National sales of FMCG on traditional and modern trade channels in urban areas reached $14 billion in Q2, growing 0.7 percent, Nielsen reported.
The fast-moving consumer goods growth year-on-year was driven by sales increases seen across six out of seven super categories: beverages (including beer), milk and dairy products, household care products, personal care products, baby care products, and cigarettes.
Baby care witnessed the biggest jump to 12 percent while food showed a decline of 1.9 percent, according to the market research firm’s newly-released Market Pulse Quarter 2 report.
“FMCG has yet to reflect an upturn in economic conditions while Vietnam’s GDP growth hit 7.1 percent in the first half of 2018,” Nguyen Anh Dung, executive director of Nielsen Vietnam’s retail measurement services division, said.
But there were many growth pockets, with modern trade channels seeing double-digit growth, he noted.
Semi-retail channels comprising stores with both wholesale and retail sales also saw strong growth.
Overall, the modern distribution channel enjoyed growth of 11.9 percent while the traditional channel was sluggish. Sales through traditional channels in urban areas rose 1.2 percent while in rural areas there was a drop of 2.4 percent.
Dung said seasonality could provide an opportunity for certain categories such as snacks, dairy, beverages, and confectionary to innovate and connect with consumers in novel ways.
“FMCG products have become basic while other products provide more excitement with innovation and new customer experiences. Consumers are willing to loosen their purse strings as reflected in strong growth in entertainment, tourism, cellphone, and automotive sales.”
It is time for manufacturers to bring excitement back to the FMCG industry, and the most important thing is to listen to consumers and put them at the center of all decisions they make, he said.
They provide the key growth cues if manufacturers can satisfy their needs, he added.
