FMCG

An integrated
update of Vietnam's
FMCG market
Full Year 2022
(52 weeks ending 1/1/2023)
Monitor
Urban 4 Key Cities & Rural Vietnam
By Worldpanel Division

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 Executive summary

Beauty Care is
The rise in average recovering from a By the end of 2022,
price paid drives the decline in 2021, Online channel growth Households’ rising
GDP in 2022 is growth of total FMCG especially Cosmetic is leveling off despite concerns about their
estimated to increase in both Urban 4 cities Remover & Sun maintaining double- financial future
by 8.02%, setting a and Rural, presenting Protection which digit growth along requires
record growth in a challenge in managed to gain with the recovery of manufacturers to
more than 10 years. anticipating the traction uplift in 2 the channels under respond quickly to
spending power in consecutive years, Covid’s impact last specific scenarios to
2023. maintaining the year. limit future risks.
categories’
Macro economy momentum. Spotlight
FMCG overview Retail landscape
Hot category
The Most Significant World Events in 2022
COVID-19 outbreaks caused by Omicron sub-variants, the conflict in Ukraine & inflation pressure have been "strangling" the growth
momentum of global economy.
1. Russia-Ukraine War
Russia invaded Ukraine on February 24, in a major
escalation of the tension between the two countries.
Leaving a huge impact on a global scale:
➢ Disruption in trade linkages & energy crisis
➢ Price shocks affecting gas and electricity markets in
Europe and Asia
➢ Food shortage
2. A Year Of Brutal Inflation
About two-thirds of developed economies and more than
half of emerging markets recorded inflation rates above
their targets by 2021, putting the 2022 world inflation at
8.8%.
According to the IMF, a third of the global economy is
likely to see a contraction this year or next, and global
economic growth will slow to 2.7% in 2023.
2023 forecast: Global Inflation 6.6% GDP 2.2-2.9%
Source: IMF, Worldbank, Vietnamplus, Vietnam Briefing
3. Zero-Covid in China
While countries around the world have relaxed their
disease control policies, China continued to pursue the
Zero-Covid policy.
China's reopening in Jan 2023 is pivotal to the recovery of
the economic outlook globally. In parallel, global inflation
will be impacted significantly due to the recovery of
international mobility, production, and sales.
4. Global Labor Market Remains Volatile
From silent layoffs to mass layoffs, the world's job market
has experienced "ferocious waves" over the past year.
ILO** announced that the global unemployment rate is
expected to remain above pre-Covid-19 levels at least
until 2023.
• Commodities price pressure to ease, but volatility remains
Key trends: • Labor market tightness likely to continue
• Global supply chains expected to recover
*The International Labor Organization
Vietnam’s macro economy
The world’s economic instability in 2022 had a significant impact on the local economy. Despite global turbulence, Vietnam posted an
impressive GDP growth of 8%, putting the country in a strong position to sustain the growth in 2023 and the following years.

% Change vs the same period last year

GDP CPI Retail sales of consumer goods

& services
8 4.5 19.8
7.0 6.5 2.9 3.1 11.4
2.8 9
2.9 2.6 1.8
2.9 -4
2019 2020 2021 2022 2023F 2019 2020 2021 2022 2023F 2019 2020 2021 2022 2023F

13.7 42.5
7.7 4.4
5.0 5.9 3.0 3.3 19.5 17.1
1.9
4.8

Q1'22 Q2'22 Q3'22 Q4'22 Q1'22 Q2'22 Q3'22 Q4'22 Q1'22 Q2'22 Q3'22 Q4'22

Source: GSO
 Consumers' perspective
Despite the GDP growth of over 8% vs YA, consumers’ optimism plummeted by the last quarter of the year following the
lay-off wave in many industries, brought on by weakening global demand for exports.

The economic situation will be better or the same as today

in the next 12 months (% households agree in Urban 4 key cities)

86 88
84 82
80 81
74 Wave 4 of
76
72
COVID
62 65
60
1st COVID
impact
42

Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22

Source: Worldpanel Division | Consumer Confidence Survey | Urban Vietnam 4 key cities | MAT Q4’22 5
 Consumers' perspective
Worries about household income & Job security are on the rise, while concerns about Food safety are approaching pre-
Covid level (74%).
Currently what do you consider to be the biggest concerns you and your household is likely to face?

% HH agree

80 Q1_2022 Q2_2022 Q3_2022 Q4_2022

% Key Decision Maker Agree

71
70 68
62
58 57
60
53 51
50 45
40 40
40 36
31
29 28 29
30
22 24 24 24
20 18 19
20 17 16 18 17
15 14 15 15 14
9
10

0
Disease / Sickness Food Safety HH Income Cost of Food Job security Price of Oil Environmental Natural Disaster
Pollutio

Source: Worldpanel Division | Consumer Confidence Survey | Urban Vietnam 4 key cities | MAT Q4’22
 FMCG
overview % Change vs YA

Long-term growth in 9 11
total FMCG is driven 5
6 5
by an increase in the 4
3
4 5
Urban 4 3
average price paid. 1
key cities 0 0
Additionally, even if
the rise in val vol price Q1'22 Q2'22 Q3'22 Q4'22
consumption is
slower than that of
FY 2020
the price, rural areas
show a hint of FY 2021 Value Volume* Avg. paid price** Quarterly value trends
improvement. FY 2022
17
15
11 11
9
6 7
4 4 4 4
3
Rural

0 Q1'22 Q2'22 Q3'22 Q4'22

val vol price

*: To calculate FMCG volume change, we calculate how much volume contributes to the value change for each category, sum up these contributions and relate to value YA (this results in an average category change in volume)
**: To calculate FMCG price paid change, we calculate how much price contributes to the value change for each category, sum up these contributions and relate to value YA

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG including Gift | 52 weeks ending 01/01/2023
 Sector FY 2021
% Value change vs YA in Urban 4 key cities

performance FY 2022
Value Volume* Avg. paid price**

The recovery of
FMCG 4 0 4
Beverages and non- 5 0 5
food sectors have
contributed
significantly to the Dairy 5 2 3
2 -2 4
uptick in FMCG in
Urban 4 cities, both in
terms of value and
Beverages -4 -6 2
volume. 13 7 6

Packaged 16 10 6
Foods -5 -13 9

Personal -3 -5 2
Care 15 13 2

Home -2 -4 3
Care 14 9 4

*: To calculate FMCG volume change, we calculate how much volume contributes to the value change for each category, sum up these contributions and relate to value YA (this results in an average category change in volume)
**: To calculate FMCG price paid change, we calculate how much price contributes to the value change for each category, sum up these contributions and relate to value YA

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities Vietnam | Total FMCG including Gift | 52 weeks ending 01/01/2023
 Sector FY 2021
% Value change vs YA in Rural

performance FY 2022
Value Volume* Avg. paid price**

Meanwhile, all other

FMCG 4 0 4
categories have seen 11 4 7
significant growth in
rural regions, with the
exception of Packaged Dairy 10 7 3
15 9 6
Food, which is currently
growing slowly.

Beverages -8 -10 2
15 10 5

Packaged 10 2 8
Foods 5 -5 11

Personal 5 2 3
Care 12 7 4

Home 2 2 1
Care 13 5 8

*: To calculate FMCG volume change, we calculate how much volume contributes to the value change for each category, sum up these contributions and relate to value YA (this results in an average category change in volume)
**: To calculate FMCG price paid change, we calculate how much price contributes to the value change for each category, sum up these contributions and relate to value YA

Source: Worldpanel Division | Households Panel | Rural Vietnam | Total FMCG including Gift | 52 weeks ending 01/01/2023
 Category Beauty Care is recovering from 2021, especially Cosmetic Remover and Sun Protection which managed to gain
traction uplift in 2 consecutive years, keeping the momentum for the categories.
highlights Our study shows that steady education on new beauty occasions may raise consumer demands for emerging Facial
care categories (i.e Sun Protection and Cosmetic Remover).

% value growth FY 2021 vs YA FY 2022 vs YA

Cosmetic Remover & Sun Protection recorded higher

Beauty care trip growth than the total Beauty care sector.
Hair Care
Increasing consumption by turning Finding new consumption occasions
Oral Care occasional usage into daily usage
Liquid Bath

Facial Wash
Use daily, even in house to
Cosmetic Remover protect skin against UV

Sun Protection

Make-Up

Hand & Body Care

Deodorant

Spend change ranges from -3% to +3%

Spend change at a
Spend change ranges from -9% to +9% double-digit rate

Source: Worldpanel Division | Households Panel | Urban 4 cities Vietnam | Total FMCG including Gift | 52 weeks ending 01/01/2023
 Retail By the end of 2022, the Online channel growth is leveling off despite maintaining double-digit growth along with
specialty stores and wet markets. Modern Trade and Traditional Format (esp. Wet Market) are experiencing a
landscape recovery following a dip in value in short-term Q4.

% Value contribution of channel % YOY value change by channel

100
Online 58 48
7 7 7 24
90 8 7 21 16

11 13 12 11 11
80 14
Hyper + Super -8 -2 7
-9
70 11 10 11 11 12
6 6 6 6
60 6 Mini Store
6 7 7 24 20 21 -20 22
7 7
50
30 21
40 Specialty Stores
-9 -12 -14
30
54 54 53 52 51 97
Wet Market -17 -12 29
20 -26

10
Street shops 12
0 5 4 3
-3
Q4'21 Q1'22 Q2'22 Q3'22 Q4'22
Q4'21 Q1'22 Q2'22 Q3'22 Q4'22
The rest is other channels, including hand-carry, direct sales, factory outlet,…)

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities Vietnam | Total FMCG excluding Gift | 12 weeks ending 01/01/2023
 Spotlight At the end of 2022, many households were becoming concerned about their financial situations, suggesting more
careful budgeting and spending in the future. With the new challenge, spending on groceries is likely to be impacted,
of the year requiring manufacturers to respond quickly to specific scenarios to limit future risks.

The pressure on the financial situation of And in the next 1 year, % of households think
households is starting to increase again that their financial situation will improve are…
% household agree by each pressure group
% household agree by
each pressure group 20 21 66
Wave 4 24
40 of
Struggling COVID 48
53 54 53 30
Managing
45
Comfortable
27 25 23
15
Comfortable Managing Struggling
Q2 2021 Q2 2022 Q3 2022 Q4 2022

Key questions to be answered

• WHO amongst your shopper base is most under pressure and feeling the strain vs. competitors’? Contact our experts to
• HOW are your shoppers in different financial positions behaving and reacting to the rising inflation? know how your targeted
shoppers react to price
• WHAT are the ways in which you can continue to support shoppers across the financial spectrum?
changes.

Source: Worldpanel Division | Consumer Confidence Survey & HH Panel | Urban Vietnam 4 key cities
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For further information, please visit us at

www.kantarworldpanel.com/vn

Contact us
Jane Ha – Senior Marketing Manager
Worldpanel Division, Vietnam
E: Jane.Ha@kantar.com
58 Vo Van Tan St., Dist. 3, Ho Chi Minh City, Vietnam
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