The economy shows signs of improvements in the second quarter of 2023, with a higher GDP growth and a lower CPI. However, consumers remain cautious and financially stressed, as the drop in price decreases is not enough to boost their confidence. Overall FMCG value growth follows a downward trend with bright spots in non-food sectors, indicating a challenging outlook for the rest of the year.

Key in-home FMCG market highlights in Q2 2023:

1. Economic Indicators

Vietnam’s economy picked up speed in Q2 2023, growing by 4.14% after a sluggish 3.23% in Q1. This bodes well for the coming quarter, but the outlook remains lackluster. Meanwhile, CPI eased to 2.4% year-on-year. However, the second half of the year will be challenging, as global economic woes and weak demand persist.

2. Pressure Groups

Over a quarter of households are still struggling financially. From Q4 2019, the number of families facing financial difficulties has soared from 19% to 28% in Q2 2023. The ease on rising prices has yet to boost consumers’ confidence levels as their concerns about job and income security are still on the rise.

Although price increases are showing signs of cooling down, the total value of household consumer goods is experiencing downward growth momentum, suggesting slower growth ahead. On another note, volume growth remains strong in rural areas compared to Q2 last year, driven by non-food sectors.

4. Retail Landscape

Mini stores are taking the retail market by storm, continuously increasing in value contribution at a steady two-digit rate, along with Online. Specialty stores also show strong performance, leading the expansion of general trade.

5. The impact of promotions

Due to rising costs of living, consumers are more actively comparing prices even between stores (including online) to find the best deals. This behaviour translates into shopping choices, resulting in a more than 30% uplift in FMCG products purchased under promotions in the 3 months of March-May. But not all categories benefit from a promotional push. Do you know how much of an uplift from promotions is helping your brand?

Worldpanel Vietnam’s Household panel

The Vietnam FMCG Monitor series is powered by Worldpanel Vietnam’s household panel, which continuously and regularly tracks all information about household purchases of over 180 FMCG categories for in-home consumption.

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

Contact our experts to find out how you can unlock spaces of growth for your brand in a turbulent time for FMCG.