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Vietnamese FMCG brands are flourishing

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Reports released recently by market analysis firms all show that in the FMCG (fast moving consumer goods) sector, Vietnamese brands hold the upper hand over rivals from multinational corporations.

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Vietnamese brands flourishing

 

Kantar Worldpanel’s Asia Brand Power report released on January 15 showed that Asian brands have been prospering in domestic markets in recent years.

In Vietnam, market share held by Vietnamese brands are superior to global brands in both rural and urban markets. In rural areas, Vietnamese brands hold 78 percent of market share, or 3.5 times higher than global brands. In large cities, the figures are 71 percent and 29 percent, respectively.

Kantar Worldpanel’s David Anjoubault commented that the strength of Vietnamese brands not only lies in good understanding about local markets, but also in distribution networks.

The success of Vietnamese brands is attributed to the close cooperation with Vietnamese retailers. 

The relation between Vietnamese manufacturers and retailers is stable because it aims for mutual benefits. Retailers help Vietnamese brands approach local consumers more easily than international rivals. Meanwhile, manufacturers support retailers’ sale strategies to get adapted to the changes in consumers’ shopping habits.

The report by Nielsen on top 100 FMCG manufacturers in Asia Pacific also gave similar comments.

After analyzing four largest market segments including food, beverage, home care and personal care products, Nielsen came to the conclusion that while multi-national brands gained a. 2 percent growth rate in value in 2016 (5 percent in 2014), Vietnamese brands gained a growth rate of 7 percent (5 percent in 2014). Vietnamese manufacturers made up to 42 percent of total revenue of the whole FMCG sector.

In the food & beverage segment, Vietnamese enterprises hold the upper hand with market share of 69 percent and 45 percent, respectively. In home care and personal care segments, multinational brands have advantages, but their growth rates were lower than domestic ones.

Nguyen Anh Dung from Nielsen Vietnam explained that domestically made product quality has been improved recently, while they have more competitive prices and they are distributed through large retail markets which allow access to consumers in remote areas.

More modern retail chains have become distributors for FCMG manufacturers.

With the current low consumption level in the Vietnamese market, the FCMG sector still has great opportunities to develop and bring stable profits to investors. 

Profit500, a Vietnam Report list of the 500 most profitable enterprises, showed that increasing sales and reducing costs are the top priority of FMCG manufacturers in the next 12 months.

Also according to Vietnam Report, the number of Vietnamese digitally connected spenders is expected to rise from 23 million and consumption level of $50 billion in 2015 to 40 million and $99 billion by 2025.

 

 

Source: VietNamNet

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