FMCG Monitor September 2017
A stable recovery in Urban 4 cities while an uncertainty to rebound in Rural
Biscuits in Tet: Which strategy to win in the hot season?
Key market highlights in September 2017 issues:
CPI September remains stable, the average CPI of 9 months is kept under +4%. Vietnam economy continues to improve, hitting the highest growth rate over the last 2 years, boosted by the strong performance of the wholesale & retail and export.
In short term, Urban 4 cities market picks up while Rural consumption sees an uncertainty to rebound from the economic difficulties in 2016. In long term, however, both Urban and Rural market growth observe an upturn though consumption still grows lowlier than last year.
Dairy has not shown any sign of healing due to the continued downturn of Milk Powder for kids. Meanwhile, Beverages bounce back, leading the Urban growth and Home Care continues shining in Rural. Packaged Foods remain weak performance especially in Rural areas, mainly driven by the gradual shrink of consumer base and volume consumption in necessities like Cooking Oil, Fish Sauce and Instant Noodle.
In Urban, ready-to-drink tea has been gaining back buyers and also seeing an improved consumption since Tet 2017, largely pushed by the recovery of some key players. Yet, striving to innovate to catch up consumer trends is still needed to sustain and develop the category further. In Rural, household cleaner continues recruiting new buyers, partly attributed to rising hygiene awareness along with better living conditions.
Specialty stores and modern channels keep up their momentum in Urban market. Some H&S retailers are performing very well and ministores continuously attract lots of new shoppers. Meanwhile, Rural shoppers keep moving towards upgraded channels but surprisingly wet market gets growth back thanks to the South region.
Spotlight of the Month – Biscuits: Hot season is coming!
Biscuits have achieved outstanding growth for recent years, mostly driven by Tet season where one third of total Biscuits sales were earned from. With its strong momentum, the category is forecasted to continue enjoying double digit growth in Tet 2018. And in order to leverage further Tet’s success, businesses should plan well for not only Tet season but also post Tet period which seems to double value of a normal month.
Urban 4 cities include Ho Chi Minh, Ha Noi, Da Nang and Can Tho.
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