Nielsen: FMCG growth slows to 4.3% in Q3

                                                               Photo: Duc Anh

Latest Nielsen report shows growth in fast-moving consumer goods slowed down in third quarter.

Growth in fast-moving consumer goods (FMCG) stalled in the third quarter of this year according to the latest quarterly Market Pulse report from market researchers Nielsen Vietnam.

FMCG operations in the six key cities of Hanoi, Ho Chi Minh City, Hai Phong, Can Tho, Nha Trang and Da Nang experienced a slowdown in the third quarter, with 4.3 per cent growth compared to 6.3 per cent in the second quarter, driven by an increase of 3.5 per cent in volume growth against 5.2 per cent in the second quarter.

A slowdown was seen in beverage growth nationwide, which declined for the first time in two years, at 4.7 per cent in the third quarter compared to 9.2 per cent in the second quarter, due to a fall in non-alcoholic beverages. Beer sustained impressive growth of 9.2 per cent.

Among the seven major FMCG categories - beverages (including beer), food, milk-based products, household care, personal care, cigarettes, and baby care - all recorded higher growth except for baby care.

Food recorded growth of 7.8 per cent, milk-based products 1.3 per cent, home care 8.2 per cent, personal care 3.9 per cent, and cigarettes 5.1 per cent growth. Beverages continued to be the biggest category, growing 41 per cent, the same as in the second quarter. Baby care fell by 12.1 per cent.

Growth momentum of FMCG in the six key cities was stable while slowing in other urban areas and rural areas. Home care grew 8.2 per cent growth in the six key cities, for example, but just 0.1 per cent in rural areas, while food grew 7.8 per cent in the six key cities but fell 0.3 per cent in rural areas.

“It’s time to get out of the comfort zone, which is the six key cities,” said Mr. Nguyen Anh Dung, Director of Retail Measurement Services at Nielsen Vietnam. “To fully seize market growth opportunities and drive a profitable business, it is rural areas, the unknown yet potential land, that manufacturers need to tap into.”

“The rural community in Vietnam accounts for 68 per cent of the country’s 90 million people and 51 per cent of FMCG sales. Furthermore, rural inhabitants are now investing in their education and have enjoyed income growth of around 44 per cent over the last three years. But these high-potential opportunities remain largely unknown to many businesses.”

He also noted that the mix of challenges and opportunities in rural areas requires manufacturers to have a greater understanding of rural consumers and a proper route to market plan.

by Hong Nhung / vneconomictimes