Sales of fast moving consumer goods (FMCG) such as soft drinks, toiletries and food in Vietnam’s main cities grew 6.3 percent in the second quarter of this year, the highest rate in the past three years, according to a report released Wednesday by Nielsen.
This growth in Hanoi, Ho Chi Minh City, Hai Phong, Can Tho, Nha Trang and Da Nang was mainly driven by a 5.2 percent increase in volume, the global performance measurement firm said in the report.
Beverage, including beer, continued to contribute the most to total FMCG sales with 41 percent. The category posted a 9.2-percent growth in the second quarter.
The report showed that rural markets continued to be a new source of growth for many manufacturers with a rate of 5.6 percent in the quarter, even though that was lower than the 7.6 percent growth recorded in the last 12 months.
Nguyen Anh Dung, Director of Retail Measurement Services at Nielsen Vietnam said in a statement: "The rural community in Vietnam accounts for 68 percent of the country’s 92 million people and half of FMCG sales."
Dung said this community is now investing in their education and enjoying income growth of around 44 percent over the last three years. "Yet these high potential opportunities remain largely unknown to many businesses," he said.
Dung also noted that expanding to rural areas in Vietnam faces the same challenges as in other large Asian countries, such as high costs to serve geographically dispersed districts.
He recommended that manufacturers prioritize their rural expansion efforts.
“Some parts of rural offer better prospects than others, therefore identifying these becomes very important to ensure maximum return on investment,” said Dung.