Contrary to the negative impact of COVID-19 on the global economy as well as in Vietnam,

the consumption value of milk and dairy products in Vietnam remains. Growth is strong,
even stronger than before the epidemic in 2020. Specifically, milk consumption in urban
areas grows by 10% while that in rural areas grows by 15%.

According to Euromonitor, the consumption of milk and dairy products in Vietnam will reach
1.76 million tons (+ 8.6%) in 2020. Vietnam is in the top of countries with relatively low
milk consumption, with only 26-27 kg / person / year (an average of about 100 kg / person /
year in the world and 38 kg / person / year in Asia).

After a period of deceleration from 2016 to 2019, growth in the domestic market for dairy
and dairy products is showing signs of improvement. In 2020, sales of dairy products in
Vietnam will reach VND 64.4 trillion, a growth rate of 10.3%. Sales of milk and dairy
products in Vietnam are expected to remain at 7-8% / year in the period of 2021 - 2025,
reaching a total value of about VND 93.8 trillion by 2025. In which, yogurt is expected to
have the highest growth rate with a CAGR of 12% / year.

According to a market report by Kantar Worldpanel, the demand for dairy products in
Vietnam is changing positively due to the young population structure and increasing average
income; trend of using nutritional supplements and immune enhancement products; the trend
of consuming convenient and branded products to ensure food hygiene and safety.

The motivation to promote the consumption of dairy products in 2020 will mainly come from
the health awareness of people, especially urban consumers, raised under the pressure of the
Fluids and dairy products strengthen the human immune system. Therefore, it is expected that
the dairy industry in Vietnam will continue to grow by 8% in 2021 when the COVID-19
pandemic has not been thoroughly controlled and will still motivate consumers to increase
the use of healthful dairy products. Vinamilk milk powder accounts for 30% of the market
share but the market for Vinamilk's powdered milk product line is mainly in rural areas.
Because in urban areas, especially big cities, the demand of people is high and they are
willing to pay for quality products, Vinamilk's dairy products face fierce competition with
other foreign milk products, portable goods. Otherwise, Vinamilk's condensed milk is a
product that appeared quite early in the market and up to now, condensed milk product line
still has a certain foothold in the market.

Domestic consumers are increasingly interested in the origin of raw materials as well as the
origin and safety of dairy products. Therefore, they often choose dairy products produced
directly from fresh milk over reconstituted milk products. This trend of choice is evident in
urban areas, where consumer awareness is better and with higher incomes, they are willing to
pay more for the best products. Liquid milk is always one of the key products, accounting for
the largest proportion in Vinamilk's total revenue. Possessing the advantage of 100%
sterilized fresh milk, produced in a closed cycle from breeding, purchasing, processing and
packaging; Organic dairy farm according to European standards…