COVID -19 Having Positive Impact on Some Segments of Vietnam’s FMCG Industry

Apr 2020

The second outbreak of COVID-19 in March caused the government to impose stricter measures to control the movement of the virus, severely affecting all of Vietnam’s major trading and investment partners. As a result in the 1st quarter of 2020, Vietnam’s GDP has been dragged down to 3.8 percent compared to 6.8 percent in the same period in 2019 according the report by Vietnam’s General Statistics Office.

Despite the sharp decline in most businesses, some of the categories and retailers in the FMCG sector are witnessing increase of sales. According to Kantar Worldpanel data, the stay-home order has driven consumers to stockpile essential products such as food, personal and household care products. As a result, sales of packaged food such as frozen food, canned food, instant noodles and cooking oils during the post-Tet (Vietnamese New Year) period  from 23 February 2020 to 4 March 2020, witnessed year-on-year (y-o-y) growth of 26.2%. Food manufacturers are reporting growing sales and revenue and planning production expansion. AceCook, a Japanese instant noodle maker for example has ramped up their production capacity upwards by 30% during the pandemic.

Another category that grew well during the post-Tet period, at 10.3%, is immune-boosting and nutritional dairy products such as yogurt and specialty milk powder. These products target children, along with elderly people who are more vulnerable to the disease.

Personal care products have recorded impressive y-o-y growth rate of 29% in urban areas and 19% in rural areas within the first quarter, according to Kantar World Panel. The specific categories which are enjoying positive growth are skincare and personal hygiene products.

(Sources: Kantar World Panel; Nielsen)

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