FMCG Monitor July 2015
Overall market growth follows a “new normal”, moving at sluggish pace yet in short term Urban market gets momentum back
Continued Positive Momentum in FMCG Market
Some highlights in the July issues:
Key economic indicators
The Vietnam’s economic growth continuously showed positive signals. And the CPI rate was still well-controlled at 0.9%.
Overall market growth follows a “new normal” trend – moving at sluggish pace. Yet in short term, Urban market growth is getting its momentum back in both value and volume whilst Rural holds its growth stable at a single-digit rate.
The hot FMCG categories that enjoy big increase in 12 weeks period ending 12 July: Canned Fish in urban and Floor Cleaner in rural. They achieved incremental growth in volume, mainly driven by reaching more new buyers.
Street Shops and Modern Trade have struggled while Specialty and Mini stores are emerging in Urban. In the meantime, in Rural, Street Shops preserves its dominance in market share and keeps growing.
Spotlight on Vietnam
• Purchasing Konfidence Quarter 2 2015
This indicator continues to drop to 6.4 points (compared to 8.3 points in previous quarter), the lowest point over the past two years, urban consumers are now conservative, more cost-conscious in grocery and heading more toward savings, especially in Hanoi.
• The difference in consumer trend between Ho Chi Minh and Hanoi
Downtrend is more in Hanoi. The report also shows that Hanoi people react later than Ho Chi Minh as the market slow-down started in Ho Chi Minh end of 2013 while this happened in Hanoi from mid-2014. Hanoi consumers even seem to be more price-sensitive and more cost-conscious now, which also happened earlier in Ho Chi Minh in 2013.
David Anjoubault – General Manager of Kantar Worldpanel Vietnam comments: “Although the financial capability has been more improved, the Purchasing Konfidence of Quarter 2 finds that urban consumers are now more cautious and even reduce in spending on FMCG market. They especially cut more on nice-to-have categories. This means there is a fact that the current market has not completely met the consumers’ demands and expectations yet. Therefore, we can see no lack of opportunities for growth but also forced manufacturers and retailers need to quickly adapt to consumer changes, moving fast toward consumer trends and actively stimulate consumer needs in the near future.”
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