Milk powder market reaches saturation in big cities, rural areas bring new opportunities

By Thanh Van, Thanh Nien News

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A woman selecting milk at a supermarket in downtown Ho Chi Minh City. Photo: Dao Ngoc Thach A woman selecting milk at a supermarket in downtown Ho Chi Minh City. Photo: Dao Ngoc Thach

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Market saturation have driven milk powder sales in Vietnam's key cities down by 11 percent between June 2014 and June 2015 compared to the same period in the previous year, a Nielsen report said Wednesday.
Hanoi, Ho Chi Minh City, Hai Phong, Da Nang, Nha Trang and Can Tho consumed some 14,700 tons of milk powder during the period, the report said.
The sales decrease means milk producers, especially foreign ones, which have focused their business in urban areas, have faced many difficulties. Yet they could still tap potential in smaller cities and rural areas where over 70 percent of the population is located, according to Nielsen.
Nielsen said its research has found that rural consumers' income has been improving, and health has become one of the key issues of concern for them.
However, tapping this new market would require "a high sales team investment," said Le Huu Minh Quan, Associate Director of Nielsen Vietnam's Retail Measurement Services.
"Up to 30 percent of shoppers buy products that are recommended by retailers, so winning retailer’s heart and loyalty is essential to help manufacturers expand their scope to rural successfully,” he said.

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