FMCG Monitor FY 2023: Shifting sands

2023 presented a year of complexities and unexpected turns, impacting Vietnam's economic growth. External global environment and internal constraints led to a slowdown in the economy, particularly in manufacturing and trade sectors. While the economic outlook for 2024 appears more positive, consumer confidence hasn’t quite caught up due to persistent news of layoffs and uncertainties about household income.

Worldpanel Vietnam’s FMCG Monitor – FY2023 edition dives deeper into these dynamics, uncovering key market highlights and offering valuable insights for navigating this evolving landscape.

1. Vietnam's economic picture: Growth with cautious optimism

Vietnam ended the year 2023 with a GDP growth rate of 5.05%, which fell short of the government’s 6%. However, given the prevailing global economic challenges, this growth rate is a solid performance among regional peers, proving the country’s resilience and stability.

With economic improvements recorded in Q4 2023, experts predicted Vietnam’s GDP growth rate in 2024 could reach 6%, mirroring the government’s target this year.

However, headwinds are expected to persist with export demand recovery and global economic improvement remaining key factors to monitor.

2. Consumer confidence

Such a bright economic outlook has not translated to the same turnaround in consumer confidence. In Q4 2023, consumers reported the lowest consumer confidence index since the Covid Wave 4 restrictions in 2021.The percentage of households facing financial struggles also reached a post-pandemic high, suggesting constrained consumer spending during the upcoming Tet 2024 holiday.

3. In-home FMCG overview

Urban in-home FMCG is slowly picking up pace after two years of flat volume growth, more strongly driven by a rising average price paid. On the other hand, rural areas demonstrate a more robust volume rebound, presenting significant potential for brands to expand.

A closer look reveals a gradual decline in overall value growth over the quarters, driven by both a slowdown in price increases and volume growth. Across categories, non-food sectors consistently fuelled FMCG growth throughout the year.

4. Low volume growth

While inflation may be moderating, consumers are still tightening their belts and cutting back on purchase volume, prominently in Urban 4 area.

How does it look in your brands’ categories and what can brands do to secure consumers’ share of wallet in a low-volume growth environment?

5. Retail landscape

While traditional trade remains prominent in Vietnam, its contribution to the market value is shrinking. In modern trade, Hyper & Super is facing stiffer competition from convenience and specialty formats, as consumers are increasingly seeking convenient, targeted shopping experiences. This paradigm shift is transforming both Urban & Rural landscapes with nuances in preferences and store types.

Download the full FMCG Monitor Q3 2023 report by clicking on the “Download” button on the side bar of this page.  

Worldpanel Vietnam’s Household panel 

The Vietnam FMCG Monitor series is powered by Worldpanel Vietnam’s household panel. We continuously track all information about household purchases of over 130 FMCG categories for in-home consumption. 

With our single-sourced panel, we can uncover and link consumer attitudes and perspectives to actual shopping behaviour to help you develop a holistic brand strategy. Through our advanced solutions and analytics, you will understand who your shoppers are, how they shop, spend and consume.  

Contact our expert team and start leveraging consumer and market insights to grow your FMCG brand in 2024.