VIETNAM RETAIL

MARKET AND
COMSUMER
TRENDS 2020
Consumer and retail trends for FMCG
in 2020.
Understand and anticipate Vietnam
retail and consumer dynamics.

Wednesday December 2nd 2020

Kantar, Worldpanel Division, in partnership with
Eurocham
Macro
trends

2
There remains an elevated concern towards the current financial situation of
the HH with over 1/3 HH depriving themselves or worse…

How do you evaluate the current financial situation of your Household?

% HW agree

2 7 4 5 We are not doing well at all

17
27 25 29
We need to deprive ourselves sometimes

It comes out correctly

We have enough money to allow us some

extras once in a while

No financial worries, we don’t need to pay

attention
Q4 2019 Q1 2020 Q2 2020 Q3 2020

Source: Worldpanel Division | Households Panel | Urban Vietnam 4 key cities | MAT Q2’20 3
 …while the optimism towards the future financial situation also remains lower.
Consumers are still concerned about income and job security
Urban 4 cities
Concerns about income and job security are still higher than usual
When asked about the family's (% HW Agree)
financial situation in the future: 80 Q4_2019 Q3_2020

% Agree 70
60
50
3 7 9 Will get much worse
16 40
30
41
45 43 Will get worse 20
44 10
Will not change 0

Disease in livestock
Increasing costs

Food expense
Income

Job security

Natural disaster

Oil price
Pandemic

Environment Pollution
Food safety
46
41 40 Will improve
33

10 Will strongly improve

7 7 7
3 year Q1 20 Q2 20 Q3 20
average

Source: Worldpanel Division | Households Panel | Urban 4 key cities | Lifestyle survey 4
 FMCG landscape in the first 9 month of 2020
The second wave of outbreaks in Da Nang in late July did not show much of an impact. In the short term, FMCG growth
gradually returns to pre-COVID rate and is likely to continue to slow down in the last months of 2020 as consumers may cut
back on shopping.

% FMCG value growth (compared to YA)

Urban 4 cities Rural

23

34% 21

14
22%
11
12.7 13% 8 9
12 11.4 9
9% 11% 8.6
6.3 7
5% 7%

2019 First 9
YTD 2019 First 9
YTD
month
P9'20of month
P9'20 of
2020 2020

Source: Worldpanel Division | Households Panel | Urban 4 cities and Rural Vietnam | FMCG excl. Gift 5
 Stocking behavior happens intensively due to the pandemic and slowly returning to normal
During the pandemic months, consumers tended to buy a lot in each shopping occasion to stock. Recently, the shopper's basket
size has gradually returned to normal rate.

% change of key indicators (compared to YA)

Urban 4 cities Rural
FY 2019 YTD P9’20 Q3’20

13
11
11
10
9 9 9 9 9
8 8
7 7
6
5 6 5
4 4
3 3 4
2 2 2 2
1 1 1 1

FMCG index Occasion Spend/trip Average price per Volume/trip FMCG index Occasion Spend/trip Average price per Volume/trip
volume volume

Source: Worldpanel Division | Households Panel | Urban 4 cities and Rural Vietnam | FMCG excl. Gift 6
COVID-19 impact on
channel choices

7
 Retail environment is changing with the evolution of emerging channels* and big retail
formats, which is more apparent during the pandemic
% Value share across channels
Urban 4 cities

Street Shops 1.9 2.7 3.4

4.4 5.2
Wet Market 6.2
13.8 14.2
Specialty Stores 15.0
Pharmacy 8.1 8.8
6.5
Hyper & Super 9.2 8.9 8.7
Cash & Carry

Minimarket

Convenience Stores
56 54 53
Drug Stores

Online

Others

FY 2018 FY 2019 H1 2020

Emerging channels* including specialty stores, pharmacy, minimarkets, convenience stores, drug stores and online.

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift | YTD P6 20 vs YA 8
 Amid C19 situation, emerging channels and big modern formats are riding the growth wave,
which might continue post pandemic

Urban 4 cities % YoY Change across key channels

FY 2019 H1 2020

85

70 67

51
45

25 24 27
21
13 15
10 9
3 3

-1
-6
-10
Drug Stores Pharmacy Online Minimarket CVS Cash & Carry Hyper & Super Wet Market Street Shops

Emerging channels Big modern formats Traditional trade

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift | H1 2020 vs YA 9
2 Key Retail trends
in the new normal

10
Digital
Acceleration

11
Online channel today has reached over half of population, yet having many things to do in
order to tap into the other half, mostly in +50yo

% Online penetration – MAT P6’20

(FMCG + non-FMCG)

56% 44%
Online Non-online
shoppers shoppers
(2/3 of non-online
shoppers are > 50YO)

Source: Worldpanel Division | Vietnam Urban 4 cities | Smart shopper | June 2020 12
For FMCG purchases, more and more consumers move to online
There is still headroom to further grow in both shopper base and shopping traffic, which is expected to bring more
incrementality to FMCG market.

• More than 1/3 of urban households (35%) now

shop FMCG online, adding +500,000 new households in 2
years.

• Shoppers buy FMCG online every 2 months and a half…

• …and spend more than 300k each trip on average.

Source: Worldpanel Division | Households Panel | Urban 4 key cities Vietnam | Total FMCG excluding Gift 13
 Online shopping for FMCG products sees a step change in monthly shopper traffic under C19,
which will likely accelerate post pandemic

Urban 4 cities
FMCG Online - % Monthly Penetration (shoppers)
30

25 24.5 With current trends we

20
could expect monthly
16.8 penetration to be between
15

10
10.9
17% - 25% in one year
5

0
P13'16 P6'17 P13'17 P6'18 P13'18 P6'19 P13'19 P6'20 P13'20 P6'21

Online Forecast (Online) Upper Confidence Bound (Online)

Source: Worldpanel Division | Households Panel | Urban 4 key cities Vietnam | Total FMCG excluding Gift 14
E-commerce grows in all demographics, even in 50+yo and in rural and it is mostly
incremental for FMCG
% Online shoppers by demographic

H1 2019 H1 2020

30 50

45
25
40

35
20
30
15 25

20
10
15

5 10

5 Among Urban 4 key cities

0 0
Urban 4 key cities Rural Main Shopper Main Shopper Main Shopper Main Shopper
Age <30 Age 30-39 Age 40-49 Age 50+

Source: Worldpanel Division | Households Panel | Urban 4 key cities & Rural Vietnam | Total FMCG excluding Gift | H1 2020 vs YA 15
Understanding the barriers and triggers for online shopping, which are different across
consumer groups, will be key in order to expand

Triggers Top 5 common Barriers

Shopping habit: not used

Time saving 1 to online shopping

Avoid crowds/ queues 2 Product quality & guarantee

24/7 shopping 3 Product experience: touch & feel

Doorstep delivery
4 Delivery time

Easy shopping via 5 Shipping fee

social network

Source: Worldpanel Division | Vietnam Urban 4 cities | Smart shopper | June 2020 16
Most consumers prefer cash on delivery (COD) method when making online purchases,
yet great promising for digital payment to take off
% Shoppers - Payment method when
shopping Online or Offline
The younger, the more
100
95
exposure to digital
payment

28
21 Half of shoppers <30yo today
use digital payment

Cash Digital payment*

Total Online & Offline Online

*Digital payment: Bank transfer, e-wallet, credit card.

Source: Worldpanel Division | Vietnam Urban 4 cities | Smart shopper | June 2020 17
What’s next: Direct to consumer (D2C), subscription model!?

Unilever solutions: D2C platform

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Convenience,
Greater
Convenience!
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 Consumers now seek for a greater convenience, which means not only proximity but also
ease and speed

Urban 4 cities
Top 7 reasons to choose a shopping place (% agree vs YA)

1 The store is clean

2 It has good quality products

3 You can easily find what you want

4 It's near my home or on my way back to home

5 The staff are friendly/ responsive to my request

6 I save a lot of time shopping there

7 It's convenient to get there

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Lifestyle survey 2019 20
As such, street shops – a traditional channel remain dominant and manage to grow healthily
even in challenging time amid the fiercer competition coming from modern & emerging
channels
Street shop during C19 time…
(H1 2020)

+9%
Value growth

More than half (54%) of

consumer spend on FMCG happened
in street shops in 2019. More than

1/3
5 pts vs 2 YA % Contribution
to FMCG growth

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift 21
In the context of C19, they quickly adapt and respond to consumer changing needs in order to
survive

#1. Safety first #2. Product availability #3. Improvisation

In support of national social distancing campaign, Prioritize “pandemic” categories which are in Provide safe, speedy and convenient solutions
they applied many measures to control the high demand during quarantine time. to their consumers: “Less physical contact”
spread of COVID-19. shopping via phone/online & doorstep
Work with more than one supplier/distributor delivery.
• Wearing mask both online and offline to make sure products
• Limiting physical contact available to capture consumer needs.
• Washing hands

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Minimarkets continue growing its shopper base, which even shows a significant uplift
under pandemic, promising to keep momentum post C19

FMCG purchases in Minimarket – 4 week rolling

Transactions (100,000 times) Penetration (%)

Minimarkets now have reached nearly 2/3
of urban households, adding 240,000 new
MCO households into its shopper base over 12
35 months to June 2020.
30 29
25 24
20

15

10
On average, shoppers make 4
5
Under trips every quarter, spend about
COVID19
0 100k each trip in
minimarkets.

Source: Worldpanel Division | Households Panel | Vietnam Urban 4 Key Cities | Total FMCG excluding Gift 23
 This smaller modern format is also an organic source of FMCG growth with the majority of
its FMCG sales increase not being shifted from other channels

Source of value change

Urban 4 cities

80% Of FMCG sales gained in

Minimarkets are incrementality, by
adding or increasing incremental
spend to total market, not from
switching among channels.

Source: Worldpanel Division | Households panel | Urban 4 Key Cities Vietnam | FMCG excluding Gift 24
Additionally, minimarkets are winning rural consumers with the aggressive expansion of
Bach Hoa Xanh, opening up huge opportunity to further surge

Rural Minimarkets - % Penetration Rural shoppers spend the same amount (100k
VNĐ) for each trip, compared to Urban
2020
2019 citizens…
2018
… and shop there every quarter, likewise in
4% 15% Hyper & Super.
3%

Bach Hoa Xanh is now the

Shopper base are x5 main retailer, which has
within 2 years, acquiring
more than 2 million
already reached 12% of
rural households.
new rural households.

Source: Worldpanel Division | Households Panel | Rural Vietnam | Total FMCG excluding Gift | 12 months to June 25
What’s next: Virtual stores, vending machines, click & collect
Vingroup chose 20 points in Hanoi and
Ho Chi Minh City to officially launch the
VinMart virtual store 4.0 which allows
users to buy a product by scanning its QR
code via smartphone. The products are
listed on large banners in crowded public
areas such as bus stations and office
buildings, offering delivery within 2-4
hours.
There is an increasing number of
vending machines in public areas
i.e. bus station and soon metro
stations. The format which skews
more to younger consumer
groups is potential for drinks &
snacks brands to win impulse
purchases. It is expected to see
more in the near future.
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We are here to help – additional resources and further content

• There is a huge amount of content on To discuss on your key business questions at

Kantar.com/inspiration/coronavirus
• News/updates specific to Vietnam on
Kantarworldpanel.com/vn
category/ brand level, please get in touch with me
via Peter.christou@kantar.com or
Vietnam@kantarworldpanel.com

linkedin.com/company/worldpanelbykantar/

THANK YOU!

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