Kantar_Worldpanel_5_Key_FMCG_Trends_in_Vietnam_2023_EN.pdf

1. 5 Key Factors
Influencing
Vietnam's FMCG
Market in 2023

2. 01. 2022 FMCG overview
02. Long-lasing global economic slowdown
03. The future of Online shopping
04. Health & Wellness as a lifestyle
05. Momentum for sustainable living

3. 1.
2022 FMCG
Overview

4. The last two years have been challenging to Vietnam's FMCG market as consumption volume has remained
flat. The overall FMCG value increased in 2022, but this growth was primarily due to price inflation.
%VALUE GROWTH %VOLUME GROWTH AVERAGE PRICE
+5.0
FY 2022 vs. YA
Unchanged
FY 2022 vs. YA
+5.0
FY 2022 vs. YA
+3.7
FY 2021 vs 2020
+0.3
FY 2021 vs 2020
+3.5
FY 2021 vs 2020
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities Vietnam | Total FMCG including Gift | 52 weeks ending 01/01/2023 4

5. By the end of 2022, Online growth trend is leveling off despite maintaining double digit growth along
with specialty stores and wet markets. Mini stores and street shops are experiencing a recovery following a dip
in value in Q3.
52
7
6
11
11
7
6
53
6
6
11
12
6
6
FY 2021
Street Shops
Wet Market
Speciality Stores
Hyper + Super
Mini Stores
Online
The rest is other channels, including hand-carry, direct sales, factory outlet,…)
FY 2022
Channel importance – % value % YOY value change
58 48
24 21 16
-8 -9 -2
14 7
12
5 4
-3
3
Q4'21 Q1'22 Q2'22 Q3'22 Q4'22
24 20 21 -20 22
-9 -12 -14
30 21
-26 -17 -12
97
29
5

6. 2.
Global economy: it
gets worse before
it gets better

7. World economists have forecasted the global economy will continue to experience slowdown in 2023 before
rebounding in 2024.
7

8. Source: GSO
Despite ending the year 2022 with an all-time high GDP growth, Vietnam's economy will face strong headwinds
in early 2023 with high inflation being the biggest risk.
By far the highest growth in Asia, Vietnam's GDP has increased
by 8.02 percent in 2022, exceeding the government’s
full-year target.
While Vietnam's inflation rate is much lower than that of the rest
of the world and Southeast Asia, it is expected to rise further
in 2023.
Consumer prices will continue to rise, with inflation expectedly
reaching 5% in early 2023, making it more challenging for the
government to keep it in check.
▲3.15%
CPI 2022
Vs. 2021
▲4.55%
CPI Dec’22
Vs. Dec’21
7.36
2.87 2.56
8.02
6.5
2019 2020 2021 2022 2023F
Yearly GDP growth (%)
Quarterly GDP growth (%)
5.05
7.83
13.71
5.92
Q1'22 Q2'22 Q3'22 Q4'22
8

9. Source: Worldpanel Division | Consumer Confidence Survey | Urban Vietnam 4 key cities | Q4’22 | Field work from Dec 28th to Jan 10th
Source: Kantar | Worldpanel Division | Household panel | Urban 4 cities Vietnam
Amidst rising prices are intensifying concerns about job and income security as a result of mass layoffs
happening since Q4’22. This caused consumers to further tighten their belts and become more mindful of their
spending.
Contact our experts to know how your
targeted shoppers react to price changes.
Implications
for brands
• It's important to understand in what
ways consumers of your brand and
categories deal with rising prices.
• Brands need to balance between
inflation, raising prices and brand
building, as well as justify price increases
with product quality.
20
21
22
23
24
25
MAT Q4'20 MAT Q1'21 MAT Q2'21 MAT Q3'21 MAT Q4'21 MAT Q1'22 MAT Q2'22 MAT Q3'22 MAT Q4'22
Total FMCG
Average price (VND 000)
Currently what do you consider to be the biggest concerns you and your household is likely to face?
% HH agree
62
36
29
22
17
51
15
9
58
40
28 24
16
57
14 15
71
45
31
20 18
29
15
19
68
53
40
24 24
18 17 14
0
20
40
60
80
Disease /
Sickness
Food Safety HH Income Cost of Food Job security Price of Oil Environmental
Pollutio
Natural
Disaster
%
Key
Decision
Maker
Agree
Q1_2022 Q2_2022 Q3_2022 Q4_2022
9

10. 3.
The future of
Online Shopping

11. Source: Worldpanel Division | Households Panel | Urban 4 Key Cities Vietnam | Total FMCG including Gift | 52 weeks ending 01/01/2023
Online(Ecom + Social Com) continued to experience double-digit growth, driven by the increase of shopping
frequency and spend per trip
19.5
22.3
21.0
7.3
6.8
3.9
337.5
313.4
385.4
Online
Ecommerce
Social
commerce
Spend change vs YA (%) Frequency Spend per trip (VND 000)
Full Year
2022
11

12. 21.8 22.5
11.8
14.7
7.9
7
6.4
6
4.6
5.9
FY 2021 FY 2022
Non-Alcohol Beverage
Make-Up
Hair Care
Milk Powder
Facial Care
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities Vietnam | Total FMCG including Gift | 52 weeks ending 01/01/2023
Besides, Online is becoming a popular shopping method for other F&B categories such as non-alcoholic
beverages who is gaining share & belong to the top growth category in 2022.
Top 5 categories by value share
on social commerce (%)
Total FMCG = 100%
Top categories by value growth FY 2022
vs YA on social commerce (%)
84.2
82.8
62.0
53.7
51.0
Sun Protection
Hand & Body Care
Liquid Detergent
Non-Alcohol Beverage
Milk Powder
12

13. The social platform with its built-in marketplace features makes it easier for consumers
to discover new brands & for small brands to reach a wide audience.
The rise of TikTok Shop
TikTok Shop has taken the consumer market by storm since its
debut in early 2022. In just 1 year, it has beaten eCommerce
giants such as Tiki and Sendo to be in top 3 online channels by
revenue in Vietnam by the end of 2022.
Uninterrupted
shoppertainment
Massive follower
base
Promotions
App users are offered
a seamless loop of
uninterrupted
entertainment,
exploration and
shopping.
The platform
capitalize on its
expanding massive
follower base who can
interact with sellers in
real time through live-
streaming.
As a newcomer in the
online marketplace
playfield, TikTok Shop
offered a slew of
promotions to attract
buyers.
Vietnam’s shopper-
tainment is
expected to
contribute to over
30% of ecommerce
market value
by 2025.
13

14. Virtual try-on experience
has enhanced the online shopping experience. With
the help of smartphone cameras or by uploading a
photo, consumers can get an idea of how a given
shade of makeup would look on them
before purchasing.
Online-to-Offline (O2O)
In a world that is going back
to the pre-covid norms,
having a O2O strategy is
key to creating a seamless
customer experience across
all touchpoints and
increasing conversions.
14

15. 4.
Health & Wellness
as an on-going
lifestyle

16. Source: Worldpanel Division | Lifestyle Survey 2021-2022 | Urban 4 key cities | Field work from Nov ’22 to Dec ’22
The pandemic has motivated consumers to look for F&B products that have nutritional benefits or healthy
alternatives (healthier diet, reduced fat, and sugar-free products).
Households are willing to pay a
higher price for healthier foods.
Households like products that have
additional "active" ingredients:
vitamins, ginseng, calcium, etc.
Households prefer reading the
product label to avoid buying
unhealthy foods.
Unit: percentage (%)
+3%
85%
agree
vs 2021
+6%
87%
agree
vs 2021
+5%
73%
agree
vs 2021
16

17. Source: Kantar | Worldpanel | Drink Usage Study 2022 | Urban 4 cities & Rural Vietnam | NAB exclude tap water & gallon>10L
Beverages with different health benefits are gaining popularity among consumers of all ages,
particularly Millennials.
Of all drink occasions are for
health motivations
25%
20
22
27
25
26
13-18 YO 19-24 YO 25-34 YO 35-44 YO 45-60 YO
Health motivations in age
groups' drink choices
Gen X 45-60 YO
Health booster
Immunity booster
Millennials 25-44 YO
Detox
For skin beauty
Gen Z 13-24 YO
Digestion support
For skin beauty
17

18. Source: Kantar | Worldpanel | Drink Usage Study 2022 | Urban 4 cities & Rural Vietnam | NAB exclude tap water & gallon>10L | Individual >12 YO
9
20
20
24
29
33
40
45
Water & Water+
Connecting time
Daily family moments
Stay efficient
Meal accompaniment
Family celebration
Flavor up routine
Start my day
% occasions with health motivation
The Demand Space principle: We cluster your shoppers into
identifiable and relatable groups based on the similarity of
data of who, when and why consumers choose a product.
Reach out to our experts to learn how we use shopper
segmentation to quantify your consumers' key behaviours.
18

19. 5.
Momentum for
a sustainable
lifestyle

20. Source: Worldpanel Division | Lifestyle Survey 2021 | Urban 4 key cities | Field work from December 6th to 12th, 2021
After the pandemic, the desire to live sustainably has not dissipated. Over half of consumers are conscious of
their environmental footprint and strive to minimize their impact on the environment. And shoppers are ready
to take an action if a brand does not uphold their corporate responsibility to protect the environment.
My family and I are actively trying to
reduce our plastic usage / purchase
53% agree
I have stopped buying some
products/services because of their
impact on the environment
or society
46% agree
I limit the use of
materials which can
be harmful to the
environment
76% agree
20

21. Source: Worldpanel Division | Lifestyle Survey 2021 | Urban 4 key cities | Field work from December 6th to 12th, 2021
At the same time, there is a gap between consumers' desire and action to living green. Many shoppers find it
hard to change the habit of using plastics and believe that eco-friendly products are usually expensive and hard
to find.
The Eco
Opportunity
Brands and manufacturers must lead the
change in helping consumers to close the
desire-action gap in sustainable living:
• Innovate and adapt to make sustainable
choices more available and affordable.
• Collaborate with government agencies
to improve waste collection systems and
educate consumers about what actions
they can take to reduce their impact on
the environment.
60%
Agree Disagree
44%
Agree Disagree
Environmental-friendly products
are usually expensive
Environmental-friendly
products are hard to find
21

22. 44%
29%
25%
3%
Manufacturers Government
Consumers Retailers
% agree
Vietnamese consumers expect manufacturers to take
actions in reducing environmental impact
Putting effort in working
responsibly doesn’t just help
the environment but can also
be good for business. Not
involved in any environmental
scandal is a must
Is believed to make a
big difference in
protecting environment
Are aware of their role in
protecting environment, but
green-purchasing is still a brand-
new concept to Vietnamese
consumers
Are least expected to
take actions in limiting
environmental damage.
Who can make the biggest difference to control and limit
environmental damage?
Source: Worldpanel Division | Urban 4 Vietnam | WCWD survey 2020 22

23. Eco-friendly packaging Vinamilk
Unilever
Cocoon
23

24. In the face of
rising inflation,
brands must
understand how
their consumers
react to price
increase
and balance betw
een inflation,
raising prices and
brand building.
The FMCG growth
in 2022 was driven
primarily by an
increasing average
price. Given the
current global
economy outlook,
Vietnam's
consumer market
may face strong
headwinds
in 2023.
Social commerce
is poised to fuel
the future of
online
shopping. The
distinctions
between the online
and offline
customer experien
-ce will begin to
blur as technology
advances.
Health &
Wellness is
becoming an
inherent criterion
in FMCG choices.
Market
segmentation is
more about
targeting
consumers at the
right moments of
consumption.
Now is the time for
FMCG brands and
manufacturers to
help consumers
turn their
environmental
concerns into
action by leading
the change.
2
1 3 4 5
24

25. Jane Ha – Senior Marketing Manager
Jane.Ha@kantar.com
Kantar is the world’s leading data, insights and consulting
company. We understand more about how people think,
feel, shop, share, vote and view than anyone else.
Combining our expertise in human understanding with
advanced technologies, Kantar’s 30,000 people help the
world’s leading organisations succeed and grow.
Contact us
For further information, please visit us at
www.kantarworldpanel.com/vn
Worldpanel Division, Vietnam