FMCG continues recovery with 5.7% growth in Q4 2015

According to the quarterly Market Pulse report released by Nielsen, the global performance measurement firm, the FMCG growth in Hanoi, Ho Chi Minh City, Hai Phong, Can Tho, Nha Trang and Danang was driven by a volume expansion of 4.9%, compared to 3.6% in the third quarter. 

This recovery is reflected across most of the seven key categories of beverages, food, milk base, household care, personal care, cigarettes and baby care, the report said. 

Beverages continued to enjoy stable growth with an increase of 7.7% in volume, contributing 38% to the total FMCG sales. 

The fourth quarter also saw a soft recovery of the food and milk-based categories which recorded volume increases of 0.9% and 3.7%, respectively. The remaining categories also showed signs of rebound, except for personal care which remained stagnant. 

“Although FMCG growth in Quarter 4 continues to show recovery, the market is no longer expected to have double digit organic growth,” said Nguyen Huong Quynh, Executive Director of Retail Measurement Services at Nielsen. “The volatility presents a lot of challenges for manufacturers to make sound decisions to fully seize market growth opportunities and drive a profitable business.” 

Quynh believes that the rural population has been emerging as a new source of growth for many manufacturers. 

Last year, FMCG sales in rural areas experienced a significant growth of 5.5%. The rural community in Vietnam accounts for 68% of the country’s 90 million population and contributed 54% to FMCG sales. 

Furthermore, rural residents are now investing more in education and enjoying income growth of around 44% over the last three years, Quynh added.