Meet The Local Winners
The year 2023 painted a challenging picture for Vietnam's FMCG market. Prolonged economic uncertainty, stemming from global headwinds, translated to cautious consumers. By Q4 of 2023, a staggering 30% of families were struggling financially – the highest level of the post-pandemic era. While inflation showed signs of easing towards the year's end, its impact has lingered.
Despite a growth in total FMCG value compared to 2022, volume growth became a fading memory after a Q1 fueled by the Tet festive season. The year concluded with consumers cutting back on FMCG volume, leading to negative Q4 value growth for the entire in-home FMCG sector.
Beyond the headline figures, a fascinating shift took place. While 46% of categories witnessed a decline in volume, a remarkable 44% managed positive growth, with half even achieving double-digit gains. The key to success? Adapting to a new consumer reality.
The new reality shows consumer loyalty under siege. Innovations rates doubled that 10 years ago. With consumers having more options to choose from and expanding their repertoire, over 65% of FMCG brands are only purchased once a year. Getting them to buy you twice is even a greater challenge. This highlights the erosion of brand loyalty and the vulnerability of even established players.
The winning brands of 2023 cracked the code by aligning with evolving consumer preferences. They launched novel experiences and innovative products that addressed evolving health and wellness needs. They focused on formulas with added benefits and mastered the intricate shopper journey, ensuring their presence is unavoidable at crucial touchpoints.
Nearly 80% of growing brands in Vietnam boast rising penetration. They recruit more shoppers by becoming consumers’ first choice, by maximising their presence at different touchpoints, and finding white space in which to serve shoppers’ needs.
Expanding your brand’s reach and getting more people to buy has become paramount. This translates into a three-pronged growth recipe for brands:
Predispose more people: Simply getting your brand ‘liked’ isn't enough. You need to be top-of-mind for consumers, so they instinctively reach for your product when needs arise.
Be more present: Today's shopper is multi-channel. To maximise growth, you need to be present and easily found in all the channels that matter to your consumers. This means crafting a customised strategy for each channel to capture its shoppers’ attention.
Find new space: Winning brands leverage innovation to efficiently address consumers’ unmet needs and justify their products’ value proposition. Identify and enter new market segments and determine how your products can serve new consumption occasions.
Vietnam's FMCG landscape might be in flux, but the recipe for success remains clear: adapt, innovate, and be present where it matters. By embracing these strategies, brands can navigate the uncertainty and emerge victorious in the evolving and exciting Vietnamese FMCG space.
