FMCG Monitor June 2021

Key market highlights:

1. Economic indicators

In the 1st five months of 2021, Vietnam continues seeing a rebound of retail sales of consumer goods, import and export while the CPI is maintained at low rate. On the opposite side, business activities and foreign investment still feel the impact of the on-going pandemic.

Given the new wave happening massively since May, the situation poses risks and challenges to the whole economy in the rest half of 2021.

2. FMCG overview

FMCG growth returns to pre-COVID-19 level in both value and volume consumption. In short term, consumers reduce FMCG spend versus the same period last year when there was a spike due to the pandemic. Yet, the purchasing level is still higher than pre-COVID19 time, up more than 10% versus 2019.

The reduction in spend has been seen in dairy and packaged foods. In contrast, beverages return to positive growth in Urban 4 key cities.Due to the current spread of infected cases, FMCG spend is expected to pick up again in coming weeks yet might not reach the new height in growth, compared to the peak of last year.

3. Hot categories

Hybrid drink shines bright with a robust growth in both Urban and Rural areas. This category growth is driven by the expansion in shopper base and the uplift in volume consumption.

Due to small base, hybrid drink holds huge potential to further develop by capturing the rising demand of health and nutrition, especially in Rural market.

4. Retail landscape

Online FMCG shows a continuous potential for growth as it is the only channel keep growing double digit rate after the 1st year of COVID-19.

With the reoccurrence of COVID-19 preventive measures, value share of online and minimarkets will be likely to keep up with that of wet market – a more-established traditional channel by 2022.

5. Spotlight: Who were the best performing brands of 2020 in Vietnam?

Penetration is king! The key driver of growth among the best performers is the ability to win new consumers, reinforcing the important role of growing consumer base in brand growth.

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

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