FMCG Monitor April 2017
A glowing outlook of FMCG is continuously expected by the end of 2017
Key market highlights in April 2017 issues:
On average in the first 4 months of 2017, CPI is lower than the average of Q1 2017 yet still posts at a high rate compared to last year. Though the rest of the year is predicted to see positive improvements with more efforts needed, Vietnam eyes a tough road to reach the 2017’s target of economic growth. In the context of weaker economic performance than expected, the healthy growth of retail sales of consumer goods is a bright spot.
Urban 4 key cities FMCG market keep moving up in both value and volume while Rural market is likely to get its momentum back. In short term, the market has been recovering in Rural since the 2nd quarter of 2016 and reaches the highest growth in this period. Overall, a glowing outlook of FMCG is continuously expected by the end of 2017.
Beverages and Packaged Foods are leading the growth of Urban market while Beverages and Dairy are driving the recovery of Rural market. Personal Care and Home Care also show great achievements thanks to the increase in consumption. In general, positive performance is observed across most of sectors, except for Dairy in Urban 4 cities and Packaged Foods in Rural. The reason is the stagnancy or even decline of some major categories such as Milk Powder (Urban 4 cities), Cooking Additives and Instant Noodle (Rural).
Instant Tea and Household Cleaner products stand out in Urban 4 cities and Rural respectively in this period. By adding more new buyers to their shopper base, Instant Tea and Household Cleaner enjoy strong growth in volume consumption. These categories see great potential for development in terms of both market penetration and consumption uplift.
Are they gaining from others? Or are there new needs arising that develop the FMCG market further?
By upgrading and modernizing themselves, medium-sized street shops grow ahead of the market and gain more ground not only in Urban 4 cities but also in Rural areas recently. During the first 4 months, Hyper & Supermarkets keep growing their importance by widening their reach, recruiting more Urban shoppers. Therefore, together with the rapid development of mini-stores (minimarkets & CVS), modern trade probably will be able to make a better movement this year.
Spotlight of the Month
Threat to Growing Up Milk Powder
In Urban 2 key cities, the category is currently facing both buyer departure and decreased consumption among babies >1 year old despite the brighter view of FMCG market. Following the convenience trend with modern moms, is it losing shoppers to Ready-to-drink dairy products like Ready-to-drink Growing Up Formula Milk (RTD GUM)?
Urban 4 cities include Ho Chi Minh, Ha Noi, Da Nang and Can Tho.
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