WINNING

OMNICHANNEL
IN VIETNAM
HOW TO GROW IN TODAY'S
RETAIL ENVIRONMENT

Vietnam Market Insight Series

KEY GLOBAL THE NEW RETAIL BIG BETS

RETAIL TRENDS ENVIRONMENT IN FOR THE
URBAN VIETNAM NEXT 5 YEARS
 Global growth in percentage over the previous years

Global Real GDP (IMF) Global FMCG

6.0%

4.0%
3.6% 3.8% 3.6%
3.5% 3.5% 3.4% 3.4%
3.0%

2.0% 2.1%
1.9%
1.3%

2012 2013 2014 2015 2016 2017 2018

The “zero growth” challenge

continues to grip the global
FMCG industry. While GDP
growth has been stable in recent
years, growing on average
+3.5% per year, FMCG growth
has been slowing – from +6%
in 2012 to +2.1% today. It’s
more challenging than ever
for brands to find growth.

Source: Global Omnichannel report

 But challenge doesn’t mean
that there is no growth
opportunity. At global level
and particularly in Asia where
it is prominent, E-commerce
has enjoyed a remarkable
development in the past few
years. It is expected to continue
growing in the coming years,
leveraged by the increased
integration of online and
offline shopping.
% value contribution to 2018 global FMCG growth
42%
28%
9%
E-commerce Discounters Traditional Cash & Carry Convenience
Source: Global Omnichannel report
More importantly, in 2018,
E-commerce is the biggest
contributor to total global
FMCG growth, nearly half of
additional FMCG sales (42%)
coming from Online channel,
followed by Discounters (28%).
This implies that growth is
possible to achieve if brands
focus on the right channels.
96%
of 2018 global FMCG growth was
outside Hypermarket + Supermarket
9%
5% 4% 3%
Hyper & Drugstore &
Super Pharmacy
How is Vietnam’s retail
environment changing?
 In the context of fast economic
development and improved living
conditions, Vietnam’s consumer
expenditure has gradually shifted
towards new aspirations such as
leisure and entertainment, travel
and housing. As such, FMCG
faces more competition within
consumer’s share of wallet and
therefore, growth for brands and
retailers within the in-home FMCG
market has been more limited at
single digit growth rate.

FMCG Value Growth in % - Vietnam Urban 4 cities

5.3
4.8 5.0

Our forecast:
FMCG growth
2.6 2.4 5-6%
in coming years

2015 2016 2017 2018 MAT Q2 19

Kantar | Worldpanel Division | Urban Household Panel | 4 cities: HCMC, Hanoi,

Danang, Cantho | Total FMCG excluding Gift | Take home market
 Zoom in to the take home
FMCG retail landscape and
you will see that Ecommerce,
Mini stores and Specialty
stores are outpacing the more
established channels, from a
smaller base (less than 10%
share out of total FMCG
spend). This is particularly
true for online shopping with
an impressive increase of
91% year-on-year as tech-
embed life continues to thrive.

91.0
Total FMCG value spend
year-on-year change in %

36.3

14.3
11.2
6.5 5.0 3.2

-1.1 -4.1

Online Mini Specialty Hyper & Direct All Wet Street GT Others
Stores Stores Super Sale Channels Market Shops

Kantar | Worldpanel Division | Urban Household Panel | 4

cities: HCMC, Hanoi, Danang, Cantho | Total FMCG
excluding Gift | Take home market | 12 months to June 2019
 % Value Share by Channel % Channel Contribution to Value
Growth vs YA

Street Shops 54.9

Hyper &
Super 14.1
Wet Market 9.2 66%
Incremental
Specialty
Stores 8.8 Spend

Mini Stores 5.2 16%

Spend Share
Online 2.3
Direct Sale 1.9
GT Others 1.8

Kantar | Worldpanel Division | Urban Household Panel | 4 cities: HCMC, Hanoi, Danang, Cantho | Total
FMCG excluding Gift | Take home market | 12 months to June 2019

Despite less than one fifth of FMCG spend

allocated in emerging channels including
Online, Mini stores, Specialty stores; two third
of total incremental FMCG spend come from
these channels.

This emphasizes the important role of

emerging channels for brand growth in today’s fast-
changing retail environment.

Brands should not only focus on the key shopping

channels which are dominant FMCG market share,
but also need to pay attention to small yet growing
channels that bring incrementality to the business.
It’s true when it comes to biggest categories in
FMCG market. In either foods or non-food
categories, noodle & soup or cosmetic products for
example, these channels are the key retail driver of
growth, making a significant contribution of more
than half to total additional spend. However, the
contribution of these growing channels varies by
category or market. Hence, understanding deeply
the source of brand growth and retail dynamics
help build a smart distribution channel strategy in
order to enable accelerated growth.

% channel contribution of emerging channels

to category value growth across the biggest categories

Specialty stores
45%
Ministores

48% Online

53%

57%

72%

82%

Kantar | Worldpanel Division | Urban Household Panel | 4 cities:

HCMC, Hanoi, Danang, Cantho | Total FMCG excluding Gift
 Our analysis shows that the increased spend
these emerging channels have gained is not
only shifted from other channels. The majority
of its increase (more than half) is the spend
added by new shoppers as well as the spend
uplift from its current shoppers. This will bring
more growth opportunities for brands and
retailers by leveraging these three channels.

Incrementality
% FMCG sales
gained by adding or
increasing incremental 60% 65%
spend to the market,
not from switching
among channels
Mini Stores Online

Kantar | Worldpanel Division | Urban Household Panel | 4 cities: HCMC, Hanoi, Danang, Cantho |
Total FMCG excluding Gift
 What is the future of
Vietnam’s retail industry?

% Value share by channel

2 +3.7 6 Street Shops

5
8
Wet Market
14 +2.8
15
Specialty Stores
9 +1.2
10 Direct Sale
9
6 GT Others

Hyper & Super

55 Mini Stores
51
Online

Others

MAT Q2 2019 2025F

Kantar | Worldpanel Division | Urban Household Panel | 4 cities: HCMC, Hanoi, Danang, Cantho |
Total FMCG excluding Gift
 As forecasted, Online, Mini
stores and Specialty stores
will continue leading the
future growth. There is still
huge potential for these
emerging channels to
growth further in both
shopper base, shopping
trips and shopper spend,
especially online channel.

Spend/trip
% Shoppers # of trips/shopper (kVND)

99.1 95.7 92

78.4 14.5 195

56.1 9.8 256

61 13.8 97

25.4 4 356

Kantar | Worldpanel Division | Urban Household Panel | 4 cities: HCMC, Hanoi, Danang, Cantho |
Total FMCG excluding Gift | Take home market | 12 months to June 2019
 60%
Of Vietnamese households
In Urban* will shop FMCG
online by 2025.

As our survey shows that shoppers

spend more of their free time online.
As such, the future growth of Ecommerce
will be continuously driven by the growing
connectivity especially via mobile phones.
From our latest data updated to end of 2018,
up toThe
95%second driver
of Urban is consumers’
households now
active engagement with
own at least one smartphone.digital
platforms, which nurture mobile
shopping from C2C to B2C.
The second driver is consumers’ active
engagement with digital platforms, which
nurture mobile shopping from C2C and B2C.
Last but not least, the strong
push from both pure players and
Last but not least, the strong push from both
third parties, i.e. delivery apps,
pure players and third parties, i.e. delivery apps,
with lots of promotional
with lots of promotional campaigns has been
campaigns has been stimulating
stimulating consumers spending online.
consumers spending online.

*Urban includes 4 key cities: HCMC, Hanoi, Da Nang, Can Tho

*Urban includes 4 key cities: HCMC, Hanoi, Da Nang, Can Tho
 However, online will not completely replace
physical stores in the next 5 or 10 years.
Consumers don’t just move from channel to
channel. They have a growing tendency to shop
FMCG products in a wider variety of channels to
serve different shopping missions. Simply put,
they will visit mom & baby shops for shopping
baby products and might prefer to shop imported
instant noodles in Mini stores or Hypermarkets
rather than in a nearby street shop.

In addition, we are seeing another rising

shopping trend when life gets busy. Shoppers
shop less often and want to save time by
reducing their shopping trips for FMCG products.
Therefore, there will be fewer opportunities for
brands and retailers to win the moment of truth*.

To respond to today’s new retail environment and

to prepare for tomorrow’s transformation, key
retailers are taking the lead in establishing a
variety of retail formats in order to meet shoppers
wherever they are.

*A moment of truth (MOT) is any opportunity a customer (or potential customer) has to
form an impression about a company, brand, product or service.
Nearly half of Vietnamese
households in Urban* shop at least
7 channel types
in a year.

*Urban includes 4 key cities: HCMC, Hanoi, Da Nang, Can Tho

Shoppers needs and
drivers in the next 5 years

1 Super convenience

2 Personalization / customization

3 Speed / ultra fast delivery time

4 Consciousness / meaningfulness

5 Point of differentiation

6 Specialisation and trust

7 Clusterisation (premium vs discounter)

 Big bets
for the near future
Hybrid retail &
super-convenience

In Vietnam, we may well see the rise

of social commerce and direct to
consumer (D2C) sales.

The concept of social commerce is the

platform where everyone can be a
retailer by opening a online store and
shoppers can make payments in different
ways, either by cash on delivery or via
digital wallet. Could Zalo be the nearest
future of Vietnam’s social commerce?
Or Wechat will come to Vietnam?

On the other hand, direct

To consumer (D2C) sales,
particularly subscription
models, could be the
next phase of online
shopping in Vietnam
as D2C model is seeing
a wave of investment
from major FMCG
companies worldwide.
Big bets
for the near
future
Intelligent technology

Omnichannel trend will be

evolving fast with new retail
developing, aided by the
advancement of new
technology. As a result,
shopper’s path to purchase
become even more
sophisticated and complex.
This is amplified by different
factors:
• Marketing embedded
technology (AI & ML to
enhance experience and
personalization).
• The evolution of
delivery/shipping
services.
• The continued rise of
cashless payment and
e-wallet.
On top of that, tech-based
innovations is promising to
bring shoppers greater
convenience, seamless and
personalized experience.
Some relevant applications
to watch out in Vietnam’s
retail could be cashierless
stores, scan & go, click &
collect with pick-up points,
unmanned stores, mobile
formats or kiosks and
voice assistants.
To stay in the race, an
omnichannel strategy
powered by new
technology is vital!
 CONTRIBUTORS:

ANTOINE LOUAT DE BORT

Account Director, Vietnam
Worldpanel Division

VU NGUYEN
Marketing Trainee, Vietnam
Worldpanel Division

Kantar is the world’s leading data, insights and

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For further information, please visit us at

www.kantarworldpanel.com/vn

CONTACT US
Kantar Vietnam
Worldpanel Division
58 Vo Van Tan St., Dist. 3, Ho Chi Minh City, Vietnam

Antoine Louat de Bort

Account Director, Vietnam
Antoine.Louat@kantar.com
Tel: +84 938066206

Nguyen Thi Nhu Ngoc

Marketing Manager, Vietnam
nhungoc.nguyenthi@kantar.com
Mobile: +84 (0)988 445 401
Closing slide

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