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Rural FMCG market surpasses Urban in Q2 growth

Released at: 15:18, 03/08/2017

Rural FMCG market surpasses Urban in Q2 growth

Photo: Duc Anh

Latest report from Kantar Worldpanel shows Rural doing better than Urban in second quarter FMCG growth.

by Doanh Doanh

Both the Urban and Rural fast-moving consumer goods (FMCG) markets are growing at the same pace, according to the latest report from Kantar Worldpanel, driven mainly by paid price increases. In the short term, though the FMCG market slowed down in the second quarter, growth in Rural now surpasses that in Urban 4 cities, which includes Ho Chi Minh City, Hanoi, Da Nang, and Can Tho.

The report stated that despite the market slowdown in the short term, the non-food sector continues to enjoy impressive growth and is growing faster than the food sector in both Urban 4 cities and Rural. Dairy and Packaged Foods are the only sectors showing negative performance in Urban and Rural. Within these sectors, big categories (with high value contributions to total FMCG) such as Milk Powder (Urban), Fish Sauce, Cooking Aids, and Instant Noodle (Rural) fell in volume consumption during the second quarter.

Liquid Detergent is the most outstanding category in the Home Care sector. The category is doing well in terms of both attracting more new shoppers and also increasing volume consumption. Is this led by rising washing machine ownership, which now accounts for 83 per cent (+4.5 percentage points versus year ago) in Urban 4 cities and 28 per cent (+4.0 percentage points versus year ago) in Rural Vietnam? These numbers show huge potential to tap into this market.

Modern Trade channels continue to grow ahead of the market at double digit rates in Urban areas thanks to gaining more traffic. Most key retailers in Hyper & Supermarket are recovering. With a good performance during the first half of this year, modern retail is expected to maintain its momentum and achieve greater growth by the end of 2017.

Kantar Worldpanel is a global expert in shoppers’ behavior. Through continuous monitoring, advanced analytics, and tailored solutions, it inspires successful decisions by brand owners, retailers, market analysts, and government organizations globally. With over 60 years of experience, a team of 3,500, and services covering 60 countries directly or through partners, Kantar Worldpanel turns purchase behavior into competitive advantage in markets as diverse as FMCG and baby products, among many others.

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