Urban FMCG market rising as rural market sees lower growth

The key market highlights in December were as follows:

Key Indicators

2016’s GDP reaching 6.21 per cent fell short of the target of 6.5 per cent but CPI was controlled at 2.67 per cent, lower than the targeted 3-4 per cent. Retail sales of consumer goods also maintained double digit growth, at 10 per cent on average.

FMCG Growth

The Urban 4 key cities FMCG market rebounded compared to the same period last year. Meanwhile, the rural FMCG market continued to decelerate, driven by lower purchasing volumes.

The beverage sector was the fastest growing sector in 2015 but this wasn’t replicated in 2016, as shopping frequency fell in both Urban and Rural markets. Packaged Foods and Home Care continued to shine in Urban markets while Dairy and Personal Care again led growth in Rural markets.

Hot Category

Ketchup and Facial Wash emerged as popular products in Urban and Rural markets, respectively. The two categories are attracting more buyers and have great potential to expand further, as more than 80 per cent of people are yet to purchase them.

Retail Landscape

Street Shops (medium-sized format in Urban 4 cities, small-sized format in Rural) and Mini-Stores (including minimarkets and convenience stores) are still growing well. Hyper & Supermarkets rose to 5 per cent in Urban areas and are expected to retain momentum during the Tet period.

Spotlight of the Month

Millennials, Stay focused?!

The group accounts for a large portion of Vietnam’s population. Their lifestyle is different to the >40YO group. In FMCG, their value contribution in Vietnam is also higher than in other Southeast Asian countries, which is expected to increase further in the “connected” era.

VN Economic Times

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