Vietnam’s positive economic outlook and growing domestic demand are expected to boost growth in the fast-moving consumer goods (FMCG) market to the end of the year, according to the latest key market highlights from Kantar Worldpanel Vietnam.

Mr. David Anjoubault, General Manager of Kantar Worldpanel Vietnam, said the Urban FMCG market continues to show good movement. In Rural, meanwhile, the market is improving slowly despite the impact of natural disasters over the last two months.

In Urban, Carbonated Soft Drinks (CSD) and Energy Drinks have recruited buyers since the beginning of the year, mostly driven by the market leaders. The Urban 4 cities include Ho Chi Minh, Hanoi, Da Nang, and Can Tho.

In Rural, Tonic Food Drink liquid is developing very well. The category has not only seen its buyer base expand but also increased consumption. Its success is attributed to the widening distribution network reaching every corner of Rural areas.

Non-food sectors are retaining their momentum, especially Personal Care categories. Beverage is now leading in growth in Urban once again while Dairy has shown a slight increase in Rural partly thanks to milk-based products such as cup yogurt and cream desserts. However, Dairy in Urban and Packaged Foods in Rural are still suffering from falls in volume consumption.

Modern Trade maintains healthy growth, from bricks & mortar stores (both big and small formats) to online channels. On top of that, Minimarkets, Convenience Stores and online shopping are getting more and more familiar among shoppers and are gaining more ground in Urban. A fifth of Rural shoppers now shop at medium-sized street shops for a larger range of products and choices, which is a good sign for further expansion of this channel in Rural.

While Private Label accounts for 20-30 per cent of total retail sales in the US and the EU, it still has limited development in Vietnam, mainly due to underdeveloped Modern Trade and a lack of diversified product offerings and effective communications. The rise of smaller modern shopping formats and more investment from “giant” retailers may leverage Private Label further.

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