5 key factors influencing Vietnam's FMCG market in 2023
Worldpanel Vietnam_5 Key Factors Influencing Vietnam's FMCG Market in 2023
Vietnam's consumer market is evolving rapidly, with new products being launched every hour, new channel and technology players, and more sophisticated consumer preferences.
In 2022, FMCG in Vietnam posted a value growth of 5% in Urban 4 key cities and 11% in rural areas, owing primarily to rising prices. In the current global economic environment, inflationary pressures in Vietnam are expected to persist, affecting both consumers and businesses. To stay competitive, brands must understand consumer priorities as well as the importance of each FMCG category in consumers’ expenditures and purchase decisions during this period.
Despite recent headwinds from global inflation, Vietnam remains a promising market, with a robust GDP growth rate of 8.02% in 2022, the highest of any Southeast Asian country. By 2030, the country is expected to be the world's tenth largest consumer market.
We’ve identified 5 major consumer trends that will shape the FMCG market in Vietnam in 2023.
FMCG growth stalling
In 2022, rising prices drove FMCG value growth while volume consumption in Urban 4 remained flat. Rural regions showed promising signs as FMCG volume picked up after a period of stagnancy in 2021.
Global economic slowdown: it gets worse before it gets better
The global economy is expected to continue to slow down before rebounding in 2024. In early 2023, with China’s reopening and resilient demand from EU, the IMF raised its Global GDP forecast for 2023 from 2.7% to 2.9%, albeit still a slower growth than that of last year.
The future of online shopping
The emergence of TikTok shop and other technological advances will enhance the online shopping experience and fuel the growth of this channel.
Health & wellness as a lifestyle
Health motivations are becoming key decision drivers in FMCG purchases, with more consumers prioritizing and willing to pay more for products that offer health benefits or align with their wellness goals.
Momentum for a sustainable lifestyle
Sustainability is returning to the forefront of discussions among businesses, policy makers, and consumers in Vietnam. FMCG brands need to seize this opportunity to help consumers turn their desire to do good into action. By focusing on environmentally friendly practices and sustainable packaging solutions, companies can differentiate themselves in the market and appeal to increasingly eco-conscious consumers.
The way forward for brands
2023 will be a challenging year for Vietnam's FMCG market, but brands that are able to adapt to these trends and prioritize consumer needs will be well-positioned for growth. Talk to us to stay abreast of consumer trends in your category, gain a competitive edge and capture a growing market in Vietnam.
Download our full report on the 5 prominent trends that will impact the FMCG market in 2023 on the right side of this article.