Kantar Worldpanel VietnamInsightEbook2021 FINAL
Kantar Worldpanel VietnamInsightEbook2021 FINAL
Kantar Worldpanel VietnamInsightEbook2021 FINAL
Introduction
Welcome to Kantar’s Insight Ebook 2021, the other economies experienced a negative
special edition. performance. However, it was still a very tough
year for Vietnam with not only COVID-19 but
I know all of us still face many challenges also other disasters hitting the country during
caused by the on-going COVID-19 pandemic. the year such as droughts, storms and floods,
The escalation of the situation globally slowing down the economic development with
has resulted in many uncertainties and a 30-year low.
A message from unpredictable effects on economic and
Fabrice Carrasco
Managing Director, Vietnam & Philippines
Asia Strategic Projects Director
1 Worldpanel Division, Kantar
Introduction
2020 will be a year that nobody forgets. market during 2020 are the acceleration of
Globally, the pandemic impacted our lives and online shopping and the evolution of retail
daily routines, which were thrown upside down landscape toward modern formats, the higher
thanks to mass lockdowns and the resultant priority on health and wellbeing but from
public health crisis. reactive approach to proactive health care
and the shift to value and essentials among
We see Vietnam’s GDP growth stutter with an Vietnamese consumers amid the COVID-19.
Dear Friends increased concern for job security, and lower
Peter Christou
Commercial Director, Vietnam
2 Worldpanel Division, Kantar
Table of 9 Things to
Remember in 2020 04
Outlook in
2021 and beyond 47
Vietnam Economy: Optimistic for 2021 48
Prospects for FMCG: A Regional Perspective 49
What’s Next for Health & Well-being? 50
Tet Gifting Evolution 51
Quality Assurance 52
About Kantar
3 & Contributors 53
9 Things to
Remember
4
in 2020
Vietnam economy
sustained growth
amid COVID-19
5
GDP growth - World Bank’s forecast
While most countries are still in different
levels of lockdown with a continued increase
of new cases, businesses and activities in
Vietnam have resumed operation since early
quarter 2 thanks to well coping with COVID-19
pandemic from the very beginning. As such,
Vietnam economy currently shows strong
5
growth patterns, particularly in the last two
quarters of 2020, making it become one 2.8
2.5 2 1.9
of the few economies sustaining a positive
performance in 2020. 0.2
0
percent
Vietnam, resulting in the deceleration of GDP -2.5 -1.5
growth as the lowest growth rate over the -2.8
-4.4
past 10 years, it is still considered as a success -5
s
a
ar
sia
sia
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and income. This holds promising prospects for
os
na
bo
ne
pi
la
ay
in
or
ilip
La
ai
Ch
et
m
do
ya
al
W
Th
Vi
Ca
Ph
In
M
Vietnam in 2021.
6
Bright economic
outlook in 2021 Vietnam’s Economic Outlook
• FDI was hit hard in 2020. However, given the successful 24.5
24.2 GDP Growth % Retail Sales of CPI
Consumer Goods
containment of COVID-19 in Vietnam together with the
vaccine rollout plan at global level, Vietnam remains a
18.7
potential destination to invest in.
16.0
• In the first three months of the year, almost 35,000 12.6 12.0 12.4 12.7
8
Top concerns among Vietnamese Under the context of the health crisis, there there are different effects of COVID-19 on
are emerging concerns among Vietnamese each group (income, region, age, etc...).
households under COVID-19 consumers. They more worry not only about This will be reflected on how they respond
(Rank change vs Q4 2019)
health but also about the financial situation and behave differently in the coming time,
and the rising cost of living as a result of the leading to a polarization and divergence of
economic impact of the pandemic. This will preferences and choices. Some of the trends
considerably influence their priorities and we could expect to see as the situation evolves
spending habits in 2021. are down-trading and more belt-tightening for
9 Source: Worldpanel Division | Households Panel | Urban Vietnam 4 key cities | Updated to Q4 2020 Source: Worldpanel Division | Households Panel | Urban Vietnam 4 key cities
In the upcoming 12 months, do you The lower income, the more sensitive and
think that the financial situation in worried they are. The products/services
your house… targeting to this group of consumers can focus
more on the messages about affordability/
value for money to win consumers’ hearts.
% Agree in Urban 4 key cities How do you evaluate the current financial
situation of your Household?
3 7 9 8 5 8 7 4 3
16
21
29 29
41 30
36
45 43 43
44
47
50
47
49
48 43
41 40 42
33
22
12 6 12 10
8 7 7 7 7 6 7 3 8 8
Avg 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Total HH HH Income HH Income HH Income HH Income
<=10mln >10 - <=17mln >17 - <=26mln <26mln
Will get Will get worst Will remain the Will slightly Will strongly We are not We need to It comes out We have enough No finacial
much worst same improve improve doing well deprive ourselves correctly money to allow worries, we
at all sometims us some extras don’t need to
once in a while pay attention
10 Source: Worldpanel Division | Households Panel | Urban Vietnam 4 key cities Source: Worldpanel Division | Households Panel | Urban Vietnam 4 key cities | Updated to Q3 2020
Higher Priority
on Health
& Immunity
11
As lifestyle diseases (e.g., obesity, stress)
1
become commonplace, health rises to be a Vietnamese consumers are eating and drinking plant-
top priority among Vietnamese consumers. based alternatives that are perceived to be natural and
With the accessibility of health information healthier. The category enjoys healthy growth, which is
online, consumers deepen their understanding driven by both buyer base expansion and consumption
of health and more cautious about anything uplifting among current buyers.
they consume. Appearing at the end of 2019,
2
Covid-19 has a great influence on health Being more aware of potential health problems, Less/
perception and budget of consumers, which No-Sugar products are increasingly chosen and become
leads to the some major changes in Health- more attractive. Liquid Milk, RTD Tea, CSD and mostly
related trends. recently is Soya Milk witnessed an impressive performance
of total Less/No-Sugar segment.
Of all the drinking motivations, Health
accounts for 13% with very diverse needs.
3
Besides improving health, new motivations are Consumers are now consciously and actively managing
emerging including detox, skin beauty, support their diet to prevent illness and stay healthy –incorporating
digestion. Three key trends in nutritional health boosters. In a year upended by COVID-19, it seems
market are believed to become norm one day: as if our immune systems have received more attention
plant-based nutrition drinks, sugar reduction, than ever before.
and immunity boosters.
12
Towards
What’s driving this trend? Drinking motivation?
Healthier
79%
13%
Consumption
• Improve Health
• Detox
• Support Digestion
• Sleep Well
• For Skin Beauty
of Vietnamese agree they are
• Control Weight
ready to pay a higher price for
As lifestyle diseases (e.g. obesity, stress) healthier foods (2019)
87%
15% Who?
become commonplace, health rises to be
a top priority among urban Vietnamese
consumers. Of all the drinking motivations, Female, age group of
Health accounts for 13% with very diverse of Vietnam’s 95 million population
Health motivations 19-34 and above 45+
YO have more health
needs. has mental illness due to stress,
Other motivations drinking purpose
especially amongst the youth for
stress in work or school (2019)
Source: Kantar Worldpanel | Drinking Usage Study 2019 | Vietnam 4 key urban
13 cities | Non alcohol beverages and Nutrition - VnExpress, Vietnam Insider
1. Plant Based
Category performance Top Growing Segment
47.3
+5.1
48.5
+13.2
50.9
value share % | value growth %
+17%
12.9
+342% 11%
12.1 12.1 6%
Regular/everyday drink 26 64
While having meal 24 218
Doing activities 21 139
Break from work/study 11 114
Doing housework 4 131
While working/studying 4 76
Drink after work 2 76
Source: Kantar Worldpanel | Household Panel & Drinking Usage Study 2019 |
14 Vietnam 4 key urban cities | Plant-based drinks | MAT
2. Shifting
Liquid Milk - %Volume % No/less sugar buyer
among RTD Tea buyers
11.1
“I prefer to buy low/ free
sugar drinks” - % Agree
3.3
71
63
Probi less sugar and Probi light (less fat) 2010 2019 Soya milk less sugar variant MAT Q3’19 MAT Q3’20
17
More hygiene-
With sudden changes in daily hygiene routine Natural ingredients and environmentally
in light of the Covid-19 pandemic the personal friendly products might not have been the
care market has been reshaped in 2020 as we buzz this year across FMCG categories.
still in consideration.
and sanitizing several times a day are still the safe to say that this trend is not completely
number one way to protect oneself from this out of mind and it is likely to be back this year
pandemic. As a result, basic hygiene habits as consumers will ultimately pay even more
have been magnified and consumers have attention to the end benefits of ingredients
been seeking more for anti infection products impacting to their body or the planet.
as a contributing effort to prevent any risk of Brands should therefore continue to focus on
disease. Hand sanitizer flew off the shelves communicating end benefits and well-known
as what has become an ‘essential’ Covid-19 source to trigger attention.
sanitary item and alongside this hand and
body soap also soared.
18
Growing demand
for personal
hygiene products
Hand Wash Sanitizer Shower Gel
An incremental of 442k
Households
An incremental of 541k
Households
32% 1.7%
2019 2020 2019 2020
Hand wash:
be ready, be positive Keep engaged by creating digital contents with
positive messages
• Category growth
• Engaged with current situation: COVID-related ads & in CPR: +340%
communications, “Tram rua tay da chien” campaign
which provides hand sink and hand wash across Vietnam
by invite consumers to participate in donating through
dance competition “Ghen Co Vy”, new launches:
antibacterial wet tissues and hand sanitizer to capture
rising consumer need for hygiene and health prevention. Fast response to emerging consumer needs with new
launches: hand sanitizer, wet tissue
60 59
55
Wave 4
52
49
50
40
40
35
33
31
29
30
24
20
10
0
Increased Eat healthier Spending time Online shopping Using online Focus on Working from Connecting Social media Reading
overall hygiene with the people in media my personal home virtually apps usage
my household development
21
The Rise of Nature/
Nature/ Sensitive across Home Care
CRP growth (%) in FY20 vs FY19
170.9
Sensitive Segment
Total Category
Nature/ Sensitive
in Homecare -1.7
5.9
0.9
38.1
-5.0
Detergent Dishwashing Liquid Fabric Softener
Nature/ Sensitive segment has gained traction across Top Segments converted by Nature/ Sensitive
major homecare categories, driven by up-trading economy
users and converting fragrance lovers.
22 Source: Kantar – Worldpanel Division – Households Panel – Urban 4 key cities – Excluding Gift
Online FMCG
Shopping Habits
Updates in 2020
23
Online remains one of the fastest growing Channel basket and spend shift account for
channels for FMCG in Vietnam. More and a significant portion of online growth but
more families adopting this channel as part not only! Incrementality within the channel
of their FMCG shopping habits is the main (i.e., the same shopper repeats its purchase
driver behind this expansion and the Covid-19 within the channel and spend more) is also
outbreak this year clearly acted as a catalyst. important for non-food categories. This
Even post the first waves of panic purchases, indicates that new shoppers’ attraction and
when shopper channel choice is returning to shoppers’ loyalty are both equally important
normal, online maintains. in driving online value growth today.
Close to 5% of FMCG annual value spent is Considering the growth of online and that it
now generated by online shopping habits and does help in getting incremental growth, it
this will continue to increase in coming future is a channel which any manufacturer should
given current context combined with the keep focusing on and adapt their strategy as
rapid expansion of the competition and offer it evolves. Promotion is one of the key drivers
to attract shoppers. Personal Care products for shoppers to shop online hence offering
enjoy highest penetration and frequency today attractive and disruptive schemes together
within the channel. However, purchase for with engaging product display and stories are
Home Care products have started to take off likely help build online penetration further.
as well. In fact, Home Care categories lead for
the spend growth within online over the past 2
years.
24
Vietnamese households shopping for FMCG Online keeps
expanding and Covid-19 outbreak this year acted as a
catalyst. As penetration shoot up this year, when comparing
Vietnam with other SEA countries, a 6% gap has opened up
versus Thailand.
25 HCMC Urban (4 cities):
Online – FMCG Penetration % - 12 w/e
Hanoi
34.5% MAT Q2’20
20
Rural
15
Urban:
10
28.2% MAT Q2’20
Urban:
buy FMCG
online today?
• Convenience.
• Wide/ better range of choice.
• Attractive and unique deals.
• Price comparison.
• Availability of information.
4.8
10%
Online shoppers
The remaining
90% is spent in
spend Online
other channels
4 Fragrance 4 Shampoo
27
An In-depth
The main source of FMCG E-commerce growth The future growth of FMCG Ecommerce
In the past, Ecommerce platforms sell more niche, high Penetration in FMCG Ecommerce still has room to improve
Understanding
end and imported products in China, but now the price from the current 70% mark, especially among older
gap between online and offline has increasingly narrowed. demographics and consumers living in lower tier cities and
As more and more consumers are used to buying their rural China. Additionally, Ecommerce is not only considered
of China
daily essentials through online channels, it presents more as a sales channel, but a key marketing channel for brands
cannibalization to brick and mortar stores. However, the as they start to build innovations out of this channel
online channel still generates sizable incremental sales i.e. live streaming or short videos to engage consumers
E-commerce
especially on emerging products and categories. and also provide a holistic place for social media and
content marketing. Brands will be able to fully digitize
Along the development of Ecommerce from expansion to their consumer experience journey throughout the wider
maturity stage in China, we will likely observe an increasing Ecommerce ecosystem, helping them achieve successful
convergence of offers. Some brands will reduce their
One of the world’s most physical store presence and put their focus mainly on
brand building and shopper acquisition at the same time.
advanced Ecommerce market Ecommerce platforms. On the other hand, as consumers buy more categories
online from tier 1 group to tier 2/3 group, it means an
The increased diversity of online repertoire. expansion in their basket size and shopping frequency.
With a lot of online promotions pushed through
In addition to non-FMCG items such as fashion, electronics, Ecommerce festivals like Double 11, their spending on
etc., FMCG products like baby care and cosmetic FMCG via online channel will further increase.
categories (skincare, makeup) are still tier 1 categories with
highest penetration in China. However, the COVID-19 crisis
boosted their online penetration by an unprecedented
seven percentage points or more, according to Kantar
Worldpanel China’s data in 2020. Furthermore, we are also
seeing tier 2/3 categories such as personal wash, paper
Jason Yu
Managing Director, Greater China
products and hair care products rapidly growing through
Kantar Worlpdanel online, indicating an enormous potential to further expand.
28
Polarizing Health
& Beauty Market
29
COVID-19 has transformed 1 Growth Categories
the beauty industry • Sectors that are doing better than before the pandemic
due to increased awareness of hygiene, including
%Value
Growth vs
+63% +25% +55%
YA Penetration % in Personal Care 2018 2020
32.4
25 29.7
19.3
19
16.5
12.2 14.5
10.5 8.1 8.2
9.5
4.1 4 4.4
5.2 2.3 2.7 2.8
0.7 0 1.7
2018 2020 2018 2020 2018 2020 Online Social Commerce E-com Lazada Shopee Tiki Sendo Others
33 Source: Worldpanel Division | Household panel | Urban 4 key cities | Personal Care excluding Gift
Growing
Sustainability
Concern
34
Did you know?
However What stops Manufacturers
Vietnamese are expected
consumers from the most to take
living more green? action in reducing
environmental
A quarter of Vietnamese consumers say
recycling is inconvenient.
impact.
• Barriers in
Vietnam is the world’s 4th largest And a half say knowledge.
marine plastic polluter with 50 “It’s too confusing
to know what can • Their belief that Manufactures
billion plastic bags used per year. be recycled.” environment is 4
= 10 plastic bags / week / person. not that bad.
25 44
Government
• Barriers in Consumers
distribution and 29
Barriers
Consumers frequently go price in reaching Retailers
on a grocery shopping green products.
79% trip without their bag/
basket to carry their
+80% People agree
Some already did a good job.
purchase.
Food safety, plastic waste and water pollution There is already a high awareness that Unilever’s
Vinamilk
are the top 3 concerns among Vietnamese recycling will reduce pollution and safe refill station
people. However, they still find it hard to natural resources.
change their habit of using plastic. Eco-friendly
Nestle
packaging
Vietnam
#2
The number of consumers can
recall brands that they are doing
What’s Stronger, authentic communication
about the good deeds to drive
good deeds for the environment next? awareness.
are still limited.
#3
Sustainability is NO LONGER JUST A
NICE THING TO DO and should be a
critical part of any business strategy
moving forward.
37
Modern Trade is % Value share % Value growth
13.5
All retailers
9
10
8
in Rural, especially
Traditional trade
9
8
Street Shops
9
Minimarket with
3
76.3 75.7 75 Wet market
0
17
Specialty stores
spend/trip is almost as
65
40
Modern trade
33
much as Urban
2018 2019 2020 Hyper & Super
33
11
Street Shops Wet Market Specialty Stores 82
Minimarket
***
Direct Sales GT Others Modern Trade
37%
+4.7 pts (vs. MAT P9’18)
5.9
(Urban: 27 times/year)
166k (2.2X Traditional
Urban: 87.3% Trade) +10% vs. year
ago (Urban: 171k)
Source: Worldpanel Division | Households Panel | Rural Vietnam | Total FMCG excluding Gift | Data updated to
38 September 2020
Additionally, minimarkets Minimarkets - % Penetration
further surge Shopper base are x6 within 2 years, acquiring more than 2
households.
million new rural
Source: Worldpanel Division | Households Panel | Rural Vietnam | Total FMCG excluding Gift | Data updated to North 0.6 Central 15.2 South 33.5
39 September 2020
Interestingly, the channel % shoppers in Minimarket
by demographic
appeals to all demo 30
advantages
10
5 2019
0 2020
Key Advantages
Product assortment Product assortment
41
The Role
of Gifting
42
Giving gifts on Tet Festival (aka Lunar New Year) has been
a traditional custom in Vietnam’s ancient culture for years,
expressing not only the gratitude towards someone but
also the care to each other. As a result, consumer spend
on gifting accounts for a significant proportion of total
FMCG spend during Tet period. However, we witness the
reduction of gifting occasions last Tet 2020, which could be
explained by the changes in consumer lifestyles towards
modernization.
43
Although Gifting % Value growth of Gifting across years
(Tet period vs YA)
40
of gifting remains
10
0 Rural
-20
Tet 2017 Tet 2018 Tet 2019 Tet 2020
29%
to others in the
2 - Biscuits/ Candy Jam
3 - Alcoholic drink
4 - Mixed basket gifts
Rural
82%
+10pts vs Tet 2020
Top 5 Gifts at Tet 2021
1 - Money
2 - Biscuits/ Candy Jam
3 - Soft drink
4 - Alcoholic drink
5 - Fresh food
Source: Worldpanel Division | Households Panel | Urban 4 key cities & Rural
45 Vietnam | Tet 2021 Survey
Top 5 most chosen Top rising categories for
categories for Tet gifting Tet gifting
Based on % Occasion Based on % Occasion change
Cooking Aids
Source: Worldpanel Division | Households Panel | Urban 4 key cities & Rural
46 Vietnam | FMCG Gifts only | Tet 2020
The Shift to Value
& Essentials
47
Vietnamese consumers experienced an abnormal year with
many limitations, in social and financial matters.
Schools were closed for months. Work was shifted to home.
Similar to other countries, consumers in Vietnam did shift
their spending to essentials, while cutting back on most
discretionary categories, especially travel. Engagement in
out-of-home activities is also lower even after restrictions
had been lifted.
48
Spending cut on URBAN 2018 2019 2020
Household
4.5 4.5 3.9
Transportation
Household
0.9 1.0 1.1
Entertainment
Household Travel
1.6 1.6 0.8
/Holiday
49
FMCG as considered % YOY FMCG change
6% 6%
2%
and rural, mainly driven 2018 2019 2020 2018 2019 2020
consumption. Meanwhile,
7% 7%
6%
4%
4%
0%
the price change is even 2018 2019 2020 2018 2019 2020
2.9% 3.0%
2.4% 2.6% 2.5% 2.7%
*: To calculate FMCG price paid change, we YA**: To calculate FMCG volume change, we calculate how
calculate how much price contributes to the much volume contributes to the value change for each
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities & Rural value change for each category, sum up category, sum up these contributions and relate to value YA
50 Vietnam | Total FMCG excluding Gift | 1 year ending 3/01/2021 these contributions and relate to value (this results in an average category change in volume)
Switching to lower priced offers is a way to manage the
spending budget on FMCG in this difficult time. Nearly 60%
FMCG categories are suffering downtrading, including both
Food and Non Food categories
% Value growth
80%
60%
40%
20%
0%
-15% -10% -5% 0% 2% 5% 10% 15% 20% 25%
-20%
% Price change
-40%
-60%
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities & Rural
51 Vietnam | Total FMCG excluding Gift | 1 year ending 3/01/2021
The shift to value
Saving offers/ Vinmart+ +43% value
Vinmart +33% value
messages are
emphasized a lot by
many brands to stay
relevant to consumers
Kokomi 90 – 20% bigger
with same price
52
Outlook in
2021 and
53
Beyond
Vietnam economy:
• IMF predicts the Vietnam economy will • According to local predictions, GDP growth
expand 7.588% in 2021, which is even higher is projected to recover at 6-6.9% in 2021
compared to the level of pre-COVID19. as the most optimistic scenario.
Challenges
Scenario 1 Scenario 2 Scenario 3
GDP growth at GDP growth at GDP growth at • Border closures still have a significant impact • Increasing environmental issues as businesses
on trade, supply chains, consumer demand and activities resume & unsustainable
54 Source: GSO
Forecasting Urban 4 key cities FY Growth Rates Growth of packaged foods is expected to
cool, but still at 10%, while personal care is
predicted to grow at double digits in Urban
11.4% 12.1%
10.3% 9.8% 10.1%
7.9% 8.5% 6.9%
6.4% 6.4%
• The forecasting model includes 6 metrics that have 5.3% 4.9% 4.6% 4.4%
2.2% 2.7% 1.5%
different weights of the impact on FMCG sales.
1 - Inflation Rate 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021
2 - Food Inflation
3 - Residential Mobility
4 - Consumer Spending Rural FY Growth Rates In Rural, personal care potentially continues to
5 - GDP Growth Rate drive growth, while Beverages recover
6 - Consumer Confidence Index
In-home FMCG Beverages Dairy Packaged Grocery Personal Care Home Care
• Our belief that COVID outbreak contained, and with Sector Value 100% 24.1% 23.8% 30% 13.1% 9%
Contribution
vaccination being globally distributed that things will not 16.6%
14.6% 14.8%
get worse, and that both consumer confidence and GDP 12.6%
13.6%
12.2%
growth will improve 11.4% 11.1%
10.2%
8.6% 8.7% 9.1%
7.3%
5.6% 5.4%
• For other metrics, we believe they will be the same as 5.2%
4.3%
today or will make insignificant impacts on the results 1.4%
given the local context and circumstances. 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021
Inflation Rate (SQ = 1.4%) Residental Mobility (SQ = -3.6) GDP Growth Rate (SQ = 6.4%)
Status Quo Status Quo Slightly Increased
Food Inflation (SQ = 3%) Consumer Spending (SQ = 4074091 VND Billion) Consumer Confident Index (SQ = 120.5)
Status Quo Status Quo Slightly Increased
55 Source: Worldpanel Forecasting model & Trading Economics | FMCG data excluding Gifting
Prospects for
With a population of more than 90 million, Vietnam remains as a prime market
not only for continued local growth but also an avenue for regional FMCG
players to tap into. We have equally seen how the Vietnamese consumers and
FMCG: a regional
shoppers are improving not only their quantity but quality of life over the past
10 years, a real testament of a very proud nation, thriving to become one of the
leading markets not only in the Asia region but also Globally.
perspective Relatively a young consumer base, growing income per capita and increasing
sophistication of use in both mobile and tech puts Vietnam high on the
attractiveness index for investors, brands and manufacturers alike. In addition,
Vietnam also has a great geographic advantage bordering many Asia countries i.e.
China and also the emerging markets of Indo-China; giving it a massive advantage
as a country to not only build on local consumption but a hub to extend its
reach to other markets as well.
The country is now the 6th most populous country in Asia (behind China, India,
Indonesia, Japan and the Philippines); and could easily outpace to the 5th most
Nelson Woo
populous market in the region. Coupled with the improvements on standard of
Regional Commerical Director living and a positive growth in both organized trade and E-commerce, it is set to
Worldpanel Division Asia, Kantar
certainly be a market where every brand and manufacturer will not want to miss.
In 2020, Vietnam’s economic growth at 2.9% despite the very challenging year
of COVID-19 is a testament of the countries that are resilient and strong to cope
and weather the challenges in market. This has also given a strong competitive
advantage to Vietnam compared to other ASEAN countries – allowing it to leapfrog
itself and also giving a strong grounding and growth in the FMCG market.
The challenges manufacturers will face is how they can further drive growth
in a sustainable way amidst rising competition (both with local giants,
regional players and global MNCs) and with the new evolving multichannel,
omnichannel and trade landscape.
56
What’s Next for
Specifically, COVID-19 – the health crisis of the decade, forces consumers to have
behavioural changes in product choice. This could be brought forward post the
pandemic as new habits, new lifestyles. “Pandemic” basket is fueled with three
With healthier lifestyle, for instance, the increased spending on health & hygiene
products will likely to continue as people seek for prevention from the possibility
of another Covid-19 outbreak or the threat of any other viruses that might hit the
COVID-19 pandemic has put mental health and wellbeing world in the future. In that context, consumer demand on health and hygiene will
continue to thrive.
of Vietnamese consumers under great pressure, which
highlights the importance of health priority. In the past Consumers increasingly desire snack and beverages that can benefit their physical,
century or even before that, health is about taking medicine mentality or emotional wellness. They look for products with clear functional
benefits and brands with thorough communication on how they promote health
to treat an illness or taking recommended vaccines to and nutrition:
prevent certain diseases. From a fundamental understanding
of health in the past, consumers are broadening their - Safe, natural & proactive ingredients, nutrients
- Immune-boosting products i.e. probiotics, vitamins, supplements
knowledge with better accessibility of health information - High quality products with health benefits
online, and higher adoption of tech to track their health - Plant-based diet
and nutrition. Therefore, consumers are now shifting from - Premium options for eating & drinking & beauty i.e. organic, vegan
- More indulgence & enjoyment that good for mental health i.e. treats
reactive to proactive when actively managing their diet to - Pre-emptive solution for senior population
prevent illness and stay healthy – incorporating with health
boosters. Outlook for healthcare will be shaped by favourable trends and structural
developments. Health will be about taking snacks and beverages that are
personalised to suit one’s unique health needs, goals as well as knowledge level.
Areas that are related to digital health, genomics and extended longevity should
observe further upside potential over the longer term
57 Source: GSO
Tet Gifting
From distant past to present day, the custom of giving gifts during Tet festival has
become a typical culture, adopted by the majority of Vietnamese people. Giving
gift is not only a way to express love and appreciation among family members,
Evolution
friends or colleagues, but this also represents meaningful wishes for blessings and
luck. The latest survey reveals that almost every household (over 80%) intends to
buy gifts for others in Tet 2021, in which family members are the key recipients.
Gifting has played an important role in every Tet season, contributing a big
proportion to total Tet spending, especially within FMCG industry, though it differs
by sector and market.
Within FMCG basket, biscuits, beer and soft drinks are the top choices of
Vietnamese consumers for Tet gifting. These categories sales during Tet month
usually double and even triple that of a normal month, largely contributed by
gifting occasions. Yet, people have a lower intent to spend on these categories
compared to Tet 2020, according to the survey, while organic or health-related
categories such as nutrition drinks, snack & nuts are quickly capturing consumer
preference. This trend is predicted to be more and more prevalent as health
will be more prioritized after the health crisis. In addition, premiumization and
customization are also the trends that will continue thriving in the next seasons,
reflecting from product innovation to communication in order to meet
the growing taste of Vietnamese consumers.
Noticeably, we see that Tet-gifting custom is getting more simplified recently. Last
Tet 2020, gifting experienced a significant decline in both value and occasions. It
could be the result of consumers’ fast-changing lifestyles towards modernization,
especially in urban areas. Interestingly, there is also a correlation between the
family structure (the number of members) and the number of targets they want to
present gifts: “The smaller household size, the less targets for gifting”. As such,
this could lead to a continued deceleration of gifting in the coming years, given
that Vietnam’s household size is shrinking over time with more younger families
having one or two generations. Nevertheless, Tet-gifting culture will probably stay
here for many more years, providing a great opportunity to leverage brand growth.
58
Quality
Quality assurance has been an increasingly prominent concern amongst
Vietnamese consumers, especially in food industry. There are several drivers of this
trend. In the context of growing middle class in Vietnam, the willingness to pay
Assurance
for higher quality products is accelerating. In the last decades, Vietnamese
government has been issuing more regulations on food safety that also increases
consumer awareness about product quality. Moreover, with the development of
social media and Internet, negative news and the followed media coverage can
spread like wildfire. This is only one of the many reasons why manufacturers need
to ensure that their production lines utilize the latest technologies and methods to
proactively avoid any incidents.
In the past, quality was assured mostly by brand names. Consumers were relying
on their own experiences or on what were recommended by people around them.
They bought the products from well-known brands without the intention or the
accessibility to check more information about the products from various sources.
Communication from manufacturers played the vital role in building
consumer trust.
Quality currently is defined in a more complex way other than just brand names.
Consumers have the higher expectations when it comes to the production methods
and quality of the food, but also for packaging and other features of the product.
They are not afraid to walk away if these expectations are not met. Reliable origin
and production process are increasingly important to consumers. Prior to making
decisions, consumers are spending more time to search for in-depth information
about products from different sources, either from people they know or social
groups.
In the next few years, consumers might be looking out for clearer visibility of when,
where and how the products were sourced, produced and delivered to them. The
technology development allows manufacturers to give the consumers the full
transparency in producing process at all steps.
59 Source: GSO
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Asia Strategic Projects Director
fabrice.carrasco@kantar.com
60
Contributors
Fabrice Carrasco Peter Christou Nguyen Phuong Nga Antoine Louat de Bort
Managing Director of Kantar Worldpanel Commercial Director Senior NBD Director Account Director
Vietnam & Philippines
Asia Strategic Projects Director
Nguyen Thi Nhu Ngoc Vo Thi Kim Nhu Tran Dang Phuong Vy Nguyen Ngoc Thuy
Marketing Manager & Project Leader Senior Account Manager NBD Manager Associate Account Manager
Le Thi Ha Nhi Nguyen Van Vu Hoang Nhu Mai Nguyen Hoang Lan
Associate Account Manager Marketing Executive Account Executive Account Executive
Nguyen Anh Tuan Nguyen Phan To Nhu Pham Thi Hong Nguyen
Account Executive Account Executive Senior Commercial Admin Executive
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