FMCG Monitor December 2017

FMCG market shows improvements in both Urban 4 cities and Rural in the last quarter, and is expected to rise by 6-7% in 2018.

Positive outlook for 2018 FMCG

Key market highlights in December 2017 issues:

Key Indicators

Vietnam economy surpassed the 2017’s GDP target, posting the highest growth rate since 2011. Key economic indicators show good achievements such as import/export, FDI, retail sales... 2018 performance would be brighter with an estimated rise of 6.7%. However, in the middle and long term, there are still some challenges (low labor productivity, environmental issues…) need to be foreseen and overcome to reach sustainable economic development.

FMCG Growth

FMCG market shows improvements in both Urban 4 cities and Rural in the last quarter. For the whole year 2017, Urban market strengthens its performance while Rural picks up but is not stable just yet. Another year of stronger FMCG growth expected for 2018 to rise 6-7%.

In short-term, Beverage sector remains the growth driver of Urban market. Personal Care continues developing very well in both Urban and Rural as consumers increasingly adopt diverse repertoire of products. Meanwhile, Dairy and Packaged Foods are still lagging behind the market.

Hot Category

The positive growth has been seen across categories within Personal Care. Facial Moisturizer and Make-up items are the most outstanding categories, gaining consumers’ spending in Urban and Rural respectively. The growth of Facial Moisturizer is largely attributed to the premiumization while more consumers start focusing on beauty care in Rural areas.

Retail Landscape

Wet market continues losing share to other channels while minimarket/ convenience stores accelerate their expansion in Urban key cities. Modern trade speeds up with an increase of 15%, outpacing traditional channels. The retail market is expected to heat up further for 2018 with new entrants and new retail models. In Rural, medium-sized street shops continue to win shopping occasions.

Spotlight of the Month – Satisfy demand for snacks at home?

Snack market is now the main source of growth for Packaged Foods in both Urban and Rural. More innovations and the increasing convenient indulgence in food consumption are driving the growth of snack foods. Brands can leverage this trend by creating and capturing additional snacking occasions.

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

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