Typhoon Yagi, one of the most powerful storms to hit Asia in recent years, made landfall in northern Vietnam on September 7th, resulting in extensive damages in northern provinces. The storm, the most severe to affect the North in three decades, caused an estimated USD 3.3 billion in damages and is projected to reduce Vietnam's 2024 GDP growth by 0.15 percentage points, according to the government.

Such a devastating natural disaster not only disrupted various sectors but also impacted northern Vietnamese consumers’ purchase behaviour. The uncertainty and disruption caused by the typhoon have led to a short-term shift in consumer priorities and FMCG spending patterns. Additionally, the event posed prolonged implications for the upcoming Vietnamese New Year (Tet) season and throughout the year of 2025.

This article unpacks insights into the impact of Typhoon Yagi on consumer sentiment and purchasing behaviour, highliting the implications for purchase behaviour and FMCG growth in Northern Vietnam in 2025. 

I. Impact on consumer sentiment

Kantar Worldpanel’s quarterly consumer confidence survey reveals that concerns about climate and natural disasters have emerged as a top two concern for Vietnamese consumers in Q3 2024.

Historically, concerns about natural disasters have been more prevalent among Central Vietnamese consumers, particularly during the monsoon season typically in the third quarter of the year. However, the significant impact of Typhoon Yagi has amplified these concerns nationwide, with nearly half of all households across Vietnam’s 4 key cities expressing worries about climate change and natural disasters. Hanoi, one of hardest-hit cities,. witnessed the most dramatic increase, with concerns surging from a mere 9% in Q3 2023 to a striking 56% in Q3 2024

Coupled with rising food prices, this heightened uncertainty may influence consumer spending priorities and behaviour. While the immediate impact of the typhoon may be temporary, the recovery process for Northern Vietnam, which is less accustomed to such severe natural disasters, may be more prolonged. This could lead to potential budget constraints for certain categories and prioritisation on recovery in the coming year.

Data from Kantar also reveals that the typhoon also disrupted the recovery of consumer confidence on the country’s economic prospects, from 80% in Q2 2024 to 69% in Q3 2024. This figure was only higher than that of the challenging year-end in 2023 and the social distancing period during the Wave 4 of Covid-19. The sharpest decline in consumer confidence is concentrated in Hanoi, while residents of other cities maintain a more optimistic outlook.

II.    Impact on FMCG and intention to spend

History has shown that during crises like pandemics and natural disasters, consumer demand for essential FMCG items surges as people stock up. However, a closer look at post-typhoon FMCG purchasing behaviour in Hanoi and rural northern Vietnam reveals some nuances.

In the immediate aftermath of the typhoon, Hanoi witnessed a surge in FMCG demand, likely driven by a combination of stockpiling behaviour and preparations for potential flooding that followed.

In contrast, rural northern areas, which suffered more significant economic damage, experienced less pronounced growth in FMCG spend value. While urban centres like Hanoi experienced less household and financial damage, rural consumers may have suffered greater agricultural damage, leading to reduced purchasing power and a shift in consumer priorities. Rural consumers may also have been more reliant on donations from relief efforts, prioritised essential items like food, water, and medicine, while reducing discretionary spending on non-essential FMCG items.

Kantar Worldpanel reconnected with several panellists residing in the typhoon's direct path. While urban residents in Hanoi reported a slight increase in stockpiling behavior and minimal impact on household income, the situation was significantly different for rural households. They reported substantial losses to their livelihoods and assets, directly impacting their disposable income. Due to these losses and reliance on relief efforts, their FMCG spending either remained the same or declined. This suggests that households’ priorities will be placed on rebuilding livelihoods and recovering financially, which may impact future FMCG spending in rural North.  

While rural North did not see much change in FMCG growth, packaged foods and certain beverage categories saw more prioritisation than personal care and home care products in September. The impact of the typhoon on FMCG growth in rural maybe heavier and prolonged than in the urban centre.

It’s worth noting that while the short-term impact on rural FMCG consumption may seem less fluctuacting, the mid- to long-term consequences could be more significant. The typhoon's impact on rural livelihoods and infrastructure may lead to ongoing economic challenges, affecting consumer spending power and preferences

III. Navigating the post-typhoon FMCG landscape: What will 2025 look like in the North?

Tet 2025 remains a crucial period for FMCG brands and certain FMCG categories, often contributing a significant portion, up to a quarter or even a third, of their annual sales. Winning the Tet season is still particularly important in the North, where traditional celebrations hold deep significance.

Both Northern Vietnamese consumers and those in the rest of the country will prioritise essential spending, but their approaches to rationalisation may differ due to various factors.

1.     Short-term: Winning Tet in the North is critical for brands

• Tet holds significance in the North: Kantar’s festive studies have shown that traditional holidays such as Moon festival and Tet still hold significant relevance for northern consumers. While economic factors may influence spending patterns, the cultural importance of Tet ensures its continued importance in the North. Rationalised purchases will likely be observed in normal months rather than during the holiday season.

• Reduced disposable income: The economic damage caused by the typhoon led to a decrease in disposable income for many households, impacting their ability to spend on Tet preparations. This will be more prominent in northern rural as they have less disposable income and are more dependent on agricultural livelihoods, as highlighted by Kantar Worldpanel’s panellists.

• Prioritisation of home recovery: Again, with a focus on rural north, consumers may prioritise rebuilding their homes and livelihoods over traditional Tet spending, leading to a shift in spending priorities and budget allocations.

• Uncertainty and cautious spending: The overall economic uncertainty caused by the typhoon could make consumers more cautious with their spending, likely resulting in subdued or moderate growth in Tet 2025 versus last Tet.

 2.     Mid-term outlook: Potential delay in northern FMCG growth

• Urban vs. Rural Impact: While urban northern households may be less affected individually by Typhoon Yagi, rural households may experience decreased disposable income due to agricultural damage and economic disruption.

• Ongoing Concerns: Uncertainty and ongoing concerns about Costs of food and Natural disasters will continue to impact intention to spend

• Post-Tet Rationalisation: The traditional holiday remains relevant in the North, which is while rationalised spending will not be as evident, in comparison to the South where consumers enjoy a relaxing time and simplified holiday. However, in the quarters following the Tet holiday, consumers, particularly in the North, may adopt a more cautious approach to spending, stalling the growth of FMCG.

Leveraging consumer data to drive your brand’s success

The insights from this article are powered by Worldpanel Vietnam’s household purchase 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 most valuable shoppers are, how they shop, spend and consume.  

Ready to unlock the power of consumer insights? Contact our experts today to learn how we can help you supercharge your marketing strategy in 2025.