Local FMCG draws Malaysian interest

As the local FMCG sector booms, Malaysian FMCG investors are eyeing an entry Photo: Le Toan

A delegation of eight Malaysian companies paid a working visit to Vietnam last week to explore the possibilities of selling their fast-moving consumer goods (FMCG) on the domestic market. Their products include processed foods, beverages, ingredients, and spices, as well as food packaging.

Dato’ Theng Bee Han, president of the Malaysian Business Chamber in Vietnam, said that Vietnam’s market is ready for the FMCG sector. The expansion in modern retail seen in hypermarkets, shopping malls, and convenience stores has pushed the development of the sector. E-commerce is also getting more popular, driving the FMCG segment further. On top of that, consumers are increasingly willing to buy foreign products due to their changing lifestyles and rising incomes over the past 10 years.

PitaBerry, Malaysia’s leading beverage producer, is looking to export its canned drinks to the Vietnamese market. Raymond Chong, the firm’s founder, told VIR he is in talks with Vietnamese supermarkets about offering his company’s Big Power and All WiiNS drinks in their stores.

“We are looking for opportunities in ASEAN, which is becoming a single market after the establishment of the ASEAN Economic Community (AEC). Within AEC, Vietnam is emerging with huge opportunities for energy drinks thanks to the country’s large young population. So we will not only export our products, but are also planning to open a factory in the future, if our drinks are accepted by local consumers,” he said.

Meanwhile, Anggun Fusion, a brand for premium ingredients, is searching for strategic partnerships and planning for long-term business in Vietnam. Mimie Azura Mohamad, the firm’s founder, said, “We want to sell ready-to-eat sauces in Vietnam. We plan to hold food testing events and find suitable partners for the products.”

According to Kantar Worldpanel’s report “The future of e-commerce in FMCG”, online FMCG sales reached a 0.5 per cent share in Vietnam in 2017, recording a rise of 69 per cent in comparison to last year.

According to David Anjoubault, general manager of Kantar Worldpanel Vietnam, although the size of Vietnam’s e-commerce market is still small compared to other segments, it holds large potential.

The value growth of e-commerce within FMCG is up 69 per cent, which makes Vietnam one of the countries with the highest e-commerce growth rates in the world.

“It’s now a critical time for investors to enter this promising market, while current retail giants should gradually move their offerings online and take advantage of their brand equity with omni-channel strategies, to be successful and to defend their current position,” Anjoubault said.

“On the whole, consumer trust and high logistics costs for delivery are major challenges that need to be addressed by businesses in order to move Vietnam’s e-commerce forward.”