FMCG market contracts in rural areas

The first quarter saw the fast-moving consumer goods (FMCG) market contracting in rural areas for the first time in three years but posting stable growth in cities, showed a report of market research firm Kantar Worldpanel Vietnam.

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The FMCG market in major cities including HCMC, Hanoi, Danang, and Can Tho expanded slightly in quarter one compared to the final quarter last year. Dairy products and beverages were major goods that fueled the FMCG growth in cities.

Meanwhile, the FMCG market in rural areas slumped in both value and volume. A contraction was seen in most sectors, especially personal care and household care sectors with a decline of 6% and 5% in volume respectively.

Regarding shopping channels, the FMCG market in cities grew thanks to the grocery segment and others like specialty stores, mini marts, and convenience stores. Meanwhile, traditional markets gradually lost their appeal in rural areas.

Small grocery stores in rural areas rose 5% in value in quarter one against the same period last year while traditional markets and provision stores declined 9% and 13% in value respectively, according to the FMCG Monitor report.

Overall, the FMCG market in cities in a one-year period starting from March 2015 rose by 3.1%, higher than 2.6% in the previous year and 5.7% in rural areas, much lower than 9.7% in the previous year.

In the first quarter of this year, Vietnam achieved gross domestic product (GDP) growth of 5.46%, lower than the growth of 6.12% in the same period last year.

FMCG, or consumer package goods, are consumer products that are sold quickly at low prices and have short expiry dates like beverages, toilet paper, and bathroom cosmetic products.

Saigon Times

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