FMCG Monitor FY2022: Riding the inflation wave

The year 2022 was a year of recovery as Vietnam emerged from strict lockdowns and restrictions. The Vietnamese economy as a whole achieved impressive growth, putting the country on course for robust and sustainable growth in the following years.

At the same time, the global economic slowdown has made and will continue to make an impact on the consumer market as inflation in Vietnam is expected to rise in 2023.  

Key market highlights from Kantar’s FMCG Monitor FY 2022 include:

In 2022, Vietnam’s economy recorded an impressive GDP growth of 8%, the highest in over a decade, in the face of global uncertainties brought by rising inflation, the conflict in Ukraine, and lingering concerns about the pandemic. 

The impact of global instability and inflation was felt on the local economy with consumer price index (CPI) rising significantly toward the end of last year and further increases anticipated this year, putting pressure on purchasing power.  

Total FMCG posted an overall value growth vs. YA both in Urban 4 cities and Rural areas, driven  mainly by an increasing price paid. Rural areas showed promising signs as volume consumption increased, albeit at a slower pace than the price hikes. 

In Urban 4 cities, the bounce back of Beverages and Non-food sectors contributed significantly to FMCG growth both in terms of value and volume. While in Rural regions, all FMCG categories showed strong growth except for Packaged Foods which saw decline in consumption.  

The Beauty care sector is on track for a strong rebound in 2022 from a decline in 2021 particularly thanks to several facial care categories that recorded double-digit growth in two consecutive years.  

While still enjoying a double-digit growth rate, online channel growth is plateauing from a strong start in early 2022, giving way to modern trade and traditional formats that gained back popularity as people spent more time out of home.