FMCG Monitor November 2020

Key market highlights:

1. Economic indicators

Vietnam’s economy has been affected by the pandemic, slowing down its growth rate compared to previous year. However, it’s on the pattern of recovery in recent months, partly driven by the rebound of retail sales of consumer goods and the stability of CPI.

COVID-19 has a negative impact on FDI and business operations across industries in 2020. While export and import manage to post a positive performance over the last 10 months.

2. FMCG overview

FMCG growth slows down in short term, returning to single digit pace in both Urban 4 cities and Rural. Overall, FMCG market is projected to sustain a healthy growth of 8%-10% for 2020.

Packaged Food sector has a remarkable year, driven by the significant increase of cooking & snacking categories. The other sectors also achieve robust growth in both Urban 4 cities and Rural, except Beverage which is expected to bounce back by exciting the market and consumers with new news and innovations.

3. Hot categories

Packaged bread has thrived during the first 10 months of 2020, thanks to its convenience and nutrition as a meal alternative. The category growth is partly driven by the expansion of consumer base and the increase in volume consumption. There are room for packaged bread to further grow post pandemic by capturing new eating occasions.

4. Retail landscape

All shopping channels both traditional and modern trade perform well. Emerging channel formats such as online and minimarkets continue growing share with a fast pace, which speeds up the development of modern retail.

5. Spotlight: How Tet 2021 will look like?

Tet is the greatest opportunity for FMCG players and retailers as total Tet sales normally double that of a normal month, mainly driven by gifting. However, with the effects of C-19, are there any changes will be observed? Will FMCG spend pick up thanks to more in-home occasions and will online channel further accelerate in the upcoming Tet?

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