Nielsen report shows continued growth of fast-moving consumer goods around Vietnam.
Fast-moving consumer goods (FMCG) found momentum in the fourth quarter of last year in recording growth of 5.7 per cent, according to the latest quarterly Market Pulse report from market researcher Nielsen.
FMCG operations in the six key cities of Hanoi, Ho Chi Minh City, Hai Phong, Can Tho, Nha Trang, and Da Nang experienced recovery, with 5.7 per cent growth compared to 4.5 per cent in the previous quarter, driven by an increase of 4.9 per cent in volume growth against 3.6 per cent in the third quarter.
FMCG Growth - Six Key Cities
Source: Nielsen's Market Pulse report
The recovery is reflected in growth across most of the seven major categories of beverages (including beer), food, milk base, household care, personal care, cigarettes, and baby care.
Beverages continued to enjoy major increases, recording the highest growth of 9.7 per cent, mainly driven by increasing volume growth of 7.7 per cent and contributing 38 per cent to total FMCG sales.
The final quarter of last year also saw a soft rebound in the food and milk-based categories, with volume increases of 0.9 per cent and 3.7 per cent, respectively. Other categories also exhibited signs of recovery, except for personal care, which remained stagnant.
“Although FMCG growth in Quarter 4 continued to show recovery the market is no longer expected to have double digit organic growth,” said Ms. Nguyen Huong Quynh, Executive Director - Retail Measurement Services at Nielsen. “The volatility presents a lot of challenges for manufacturers to make sound decisions to fully seize market growth opportunities and drive a profitable business.”
According to Ms. Quynh the rising rural population has been a new source of growth for many manufacturers.
Last year FMCG sales in rural area grew a significant 5.5 per cent, mainly led by volume growth of 5.5 per cent. Rural areas are home to 68 per cent of Vietnam’s 90 million people and contribute 54 per cent of FMCG sales.
Further, rural habitants have been investing more in education and enjoying income growth of around 44 per cent over the last three years. “Yet these potential opportunities remain largely unknown to many businesses,” Ms. Quynh added.
The Market Pulse report is based on the results of the Nielsen Retail Measurement study of FMCG operations in major categories. The Nielsen Retail Measurement provides continuous tracking of product movement through defined retail outlets. The data are used to measure manufacturer and retailer effort as well as consumer off-take.