Covid-19 Impact on Vietnam FMCG
Consumer spend on fast-moving consumer goods (FMCG) products in Vietnam slowed down in the first two months of 2020, mostly driven by the period starting from February 1 when Covid-19 broke out in Vietnam.
Due to the delays in shipments of import and export activities caused by the coronavirus outbreak, there are challenges for suppliers and traders to produce, distribute and stock goods. It’s more likely to result in an uplift in price which might demotivate consumer spending during the fight against the Covid-19. Kanta World
The impact of this outbreak in 2020 might also accelerate the trends that we already observed in 2019.
- Firstly, it could raise further the health and hygiene consciousness among Vietnamese consumers, which would drive the further development of hygiene products for personal care and home care including bar soap, handwash, hand sanitizer, cleaning household products, tissue, etc. These products are currently small in terms of both consumer base and consumption, but are expected to become more popular afterwards as more and more consumers now start to get used to purchase these items with a higher level of volume consumption.
- Secondly, in 2020, we expect to see an increased share of ecommerce. Thanks to its convenience and advantage of “less physical contact”, online to offline (OTO) and ecommerce delivery model fits well with consumers’ needs during this time. The online shopping platforms and delivery services are predicted to witness a growth acceleration in both shopper base and incremental spend by (1) attracting new shoppers who have never shopped online before (three fourth of Vietnamese households have not purchased any FMCG products online in 4 key cities, according to our consumer panel data updated to FY 2019) and (2) increasing/upgrading spending from existing online shoppers.
- Lastly, with emerging channels growing in popularity as mentioned above, including minimarkets, convenience stores and ecommerce, there will be a continuing shift from traditional shopping behaviors to omni-channel and multi-channel shopping, reinforcing the rising omnichannel trend in retail and FMCG market in the coming time.
Vietnam FMCG: Today & Tomorrow