Vietnam's GDP expanded by a healthy 5.66 per cent in the first quarter of 2024, marking the strongest first-quarter growth since 2020. While slower than the previous quarter's 6.7 per cent growth, this momentum indicates the country is on track to achieve its 2024 economic targets.
The report also reveals that as the underlying economic outlook remains positive, consumer confidence in an economic recovery has reached a five-quarter high. While concerns about household incomes have eased, worries about rising living costs, particularly due to the proposed electricity price increases, have emerged.
Despite improved consumer confidence, the first quarter of 2024 witnessed a subdued performance in take-home fast-moving consumer goods (FMCG) despite a boost from the Tet 2024 (Lunar New Year) holiday. Both urban and rural areas experienced a decline in FMCG volume during the first quarter of 2024, leading to an overall value setback in total FMCG despite slowing grocery inflation. This decline was primarily driven by the food and beverage sectors, with stricter enforcement of legislation on driving under the influence significantly impacting alcoholic purchases.
The decline in alcoholic beverage sales accounted for 30 per cent of FMCG loss, followed by dairy and packaged foods. Conversely, personal care and cooking aids witnessed growth in the festive season.
In addition, online gained significant short-term retail value share in the first quarter of 2024, and is steadily growing in the long term, positioning itself to be the future driver of FMCG expansion. In rural areas, large provisions stores and specialty stores have been growing in prominence over the years.
While FMCG value during the eight-week period around Tet 2024 declined compared to the previous year, it still surpassed the peak of the 2019-2022 period. Notably, a significant portion of this decline can be attributed to reduced beer value in both urban and rural markets during the festive season.
Home Credit to sell Vietnam wing to SCB Home Credit Group announced on February 28 that it has signed a conditional framework agreement to sell its Home Credit Vietnam business to The Siam Commercial Bank Public Co., Ltd. (SCB), part of SCBX Public Co., Ltd. (SCBX). |
Cashless payments in Vietnam open for a bright future of retail Visa, a global leader in digital payments, on March 19 unveiled insights into Vietnam's payment landscape with its latest Consumer Payment Attitudes (CPA) study, highlighting the surge in cashless transactions and offering a comprehensive overview of the future of retail in the country. |
Rapid developments changing the game in FMCG Vietnam’s fast-moving consumer goods (FMCG) market has continued to evolve at a fast pace with the expansion of international companies and changing consumer behaviour. Peter Christou, general manager of the Vietnam Worldpanel Division at Kantar, discussed with VIR’s Thanh Van his insights into the changing competitive landscape of Vietnam’s FMCG market. |
What the stars mean:
★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional