FMCG Monitor August 2019
Key market highlights in August 2019 issues:
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%.
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.
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.
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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