In 2019, the Vietnam economy showed remarkable growth with the total value of the gross domestic product (GDP) had exceeded the target by 6.8%, the consumer price index (CPI) was well-controlled, as well as the retail industry achieved double revenue. Early 2020, the strike of the COVID-19 pandemic has dragged the economic growth rate down. However, the unexpected growth in the Fast-moving consumer goods category (FMCG) was a blessing in disguise.
The report by Kantar, a market research firm, shows that the value of the FMCG industry in the first two months of 2020 has reached 5.2%, nearly as high as the value of the whole of 2019 which was 6.3%. The groups of items with rapid growth include dairy products by 8.5%, packaged food by 10.8% and personal hygiene products by 14.5%. Meanwhile, beverage products were growing at a slower rate as in the first two months of this year, consumers tended to avoid social gatherings and staying indoors to limit the spread of this pandemic.
Moreover, the Kantar report also shows the overall picture of the FMCG industry. Despite its’ notable growth in the 2020 Tet holiday season, the rate is still lower than the same period in 2019. The main reason is the breaking out of the COVID-19 epidemic in early 2020 in Vietnam with 16 positive cases. The cases have spread confusion among Vietnamese people, causing them to avoid travelling, and keeping a distance from others. The whole impact led to a significant reduction in activities of visiting, giving Tet gifts or celebrating the holiday.
However, as of February 1, 2020, after the government announced the outbreak, the purchasing power of FMCG products began to increase sharply. Specifically, in the period after Tet from March 4, 2020, to February 23, 2020, the FMCG industry has risen dramatically by 10% compared to the post-Tet period last year. In particular, dairy products increased by 10.3%; packaged food bumped up by 26.2% and personal hygiene products escalated by 29.2% over the same period in 2019. A commodity that also saw a remarkable increase in growth was the group of household goods which increased by 11.4%.
For these fluctuations, user psychology explained much about it. As soon as the government informed about the seriousness of the disease, people started shopping and stockpiling a large number of necessities in preparation to cope with the worst situation of the national blockade if the epidemic is getting more and more dangerous. Besides, Kantar also recorded changes in consumer shopping habits. Online shopping in particular escalated by 122%, health products and pharmaceuticals rocketed by 166% and revenue at drug stores soared by 168%. At supermarkets, sales have reached up by 30%, and smaller ones have increased by 32%.
From the scenario, it can be realized that although Vietnam’s spearheaded economic sectors have been growing at a slow pace at this time, the service and FMCG industries have experienced unexpected growth, and this is also the highlight of Vietnam’s economy in the first months of 2020.
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