FMCG

An integrated
update of Vietnam’s
in-home FMCG
Q2 2023
(12 weeks ending 18/06/2023)
Monitor
Urban 4 Key Cities & Rural Vietnam
By Worldpanel Division
 Executive summary

Total FMCG growth is More than a quarter Brands should

experiencing of households are continue to focus on
Vietnam’s GDP experiencing optimising presence Promotions may
growth in Q2 picks up downward
financial difficulties. across channels and impact shopping
to 4.14% while momentum, despite
Reduced consumer platforms in order to choices differently in
inflation cools inflation cooldown. In
spendings are more reap the benefits of various categories. Do
down.The economic both Urban 4 and
likely to occur on out- omnichannel you know how much
picture remains Rural, non-food
of-home activities strategy and reach uplift from promotions
lackluster with retail sectors thrive in
while the essentials more customers is helping your brand?
sales growth slowing. purchase volume.
are less vulnerable. while providing a
seamless experience.
Macro economy Spotlight of
FMCG overview Retail landscape the Quarter
Pressure
groups
Vietnam’s economy facing challenges in the remaining months of the year
Vietnam's Q2 growth picks up to 4.14% but remains lackluster. Inflation cools down; however, retail sales growth is slowing
as a result of weakened domestic demand as a proportion of consumers are impacted by rising costs of living.

% Change vs the same period last year

GDP CPI Retail sales of consumer goods

& services
13.7 42.5

7.7 4.4 4.2 19.5

5.9 3.3 17.1
4.1 3.0 14.0
3.3 2.4
8.8

Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23

Source: GSO
 Consumers' perspective
Consumers’ concerns on increasing costs continue to escalate, alongside with worries about job and income stability.

Currently what do you consider to be the biggest concerns you and your household is likely to face?

Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023

80
71
70 68 66
63
% Key Decision Makers Agree

58 57
60
53 51
50 45 45
40 40 40
40 37
34
31
28 27 28 29
30
23 23 24
18 16 18 19 18 19 19
20 16 17 16
14 15 15 15 14 14 14
10

0
Disease / Sickness Food Safety HH Income Increasing costs Job security Environmental Price of Oil Natural Disaster
Pollution

Source: Worldpanel Division | Lifestyle Survey | Urban Vietnam 4 key cities

 Consumers' perspective
28% households are struggling with their financial situations, increasing significantly from 1 year ago and pre-Covid time.

Pressure groups
How do you evaluate the current financial situation of your Household?
(% contribution of each group)
Under the impact of the
current macro economy, there
19 20 21 24 28 28
has been a significant rise in
Struggling
(not doing well) the number of households
facing financial difficulties in
the last 3 years.
Managing 59 53 54
53
(comes out correctly) 52 52

Comfortable
22 27 25 23
(no worries) 20 20

Q4 2019 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023

Source: Worldpanel Division | Lifestyle Survey | Urban Vietnam 4 key cities

 Consumers' perspective
Eating out and Entertainment are the categories more likely to be affected while Food and necessary products are at
lower risk.

Which category do you consider reducing spending on?

(% respondents)

OOH Entertainment Eating out Household appliances Transportation Daily food Cosmetics

66
51 57
46

19 23 19 18 12 12 6 7
Q3'22 Q2'23 Q3'22 Q2'23 Q3'22 Q2'23 Q3'22 Q2'23 Q3'22 Q2'23 Q3'22 Q2'23

Source: Worldpanel Division | Lifestyle Survey | Urban Vietnam 4 key cities

 Consumer confidence is slowly coming back
It could be driven by some economic recovery and positive news they are exposed to. It would take some time for them to
spend money more comfortably again.

Financial confidence level

In the upcoming 12 months, your family financial situation will improve
(% respondents)

59 59
53 52 49
45 48 46 45 48

Q4 2019 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023

Source: Worldpanel Division | Lifestyle Survey | Urban Vietnam 4 key cities

 FMCG
% Change vs YA
overview 20 20
15
15
Although inflation is 15 11
8
showing signs of 10 5
7 10
cooling down, the total 3 6 5
value of household Urban 4 5
8
6
7 5 5 0
key cities
consumer goods is 0
3
-5
-2 -2
experiencing
-5 -10
downward Q2'22 Q3'22 Q4'22 Q1'23 Q2'23
momentum,
suggesting future
% Volume change % Ave. Price Paid Change % Spend change
growth may
decelerate.
20 17 20
15 14
11 10 15
15
7 10
4
10 9 5
4
9 0
5 10 10
7 -5
Rural 3
5
0 -10
Q2'22 Q3'22 Q4'22 Q1'23 Q2'23

*: To calculate FMCG volume change, we calculate how much volume contributes to the value change for each category, sum up these contributions and relate to value YA (this results in an average category change in volume)
**: To calculate FMCG price paid change, we calculate how much price contributes to the value change for each category, sum up these contributions and relate to value YA

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG including Gift
 Behind the movement of in-home consumption

Cutting Out-of-Home Emerging channels lead The rise of smaller

spending the growth manufacturers
(% value change Q2 2023 vs YA – Urban 4) % value contribution – Rural

57-66%
Top 50 manufacturers Others
Mom & Baby
57
Chain
37 40 +20%
of households agree on Social Commerce 30
vs YA
intention to reduce
“Eating Out” and “Out-of- Modern Trade
17 63 60
Drug Store
Home Entertainment”
E Commerce 14
Q2 2022 Q2 2023

Source: Worldpanel Division | Households Panel & Lifestyle Survey | Urban 4 Key Cities & Rural Vietnam | Total FMCG
 Sector The growth of the Beverage sector has slowed, mainly due to a fall in volume. Meanwhile, the personal care
sector is still showing strong growth in almost all categories from daily care to makeup and skincare. Dairy
performance also records impressive growth, driven mainly by rising average price paid.
% change in Q2 2023 vs YA
% Spend change % Volume change % Ave. Price Paid Change

12 14 12
15 10 12
10 8
6 6 6 5
Urban 4 3 4 3 4
5 2 2
key cities
0
-5 -2 -1
FMCG Dairy Beverages Packaged Foods Personal Care Household Products

FMCG Dairy Beverages Packaged Personal Home

Foods Care Care

30
19 20
20 16
10 7 10 8 7 4 4 10 9
10 4 2 4
Rural 1
0
-10 -1 -3
FMCG Dairy Beverages Packaged Foods Personal Care Household Products
*: To calculate FMCG volume change, we calculate how much volume contributes to the value change for each category, sum up these contributions and relate to value YA (this results in an average category change in volume)
**: To calculate FMCG price paid change, we calculate how much price contributes to the value change for each category, sum up these contributions and relate to value YA

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities Vietnam | Total FMCG including Gift
 Businesses are focusing on expanding their presence across multiple channels and platforms to harness the potential
Retail of online channels and meet consumers' desire for seamless and convenient shopping experiences. Shoppers are
increasingly inclined towards online shopping and smaller modern trade formats thanks to the convenience and an
landscape expanding variety of products they offer.

% Value contribution of channel % YOY value change by channel

100
Online 48
7 7 24 21 22
90 8 7 7 7 16 19

13 12 11 11 11 11
80 14
Hyper + Super -2 7 1 6
-9
70 10 11 11 12 11 13
6 6 6 6
60 6 7 Mini Store
7 7 20 21 22 27 23
7 7 6 7
-20
50
30 21 29 21
40 Specialty Stores
-12 -14
30
54 53 52 51 53 51 97
Wet Market -17 -12 29 6 3
20

10
Street shops 12
0 5 4 3 5
-3
Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23
Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23
The rest is other channels, including hand-carry, direct sales, factory outlet,…)

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities Vietnam | Total FMCG excluding Gift
 Online shopping is no longer for Urban and young shoppers only. It has witnessed significant development,
Retail transforming the retail landscape and reshaping shopping behavior of everyone and everywhere.

landscape

Online shopping development overtime

Urban Vietnam Rural Vietnam

51 50

40
Penetration 26
29 21
18
22 Frequency
13 11
7 7 3 6
4 5 3 3 3
3 4 2 2 2
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities Vietnam | Total FMCG | Online
Promotion Seeking: Impact on shopping choices
Consumers are actively comparing prices even between stores to find the best deals, which creates great momentum for
overall FMCG growth. Yet not all categories gain benefits from a promotion push.

100.0
More promotion – More promotion –

49% I refer to many different stores category decline category growth

80.0

% Growth - volume purchased under

to find attractive promotions.
+12% 60.0
vs 2020

40.0

promotion
% Volume FMCG growth 20.0
3 months ending May 23 vs YA
0.0

-20.0
Not purchased
Purchased
under +32% under +1%
-40.0
promotion promotion
Less promotion – Less promotion –
-60.0 category decline category growth
-15.0 -10.0 -5.0 0.0- total5.0
% Growth 10.0
category 15.0
volume 20.0
growth 25.0

Source: Worldpanel Division | Household Panel and Lifestyle survey| Urban Vietnam 4 key cities
 Loyalty and Promotions
Promotions may help shoppers meet the need for saving, yet partially lead to lower brand loyalty. Every promotion will
uplift sales in different ways in different channels. Do you know how much of the uplift is helping your brand?
An example of Promotion Mechanic – Powder
Detergent in different channels What is incrementality and what is not?
Hypermarket Supermarket 2 examples among 6 factors of incrementality
25% Low value uplift High value uplift
High incrementality High incrementality

20% Week 3
Week 1 Week 2 PROMO Week 4 Week 5
Discount
15% Gift non FMCG
ACTUAL
INCREMENTALITY
Incrementality value

10% Buy 1 get 1 Buy 1 get 1

Gift FMCG STOLEN

5%

0% Gift FMCG

-5% HURT THE BRAND

-10% Discount Gift non FMCG DISPLACED X

-15%
Low value uplift High value uplift
-20% Low incrementality Low incrementality
20 40 Actual
60value uplifting
80 vs normal days
100 120

Source: Worldpanel Division | Household Panel | Promotion Optimizer

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Contact us
Jane Ha – Senior Marketing Manager
Worldpanel Division, Vietnam
E: Jane.Ha@kantar.com
58 Vo Van Tan St., Dist. 3, Ho Chi Minh City, Vietnam