FMCG SALES GREW YEAR-ON-YEAR BUT SLOWED DOWN IN THE LAST QUARTER OF 2017
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1 MEDIA RELATIONS: FMCG SALES GREW YEAR-ON-YEAR BUT SLOWED DOWN IN THE LAST QUARTER OF 2017 Vietnam March 02, 2018 The nationwide FMCG sales, measured in traditional trade channels in 2017, increased 5.4% year-on-year compared to 4.9% in 2016 but experienced a dip in the last quarter of the year. In quarter 4, the sales growth slowed down significantly to just 0.5% versus 6.4% in quarter 3 (see chart 1), according to the Nielsen Quarterly Market Pulse report released by Nielsen Vietnam - a global measurement and data analytics company. According to the report, when looking deeper into six super FMCG categories nationwide (beverage 1 - including beer, food 2, milk base 3, household care 4, personal care 5 and cigarettes), the slowdown was seen across all the super categories. However, beverage still enjoyed a significantly higher increase with the growth rate at 3.2% than other groups. Cigarette also showed the positive growth in this last quarter: 1.3%. However, other super categories didn t show the same picture as these two. Other four categories such as personal care, homecare, food and milk base all showed a decline (see chart 2). Market Pulse Report is based on the results of Nielsen Retail Measurement study of 31 FMCG categories. The Nielsen Retail Measurement provides continuous tracking of product movement through defined traditional trade outlets in both urban and rural areas. The data are used to measure manufacturer and retailer effort as well as consumer off-take. Despite the rise in GDP in 2017 and the stably high optimistic level of consumer confidence index, volatility has been the key word when we talk about FMCG growth over the past two years. The growth rate was expected to experience uplift in the last quarter of the year as Vietnamese Lunar New Year was approaching in February 2018 and it was the time for all Vietnamese residents to celebrate. However, unexpected devastating natural disasters did take a heavy toll on people and their assets in some regions in Vietnam from September onwards. So, this impacted on FMCG consumption in Q4, especially in rural areas. Another reason of low growth in Q was the late Tet timing where this year Tet happened in mid-february while last year Tet was early in January. - observed Nguyen Anh Dzung, Executive Director, Retail Measurement Services, Nielsen Vietnam. With regards to the FMCG performance in rural and urban areas, the report shows that the growth observed in rural areas was higher than that in urban regions but it was more fluctuated. Total rural FMCG growth increased 6.1% year-on-year while total urban FMCG growth rate was flat at 4.0% onyear-year. Both markets witnessed a dip in the last quarter of 2017, which showed a sign of volatility. (See chart 3) 1 Beverage includes: Beer, Soft Drink, Energy Drink, Sport Drink, Packaged Water, Tonic Food Drink, Fruit Juice, Tea Bag, Ready-To-Drink Tea, Ready To Drink Coffee, Coffee 2 Food includes: Biscuit, Pie and Sponge Cake, Snack, Cooking Oil, Instant Noodle, Chili Sauces, Gum, Meal Maker, Bouillon - MSG 3 Milk includes: Milk Powder, Spoon Yoghurt, Sweetened Condense Milk, Ready to drink milk 4 Household Care includes: Laundry, Dishwashing Liquid, Household Cleaner, Insecticide Aerosol, Insecticide Coil, Fabric Softener, Toilet Tissue 5 Personal Care includes: Facial Care Product, Shampoo, Hair Conditioner, Personal Wash, Toothpaste, Toothbrush, Facial Tissue, Feminine Protection, Mouth Wash, Deodorant, Body Lotion.
2 Rural region has been noticed as a new source of growth. However, expanding to Rural in Vietnam brings with it the same challenge we have seen in other large Asian countries - a high cost to serve geographically dispersed districts. As we have seen in India, China and now Vietnam, it is more important for manufacturers to be able to prioritize their rural expansion efforts. Some parts of rural regions offer better prospects than others; therefore identifying these becomes very important to ensure maximum Return on Investment. Also, it requires manufacturers to have a great understanding of rural consumers who are experiencing a higher living standard and adopting urban-like media consumption and shopping behaviors added Mr. Dzung. Chart 1: FMCG growth
3 Chart 2: Super categories growth
4 Chart 3: FMCG growth in urban vs. rural areas Nielsen Holdings plc (NYSE: NLSN) is a global measurement and data analytics company that provides the most complete and trusted view available of consumers and markets worldwide. Our approach marries proprietary Nielsen data with other data sources to help clients around the world understand what s happening now, what s happening next, and how to best act on this knowledge. For more than 90 years Nielsen has provided data and analytics based on scientific rigor and
5 innovation, continually developing new ways to answer the most important questions facing the media, advertising, retail and fast-moving consumer goods industries. An S&P 500 company, Nielsen has operations in over 100 countries, covering more than 90% of the world s population. For more information, visit # # #
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