels, reinforcing omnichannel strategy is now a necessary for brands and retailers. In Rural, medium-sized street shops remain the fastest growing channel and continue expanding its coverage.

Spotlight of the month – Finding growth in high consumption markets: VALUE CREATION

It can be often a challenge to find growth in mature categories already purchased by most Vietnamese households like Fish sauce and Instant Noddle; however, there are still pockets of opportunity for both.

*Comprehensive and Progressive Agreement for Trans-Pacific Partnership

**EU-Vietnam Free Trade Agreement

Urban 4 cities include Ho Chi Minh, Ha Noi, Da Nang and Can Tho.

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