Consumption of fast-moving consumer goods (FMCG) in Vietnam's urban areas has fallen from 11.8 percent in the 12 months ending June 2013, to 7.7 percent one year later, according to a report released Monday by market research firm Kantar Worldpanel.
The result shows that “weak local demand is still a major block to a sustainable recovery," the report said. FMCG are products that are sold quickly at relatively low cost such as soft drinks, toiletries, over-the-counter drugs, toys and processed foods
"There is little doubt that consumers, especially lower income groups, will continue to look at ways to manage better their expenditure,” including seeking for promotions, opting for more in-home drinking occasions, and switching to value options, according to David Anjoubault, General Manager at Kantar Worldpanel Vietnam.
Being able to understand and capture these shifting needs will create new space for manufacturers to further develop their categories, even under the current downward pressure, Anjoubault said.
Consumers, especially lower income groups, will continue to look at ways to manage better their expenditure. Photo: Diep Duc Minh
Growth in the spending on FMCG emerging markets has slowed significantly from 8.8 percent in the 12 months to June 2013, to 7.5 percent in the corresponding time period ending June 2014, equivalent to $8.3 billion of lost growth, demonstrating the effect of a cooling in the global economy, according to the report.
Kantar Worldpanel forecasts further slowdown in the FMCG growth of emerging markets to 7 percent by next June.
Kantar Worldpanel tracks shopping behaviour in 60 countries, including Argentina, Brazil, Bolivia, Thailand and Vietnam through a sample of 450,000 shoppers worldwide that provide exhaustive and continuous information of their shopper behaviour.