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FMCG growing in urban and rural areas

Released at: 18:13, 15/08/2016

FMCG growing in urban and rural areas

Photo: Duc Anh

Growth eases in rural areas but promise remains.

by Phi Yen

Vietnam’s fast-moving consumer goods (FMCG) market is posting growth in both urban and rural areas, according to the latest report from Kantar Worldpanel Vietnam.

Growth in the urban market, which includes Ho Chi Minh, Hanoi, Da Nang, and Can Tho, is rising while growth in the rural market has eased. For the one-year period ending on July 17 the urban market grew 4.3 per cent year-on-year, much higher than the 1.7 per cent in the previous period, while the rural market grew 4.6 per cent, down from 8.5 per cent.

Source: Kantar Worldpanel Vietnam

In the short term both urban and rural have seen positive performance.

Source: Kantar Worldpanel Vietnam

Packaged Foods and Dairy lead growth in Urban and Rural, respectively, while Home Care continues to decline in Rural.

Source: Kantar Worldpanel Vietnam

Mini-stores have shone brightly, with double-digit growth in urban

Source: Kantar Worldpanel Vietnam

Buyer numbers is the key driver of brand growth, with the number of times they buy having little impact.

Growth in FMCG in six key cities, including Ho Chi Minh City Hanoi, Hai Phong, Can Tho, Nha Trang and Da Nang hit a three-year high in the second quarter of 6.3 per cent after coming in at just 3.6 per cent in the first quarter, according to Nielsen’s Market Pulse report released on August 10. The six key cities saw strong momentum in FMCG growth in the quarter, mainly driven by an increase of 5.2 per cent in volume growth.

Despite the potential, expanding into rural areas in Vietnam also poses many challenges, in particular the high cost of serving geographically dispersed districts, Nielsen noted.

Vietnam’s consumer price index (CPI) rose a modest 0.13 per cent month-on-month in July, the lowest increase since February, the General Statistics Office (GSO) announced. The year-on-year figure was 2.39 per cent. In the first seven months of this year it grew 1.81 per cent compared with the same period last year.

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