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2016 FMCG growth put at 5-6%
Tran Thu
Tuesday,  May 17, 2016,23:59 (GMT+7)

2016 FMCG growth put at 5-6%

Tran Thu

By Tran Thu - The Saigon Times Daily

A customer scrutinizes imported beef at a supermarket in HCMC. Market research firm Kantar Worldpanel projected the FMCG market would expand 5-6% this year - PHOTO: THU NGUYET

HCMC – The fast-moving consumer goods (FMCG) market would expand 5-6% this year as projected by market research firm Kantar Worldpanel.

The firm forecast the FMCG market in HCMC, Hanoi, Danang and Can Tho would grow higher than 2.7% in 2015 while the rural areas would see growth slowing to 5-6%, compared to 8.5% in 2015.

In 2010-2013, the rural market enjoyed an annual expansion rate of over 12% and even 30.5% in 2011. The market started to experience a slowdown in 2014 with a rate of 10.4%.

Nguyen Huy Hoang, business development director at Kantar Worldpanel in Vietnam, said the firm had made the growth forecast for the FMCG market this year based the the country’s economic growth of 5.46% in quarter one, which was lower than in the same period last year.

Hoang said a slight increase in the consumer price index in the first months of 2016 indicated more pressure on inflation this year.

Vietnam’s gross domestic product (GDP) growth is projected to cool to 6% this year, lower than the Government’s target of 6.7%, due partly to severe the impact of protracted drought and saltwater intrusion in different parts of the country.

Lower economic growth would place an impact on purchasing demand in rural areas, according to Kantar Worldpanel. The firm forecast demands of consumers for convenient and healthcare products would remain high this year.

Hoang said more women have gone out for working, so time saving is important to them. They prefer buying convenient food items like milk, rye drinks and canned fish, among others.

Nowadays, people opt to buy products at places near their houses or on their way back to their homes as shown in the firm’s recent survey on lifestyle. This explains why traditional retail channels remain dominant in Vietnam, and grocery stores in cities and rural areas have posted sustainable growth over the years.

Mini-supermarkets and convenience stores have been attractive to shoppers despite their small market share in the domestic retail market.

The firm said more consumers have paid attention to their health due to increasing concern over food safety and environmental pollution. Therefore, sales of healthcare products, including soy milk and yogurt, have grown strongly in recent years.

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