FMCG in
Vietnam
2024

3.1 Understanding the current FMCG dynamic

Worldpanel’s household purchase data reveals that total take-home FMCG value has stagnated in 2024 compared to the year before. This sluggish growth is evident across both urban and rural areas, with urban consumers

even experiencing a slight decline in FMCG spending. Rural areas show a departure from the double-digit growth previously observed over the past two years. This stagnation is driven by both a slowdown in price increases and a decline in purchased volume. This suggests that consumers are not only spending less but buying fewer units.

This slowdown in FMCG spending can be attributed to several key factors:

Changing consumer behaviour: consumers are adapting their shopping strategies in response to uncertainty. Trading down in lower-priced alternatives is becoming increasingly prevalent, as they seek to maintain affordability. Furthermore, after two years of the “new normal”, consumers are spending more time as well as consuming products and services out-of-home.
Increased reliance on promotions: Consumers are becoming more attracted to promotions, now come in even more formats, which influence purchasing decisions. The number of shopping trips specifically undertaken to capitalise on discounts and special offers has significantly increased.
Intensifying competition: The emergence of numerous new brands, a proliferation of SKUs, and the rise of low-cost options, often facilitated by e-commerce platforms, have created a highly competitive landscape. This intensifying competition is putting pressure on prices and eroding brand loyalty.

3.2 Trading down: A new reality

While the majority of categories witnessed price increases in 2023 due to grocery inflation, the year 2024 saw price stabilisation across 40% of FMCG categories in Urban 4 cities. Despite paying similar prices as the previous year, consumers remain cautious, and a collective saving mindset persists.

Trading down behaviour is more pronounced in rural areas, where consumers have paid lower prices for a wider range of categories. This heightened price sensitivity has driven them towards cheaper alternatives that offer comparable performance to more expensive brands. Across regions, several categories like coffee, personal care, and nutrition saw significant price increases, further impacting consumer choices.

3.3 The rise and fall of FMCG sectors

The FMCG landscape in 2024 witnessed subdued growth, with most sectors experiencing volume declines. Urban areas saw significant volume drops in Dairy and Beverages, primarily driven by lowered alcoholic beverage consumption due to stricter DUI enforcement. The decline in the food and beverage sectors reflects a shift from in-home

consumption to increased out-of-home spending.

However, the Personal Care sector emerged as a bright spot in the picture, achieving volume growth in both urban and rural areas while maintaining stable prices. Makeup and skincare categories were key drivers of this growth, indicating a continued focus on personal grooming and self-care among consumers.