Welcome to our comprehensive Vietnam FMCG Market Report for 2020 and Trend Forecasting sourced from Statista. Despite the challenges posed by the COVID-19 pandemic, Vietnam’s economy has shown resilience, ranking among the top 10 countries with the highest GDP growth in 2020. However, the ongoing fourth wave of the pandemic has impacted various industries, including the FMCG sector. In this report, we analyze the FMCG industry in Vietnam, providing insights into market trends, consumer behavior, and key growth categories for 2020. Additionally, we offer a forecast for 2021 and discuss the implications of the pandemic on the industry.
I. Overview:
Vietnam’s retail sales growth of consumer goods from 2012 to 2020 witnessed a positive trajectory, with steady expansion year after year. However, the year 2020 was significantly impacted by the COVID-19 pandemic, leading to a decline in retail sales growth. The forecast for 2021 suggests a gradual recovery as businesses resume operations and foreign investment gradually returns to the country. However, risks and challenges persist in the last six months of 2021 due to the emergence of new waves of the pandemic and the potential impact on consumer confidence and spending patterns.
II. Monthly FMCG Expenditure:
The monthly FMCG expenditure in both urban and rural areas has exhibited an increasing trend. In 2020, urban households spent approximately 1.43 million VND on FMCG products, while rural households spent around 0.85 million VND. These figures demonstrate the differences in spending patterns and purchasing power between urban and rural consumers. Looking ahead, it is forecasted that FMCG expenditure will continue to increase in both areas by 2025, driven by economic growth and rising incomes.
III. Annual In-Home FMCG Value Growth:
In terms of annual in-home FMCG value growth, both urban and rural areas experienced higher growth rates in 2020 compared to 2019. However, the central region faced challenges due to the impact of the pandemic and natural disasters, which affected the value growth in this region. There were contrasting value growth trends between rural and urban areas in 2020 compared to 2019, reflecting the dynamic nature of consumer behavior and market conditions.
IV. Most Chosen FMCG Brands:
The most chosen FMCG brands vary between urban and rural areas. In urban areas, popular FMCG brands include Vinamilk, Hao Hao noodle, Ajinomoto, and more. Conversely, in rural areas, preferred brands consist of P/S – Teeth Care, ChinSu, Nam Ngu, and others. These variations highlight the distinct preferences and purchasing behaviors of consumers in different regions.
V. FMCG Categories:
Food categories account for the highest household expenditure in four big cities, indicating the significance of food consumption in these urban areas. The dairy category holds the highest in-home FMCG value in urban areas, reflecting the demand for dairy products among urban consumers. In rural areas, the packaged grocery category takes the lead in terms of in-home FMCG category value, suggesting the importance of essential packaged goods for rural households.
VI. Food and Beverages:
From 2016 to 2020, Vietnam experienced a notable growth rate in the retail sales of food and beverages, underscoring the increasing consumption of these products. The annual value growth of packaged grocery in both urban and rural areas contributed to the overall expansion of the food and beverage market. Additionally, the most chosen FMCG brands in the food and beverage category differ between urban and rural areas, indicating the diverse preferences and brand loyalty of consumers in each region.
VII. Dairy:
Vietnam has witnessed significant production volume and retail sales value of dairy products. Drinking milk products, in particular, have contributed significantly to the overall retail sales value in the dairy category. The most chosen FMCG dairy brands in urban and rural areas reflect the preferences and loyalty of consumers, highlighting the popularity of certain brands in the dairy market.
VIII. Personal Care:
The production volume and value growth of personal care categories demonstrate the market’s expansion and the increasing demand for personal care products in Vietnam. Both urban and rural areas have experienced value growth in personal care products, indicating the importance of personal grooming and hygiene for consumers in both regions. Preferred personal care brands in urban and rural areas reflect consumer preferences and brand loyalty within the personal care market.
IX. Consumption Trends:
There has been an increased penetration of plant-based drinks among urban consumers, reflecting changing dietary preferences and a growing interest in healthier products. Consumer interest in sugar-free drinks has also gained traction, aligning with the global trend of reducing sugar intake. Additionally, there have been changing volume shares of milk consumption and the emergence of e-commerce products, indicating shifts in consumer behavior and purchasing channels.
X. Consumer Behavior:
Main attributes driving purchase behavior in recreational consumer goods include factors such as quality, affordability, and brand reputation. However, consumer confidence has experienced a decline, leading to a shift in shopping behavior from impulsive and spontaneous purchases to more planned and intentional shopping. Price and brand reputation are identified as key driving attributes for various product categories, indicating the importance of competitive pricing and strong brand presence in influencing consumer choices.
In conclusion, the key takeaways are:
- Vietnam’s FMCG sector has demonstrated resilience amid the COVID-19 pandemic, ranking among the top 10 countries in GDP growth.
- Monthly FMCG expenditure has shown an upward trend in both urban and rural areas, with forecasted growth by 2025.
- The pandemic and natural disasters have impacted the annual in-home FMCG value growth, especially in the central region.
- Variation in the most chosen FMCG brands exists between urban and rural areas, with different preferences in each region.
- Food, dairy, and personal care categories have experienced significant growth, with specific brands dominating each segment.
- Consumer behavior has shifted towards health-conscious choices and intentional shopping, influenced by price and brand attributes.
In summary, while the COVID-19 pandemic has presented challenges to the FMCG sector in Vietnam, the industry has shown resilience and adaptability. Understanding market trends, consumer behavior, and key growth categories will be crucial for businesses operating in this dynamic market. By embracing these insights and adapting strategies accordingly, FMCG companies can position themselves for success in Vietnam’s evolving landscape.
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