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‘Cautious optimism’ around Tet 2023's FMCG growth



‘Cautious optimism’ around Tet 2023's FMCG growth

The Lunar New Year – known locally as Tet – is the busiest season of the year in Vietnam, generating massive increases in shopping, gifting and travelling across the country. In 2023, the holiday falls on 22 January. Consumers will place high expectations on brands to deliver in terms of price, products and services – especially in the context of rising inflation in Vietnam and the rest of world.

Vietnamese consumers can finally embrace a new year free of lockdowns and restrictions. However, with climbing inflation and the rising costs of consumer goods being top of mind, shoppers are not entering Tet 2023 free of worries.

So how might consumer FMCG spending differ during the upcoming festive season? And how can brands best position themselves for success in this optimistic yet cautious climate?

The outlook for Tet 2023

Following declines in FMCG growth during the last two Tets, the prospect for Tet 2023 is better, as the wider Vietnamese economy is recovering and consumers are feeling positive about this. However, growth will be hindered due to rising concerns around income and job security. With pressure from inflation still present, shoppers are feeling the squeeze on their wallets, and are adopting different strategies to adapt to the economic situation. On the other hand, we can anticipate a boost in spending power coming from two big holidays happening in a single month (New Year and Tet 2023).

As a result, FMCG value is expected to grow by between 7% and 9% in Total Urban 4 Key Cities & Rural, compared to last year, with the increasing average price paid as the primary driver.

Celebratory categories recover strongly

In contrast with Tet 2022, when demand for celebratory categories fell because of restrictions on travel and gatherings, the massive growth momentum seen this year in beverage consumption will continue to benefit categories like carbonated soft drinks and beer.



This festive season, large-scale stores such as hypermarkets and supermarkets are on the road to recovery from the significant drop in spend they experienced in Q3 2021, along with specialty stores and wet markets, which were impacted the most during the pandemic. These channels have seen positive rolling year-on-year value growth since last year. Hypermarkets and supermarkets remain shoppers’ preferred format for Tet shopping.

Meanwhile online growth is plateauing, but is still in double-digits. Because of the rising availability of festive categories on online and social channels, and shoppers' increasing need for a convenient format after resuming their busy lifestyles, ecommerce will continue to be a hassle-free and easy method of Tet shopping.


FMCG spending is hampered by economic headwinds

Holiday FMCG spend in Vietnam is expected to be impacted by the world economic downturn. The IMF has revised its global GDP growth forecast for 2023 to 2.7%, down 0.5% from 2022, and more than a third of the global economy is experiencing two consecutive quarters of negative growth. As a result, factories in Vietnam – particularly those that manufacture garments, textiles and footwear – are experiencing a plunge in foreign orders.

Manufacturers and factories in Vietnam are laying off large numbers of workers, dampening the holiday spirit. Since the middle of the year, 41,500 workers in Vietnam have had their contracts terminated, while production issues have put at least 430,000 at risk of having their hours reduced, or having their employment interrupted in other ways.

Many laid-off workers will choose to return to their rural communities earlier to spend more time with their families. This implies two things: working-class consumers will be looking for ways to stretch their budgets until Tet, and there will be a shift in FMCG purchasing from urban to rural areas.

Vietnamese consumers are also concerned about the fluctuation in oil prices, leading to high gasoline prices. Families are having to re-evaluate their budgets and cut back on discretionary spending, which could pose a problem just as the holiday shopping season gets underway.


A mindful Tet marketing plan

Vietnam’s consumer price index (CPI) in November 2022 has edged up a slight 0.39% over the previous month and 4.37% against the same period last year (GSO). As prices increase, conversations about budget will be more prominent and consumers will pay more attention to price tags before purchasing. This will also drive people to start planning for Tet shopping earlier.

Some important questions brands need to answer include how sensitive their targeted shoppers are to price changes, and how they will react to them depending on their financial confidence.

To respond to the context around Tet 2023 and beyond, it’s critical that brands set realistic targets and adjust their distribution plans. They need to devise the right strategy in pricing and promotion while delivering an appropriate message for a Tet during which consumers will be under financial pressure.

Reach out to our experts to understand the behaviour of your brand’s shoppers, and what you need to know to prepare a successful marketing plan for this potentially profitable time of year.

Stay tuned for our annual Tet findings coming in 2023.

Get in touch

Jane Ha

Senior Marketing Manager


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