Increased health consciousness among consumers impacts FMCG market

28-Feb-2020 Intellasia | The SaigonTimes | 6:02 AM Print This Post

Vietnamese consumers prefer less physical contact with crowds amid the coronavirus outbreak, leading to a decline in shopping traffic with a larger basket size per trip, thus affecting the fast-moving consumer goods (FMCG) market.

Market research firm Kantar Worldpanel conducted a nationwide consumer survey on Vietnamese consumers’ changing behavior and attitude during the outbreak.

To stay safe and protect themselves, Kantar noted that locals are cutting down their spending on eating and drinking and other activities outside their homes. However, the FMCG segment for in-home consumption is expected to sustain growth.

The consumption of household cleaners and personal hygiene will also pick up due to the increase in self-protectionism, including the use of hand washers, hand sanitisers, wet wipes, hand cream and lotion.

Healthy foods, such as fruits and fruit juices, that help increase immunity are projected to see an upward trend. Consumers might also have a tendency to stock up on instant foods, such as instant noodles, frankfurters and snacks, especially in areas where infections are rampant.

In terms of retail, small, clean, nearby shopping areas, including street shops, minimarkets and convenience stores, will be temporarily favoured over wet markets or larger super and hypermarkets. Meanwhile, the health crisis is significantly increasing the number of transactions for online shopping and home delivery.

On the other hand, due to delays in shipments for import and export activities caused by the viral outbreak, suppliers and traders are facing challenges in producing, distributing and stocking goods.

“It is more likely to result in a rise in price, which might demotivate consumer spending during the fight against Covid-19,” remarked the consultant.

Mid and long-term impacts

Kantar predicted the impact of the fast-spreading outbreak would accelerate trends that the firm had already observed in 2019.

It could raise further the health and hygiene consciousness of Vietnamese consumers, which would drive the further development of hygiene products for personal care and home care including bar soap, hand washers, hand sanitisers, cleaning household products and tissues.

These products are currently small in terms of both consumer base and consumption but are expected to become more popular as more and more consumers start to get used to purchasing these items in bulk, according to the firm.

The consultant also expected to see an increased market share for ecommerce. Thanks to its convenience and the advantage of less physical contact, online to offline and ecommerce delivery models fit well with consumers’ needs during this time.

The online shopping platforms and delivery services are predicted to witness growth acceleration in both their shopper base and incremental spend by attracting shoppers who have never shopped online before.

With emerging channels growing in popularity, including minimarkets, convenience stores and ecommerce platforms, Kantar forecast there will be a continuing shift from traditional shopping behaviors to omnichannel and multichannel shopping, reinforcing the rising omnichannel trend in the retail and FMCG market in the coming months.


Category: Business, Vietnam

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