FMCG An integrated

Monitor
update of Vietnam
FMCG market
Based on Worldpanel data

Jan 2020 Updated to 06/12/2020 (P12’20)

Urban 4 Key Cities & Rural Vietnam
 Executive summary
1. Economic indicators
Vietnam's economy sustained a
positive performance in 2020,
5. Spotlight
showing a bright outlook in 2021.
FMCG ecommerce enjoyed a
dramatic growth across Asia in both
shopping occasions and retail share.

2. FMCG overview
FMCG market achieved a
stronger growth in 2020, with
Packaged Food sector being 4. Retail landscape
the biggest winner.
Online, minimarket, drug stores keep
leading the FMCG growth in Urban
areas in the last quarter of 2020.

3. Hot category
Chili sauce increases significantly for in home
consumption thanks to its convenience.
How is chili sauce used at home?

2
Vietnam macro economy
Thanks to well coping with COVID-19 pandemic since the very beginning, Vietnam's economy sustained a positive
performance in 2020. GDP growth recorded as the lowest growth rate in the past 10 years, yet is still considered as a
success compared to other countries, with a stable CPI and a fast rebound of retail sales of consumer goods.

GDP CPI Retail Sales of Consumer Goods

7.0
5.6
12.7
12.5
4.5
3.2
2.9 3.8 3.2
6.8 8.3
2.6 2.8
0.4 2.8 4.7
1.4 1.2

2019 2020 Q1'20 Q2'20 Q3'20 Q4'20 2019 2020 Q1'20 Q2'20 O3'20 Q4'20 2019 2020 Q1'20 Q2'20 Q3'20 Q4'20

Source: GSO 3
Bright economic outlook in 2021
Despite the fast recovery of Vietnam economy, there remains uncertainties with both challenges and
opportunities ahead…
OPPORTUNITIES CHALLENGES

• GDP growth is projected to recover at 6-6.5 % in 2021. (Vnexpress)

• The positive economic outlook will • Border closures still have a significant
attract more foreign investment, impact on trade, supply chains,
• FDI was hit hard in 2020. However, given the successful containment consumer demand and travel.
of COVID-19 in Vietnam together with the vaccine rollout plan at increasing both capital and
global level, Vietnam remains a potential destination to invest in. employment.
• Consumer might be more cautious in
spending due to uncertainties, inflation
• Opportunities for export as many
• In the first three months of the year, almost 35,000 businesses went & financial concerns, given the
global companies are flocking to increased unemployment rate in key
bankrupt, urban unemployment rate hits 10-year high in Vietnam Vietnam together with the effects of
(3.7%), yet ranked as top 10 countries having the lowest figures. cities.
CPTPP, EVFTA and in-progress RCEP.
(Vnexpress / Vietnamtimes)
• Increasing environmental issues as
• M&A activities to rebound and increase businesses and activities resume &
• Export and Import sustain a healthy growth at 7% and 4% with Vietnam holding second place in unsustainable exploitation of natural
respectively, promising a fast recovery in 2021 once borders reopen. the top 20 countries having the resources, leading to health & well-being
highest M&A index. issues.
• Beside COVID-19, environmental issues (climate changes, air
• Business environment and skills of
pollution, plastic pollution,…) become one of top concerns to • The rise of digital economy & the
workforce need to be improved in order
cope with. acceleration of digital transformation
to keep up with the economic
pushing the exceptional growth of development pace.
• The unforeseen and unpredictable development of COVID19 digital media, eCommerce, cashless
still has a certain impact on consumer demands and habits. payment,… play a key role in
economic development.
Source: GSO

4
 FMCG overview
FMCG in 2020 showed a stronger growth in both urban 4 key cities and rural, mainly driven by the impact of
COVID-19. However, in short term, the growth trend is getting back to pre COVID-19 level.

% YOY FMCG change FMCG - % 12 weekly YOY change

Value Avg. price paid* Volume** COVID-19 Impact
Urban 4 cities Value Volume 20
13.7 15.6
11% 15
8%
6% 10
4% 4.9
2% 5 2.7
0% 2.4
0

2018 2019 YTD 2018 2019 YTD -5

Dec Dec Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 P12'20

20

15.0
Rural 15
10% 10.7
9%
10
6% 6% 7%
6.9
4% 5 5.0
2.2
0
2018 2019 YTD 2018 2019 YTD
Dec Dec Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 P12'20

*: 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
**: 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)

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG excluding Gift | 48 weeks ending 6/12/2020 5
 Sector performance
In general, almost all sectors grow at a faster pace over the past 12 months compared to last year, with Packaged
Food sector being the biggest winner. Beverages were hit hard yet successfully managed to regain momentum in
Urban 4 key cities, while still struggling to bounce back in Rural.

% YoY Value Change across sectors

Urban 4 cities 23

11 12 12
8 9
6 7 6
2 4
2

FY 2019

YTD
December

FMCG Dairy Beverages Packaged Foods Personal Care Home Care

Rural
15 15 16
13 12
9 10 11
7
5 4
1

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG excluding Gift | 48 weeks ending 6/12/2020 6
 Hot categories
Chili sauce increases significantly for in home consumption thanks to its convenience as a ready-to-consume
product. Its growth is driven by the expansion of consumer base and also the increase of in-home volume
consumption. How is chili sauce used at home? Is the product being used in more dishes/meals?

Urban 4 cities
YTD P12’20 vs YA

+21% +13% 82%

% Value growth Volume per buyer % Buyers

X2 FMCG 42g/week +87k new

value growth households

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift | 48 weeks ending 6/12/2020 7
 Retail landscape
Online, minimarket, drug stores keep leading the FMCG growth in Urban areas, while other channels start to slow
down and even decline in the last quarter of 2020. Hyper & Super slows down as a result of the reduced need of
stockpiling.

Urban 4 cities % YoY Value change across key channels

FY 2019 YTD P12'20 12 we P12'20

70
65
61
50

38 37
32
25
19
14 12 15 13
7 10 9
3 2 3 5
1

-3 -3
-6 -8
-10

-25

Drug Stores Online Minimarket Wet Market Street Shops Hyper & Super Pharmacy Specialty Stores CVS

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 | 48 weeks ending 6/12/2020 8
Spotlight: Ecommerce enjoyed a dramatic growth across Asia
Online shopping for FMCG products is thriving everywhere. Ecommerce is the fastest growing channel and gaining
more ground in total retail landscape across Asia from the largest ecommerce markets to small ones.

% Value share of online shopping in FMCG across markets

29%
Q3 2018 Q3 2019 Q3 2020
23%

12%

4% 3% 3%

S.Korea China mainland Taiwan Vietnam Malaysia Thailand

% Occasions growth
in (MAT Q3’20 vs YA) +25% +44% +37% +78% +82% +35%

Source: Worldpanel Division | Household Panel | Asia Consumer Insights | 1 year to September 2020
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