Local Brands Continue to Dominate Vietnamese Market

Mar 2019

The latest report from Nielsen on Vietnam’s FMCG market has found that Vietnamese manufacturers earned 42% of the FMCG sector’s total revenues, in the four largest market segments — food, beverages, home care and personal care products. A 2019 report from Kantar Worldpanel also found similar numbers, stating that local brands account for up to 71% market share in larger cities and 78% in rural areas. In the food and beverage segments, Vietnamese enterprises, have a market share of 69% and 45% respectively.

The local brands have the advantage of understanding consumers’ customs and tastes and having extensive distribution networks reaching into the remotest parts of the country. In addition, their quality has been improving recently and their prices have become more competitive and more and more modern retail chains are becoming distributors for local FCMG manufacturers.

However this has meant that foreign companies have been acquiring local brands as an entry point into the market. There is an increasing pace of M&A deals in Vietnam, mostly stayed with state-owned companies who are privatizing their businesses. Kinh Do, one of the largest food processing manufacturers in Vietnam sold its entire confectioneries business to Mondelez International. Thaibev acquired a controlling stake in Sabeco, the largest beverage company in Vietnam in terms of market share, in December 2017. South Korean CJ Corp acquired over 70% share of food processor Cau Tre Foods and 100% of kimchi distributor Ong Kim, in 2018. The same company also acquired 4% share in Vissan Vietnam’s leading meat processors. 

(Source: Vietnam News)

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