Welcome to our agency’s post on the key factors influencing the Fast-Moving Consumer Goods (FMCG) market in Vietnam in 2023. In this article, we will explore the current state of the FMCG industry in Vietnam, the challenges it faces due to the global economic slowdown, the future of online shopping, the growing focus on health and wellness, and the momentum for sustainable living. By understanding these factors, FMCG brands and manufacturers can navigate the evolving landscape and make informed decisions to meet consumer demands.
FMCG Overview:
The fast-moving consumer goods (FMCG) market in Vietnam has experienced a challenging period over the past two years, characterized by stagnant consumption volume. However, despite this, the overall value of the FMCG sector witnessed an increase in 2022, primarily driven by price inflation. While online growth has shown signs of leveling off, specialty stores and wet markets have managed to maintain double-digit growth. Additionally, mini stores and street shops are witnessing a recovery after a temporary dip in value during the third quarter of the year.
Long-lasting Global Economic Slowdown:
Despite ending 2022 with a record-high GDP growth, Vietnam’s economy is expected to face headwinds in early 2023. One of the significant risks is the high inflation rate, which raises concerns about job security and income stability. Vietnam exceeded its government’s full-year target with a GDP growth rate of 8.02 percent in 2022. However, mass layoffs that occurred since the fourth quarter of the same year have made consumers more cautious about their spending habits, further impacting the FMCG market.
The Future of Online Shopping:
Online shopping, encompassing both e-commerce and social commerce, continues to experience robust double-digit growth in Vietnam. This growth can be attributed to increased shopping frequency and higher spend per trip by consumers. Furthermore, online platforms are expanding beyond traditional FMCG categories and gaining popularity in other sectors, such as non-alcoholic beverages. Consumers, especially Millennials, are embracing the convenience and accessibility of online shopping, driving the upward trend.
Health & Wellness as a Lifestyle:
The global pandemic has prompted consumers to prioritize health and wellness in their FMCG choices. Consumers are actively seeking products that offer nutritional benefits, healthier alternatives, and reduced fat or sugar content. Beverages with various health benefits have gained significant popularity among consumers of all age groups, particularly Millennials. FMCG brands need to adapt their offerings to cater to this growing demand for healthier options and provide transparent information about the nutritional value of their products.
Momentum for Sustainable Living:
Even after the pandemic, the desire for sustainable living remains strong among consumers in Vietnam. More than half of the consumers in the country are conscious of their environmental footprint and strive to minimize their impact. However, there is still a gap between consumer desire and action when it comes to sustainable practices. Many shoppers find it challenging to change their habits, such as reducing plastic usage, and they perceive eco-friendly products as expensive and hard to find. FMCG brands have an opportunity to bridge this gap by offering affordable and easily accessible sustainable alternatives and educating consumers about their environmental initiatives.
In conclusion, as Vietnam’s economy faces the challenges of rising inflation, FMCG brands must carefully navigate the impact of price increases while maintaining brand building efforts. Social commerce is expected to shape the future of online shopping, blurring the lines between online and offline customer experiences. Health and wellness considerations are becoming inherent criteria in FMCG choices, particularly among health-conscious Millennials. Finally, FMCG brands and manufacturers have an opportunity to lead the change towards sustainable living by helping consumers turn their environmental concerns into action.
Key takeaway points:
- FMCG market in Vietnam experienced flat consumption volume but increased in value due to price inflation.
- Online shopping continues to grow with increased shopping frequency and expanded categories.
- Health and wellness play a crucial role in FMCG choices, driven by the pandemic and consumer awareness.
- Sustainable living remains a priority, but consumers face challenges in changing their habits.
- Brands should balance inflation, pricing strategies, and brand building efforts.
- Social commerce will shape the future of online shopping.
- FMCG brands can make a difference by leading the change towards sustainability.
For more information and detailed statistics on the FMCG market in Vietnam in 2023 or discuss how our agency can assist your FMCG brand in navigating these key factors, don’t hesitate to drop us a line!
