Vietnam Insight E-book
Introduction
A message from
Managing Director
Welcome to Kantar’s Insight Ebook 2021, the
special edition.
I know all of us still face many challenges
caused by the on-going COVID-19 pandemic.
The escalation of the situation globally
has resulted in many uncertainties and
unpredictable effects on economic and
business activities that we might not yet fully
observe. As a consequence, this will continue
to make consumer daily lives, and their
behaviors evolve with more complexity.
Vietnam, relatively speaking was less
impacted thanks to the significant efforts
from the government, local authorities and
citizens since the very beginning. Vietnam
was one of the few countries sustaining a
positive GDP growth in 2020 whereas many
1
Fabrice Carrasco
Managing Director, Vietnam & Philippines
Asia Strategic Projects Director
Worldpanel Division, Kantar
other economies experienced a negative
performance. However, it was still a very tough
year for Vietnam with not only COVID-19 but
also other disasters hitting the country during
the year such as droughts, storms and floods,
slowing down the economic development with
a 30-year low.
Therefore, we wanted to focus this 2021 special
edition Insight Ebook to share with you what
we have learnt throughout 2020, and then
giving perspective and outlook for 2021 and
beyond.
We hope that it will help you well prepare for
the future and draw up business strategies to
return and to surpass your targets this year.
We wish to continue contributing to your
success!
Introduction
Dear Friends
and Partners,
2
2020 will be a year that nobody forgets.
Globally, the pandemic impacted our lives and
daily routines, which were thrown upside down
thanks to mass lockdowns and the resultant
public health crisis.
We see Vietnam’s GDP growth stutter with an
increased concern for job security, and lower
incomes, which will likely lead to less demand
for products and services. In such context, we
also witness that Vietnamese consumers have
showed a fast response to the development of
the COVID-19 situation, reflected from the way
people interact with friends and family, to the
way they shop and the media they consume,
leading to changes in their spending priorities
and purchasing behaviors as well.
market during 2020 are the acceleration of
online shopping and the evolution of retail
landscape toward modern formats, the higher
priority on health and wellbeing but from
reactive approach to proactive health care
and the shift to value and essentials among
Vietnamese consumers amid the COVID-19.
The ability to embrace these changes in order
to anticipate and meet consumers’ emerging
needs will be a competitive advantage
for businesses. In fact, we do see many
brands achieving healthy growth or at least
minimizing the loss by moving fast to capture
new growth opportunities, given a challenging
business environment.
With this 2021 special edition Insight Ebook,
we want to help you better understand the key
That said FMCG market benefited from the
changes in people’s behaviors in order for your
crisis with more time spent at home and
businesses to not only react in time but also
products such as packaged foods, and hygiene realize the opportunities in front of you.
items being bought and used more. Some
of the top things we have observed in FMCG
Happy reading!
Peter Christou
Commercial Director, Vietnam
Worldpanel Division, Kantar
Table of
Contents
9 Things to
Remember in 2020
The Positive Growth of Vietnam Economy
Divergence & Polarization in Consumer Behavior
Higher Priority on Health & Immunity
The Extreme Focus on Hygiene and Sanitation
Online FMCG Shopping Habits Updates in 2020
Polarizing Health & Beauty Market
Growing Sustainability Concern
Modern Trade Prosperity in Rural
The Role of Gifting
The Shift to Value & Essentials
Outlook in
2021 and beyond
Vietnam Economy: Optimistic for 2021
Prospects for FMCG: A Regional Perspective
What’s Next for Health & Well-being?
Tet Gifting Evolution
Quality Assurance
3
About Kantar
& Contributors
04
05
08
11
00
17
23
28
31
36
41
47
48
49
50
51
52
53
9 Things to
Remember
in 2020
4
Vietnam economy
sustained growth
amid COVID-19
5
6
5
2
1.9
0.2
-1.5
-2.5
-2.8
-4.4
-5
nd
Th
ai
la
al
ay
sia
M
di
a
bo
m
Ca
sia
La
os
in
a
Ch
do
ne
In
M
ya
nm
ar
-10
-8.3
ne
s
-7.1
pi
-7.5
Ph
ilip
-6
ld
0
W
or
2.5
2.8
Vi
et
na
m
Despite a prolong impact of COVID-19 on
Vietnam, resulting in the deceleration of GDP
growth as the lowest growth rate over the
past 10 years, it is still considered as a success
compared to other countries amid the health
crisis. The CPI remains stable coupled with the
fast rebound of retail sales of consumer goods
given a challenging business environment and
rising consumer concerns about job security
and income. This holds promising prospects for
Vietnam in 2021.
GDP growth - World Bank’s forecast
percent
While most countries are still in different
levels of lockdown with a continued increase
of new cases, businesses and activities in
Vietnam have resumed operation since early
quarter 2 thanks to well coping with COVID-19
pandemic from the very beginning. As such,
Vietnam economy currently shows strong
growth patterns, particularly in the last two
quarters of 2020, making it become one
of the few economies sustaining a positive
performance in 2020.
Bright economic
outlook in 2021
• FDI was hit hard in 2020. However, given the successful
containment of COVID-19 in Vietnam together with the
vaccine rollout plan at global level, Vietnam remains a
potential destination to invest in.
• In the first three months of the year, almost 35,000
businesses went bankrupt, urban unemployment rate
hits 10-year high in Vietnam (3.7%), yet ranked as top
10 countries having the lowest figures. (Vnexpress /
Vietnamtimes)
Vietnam’s Economic Outlook
24.5
GDP Growth %
24.2
Retail Sales of
Consumer Goods
CPI
18.7
16.0
12.6
9.1
9.2
6.8
10.6
5.9
6.6
5.3
5.4
9.5
6.7
6.0
4.1
10.2
6.2
2.7
12.0
6.8
3.5
12.4
7.1
12.7
6.8
7.0
3.5
2.8
2.9 3.2
9-10%
6-6.9%
3.2
0.6
• Export and Import sustain a healthy growth at 7% and
4% respectively, promising a fast recovery in 2021
once borders reopen.
• Following the COVID-19 pandemic, environmental
issues (climate changes, air pollution, plastic pollution,…)
become one of top concerns to cope with.
• The unforeseen and unpredictable development of
COVID19 still has a certain impact on consumer
demands and habits.
7
Source: GSO Vietnam
2010
2011
2012
2013
2014
EXPECTATION
for the next 5 years
2015
2016
2017
GDP
6%
~7%
from
2018
2019
2020
CPI
3%
~4%
from
2021F
Divergence &
Polarization in
Consumer Behavior
8
Top concerns among Vietnamese
households under COVID-19
(Rank change vs Q4 2019)
1
Health
& Wellness
2
3
4
5
6
Food Safety
Under the context of the health crisis, there
are emerging concerns among Vietnamese
consumers. They more worry not only about
health but also about the financial situation
and the rising cost of living as a result of the
economic impact of the pandemic. This will
considerably influence their priorities and
spending habits in 2021.
We witness that Vietnamese people show
a fast response to the development of the
pandemic over time. While more than half of
them still see optimistic future, more people
are not confident about their financial status
compared to the pre-COVID-19 level.
Moreover, the future perspective is not the
same among different consumer groups as
Households
Income
Job Security
Enviromental
Pollution
Natural
Disasters
there are different effects of COVID-19 on
each group (income, region, age, etc...).
This will be reflected on how they respond
and behave differently in the coming time,
leading to a polarization and divergence of
preferences and choices. Some of the trends
we could expect to see as the situation evolves
are down-trading and more belt-tightening for
future needs, especially among lower income
groups. On the opposite side, people with
higher incomes might seek for more treats and
indulgences to improve wellbeing and quality
of life.
Therefore, understanding what has been
changing in each consumer group is critical to
anticipate future demands and trends to win
over them.
The economic situation will be better or the
same as today in the next 12 months
Movement
control order
was lifted in May
86
Very first
infected
cases
% Agree in
Urban 4 key cities
Source: Worldpanel Division | Households Panel | Urban Vietnam 4 key cities | Updated to Q4 2020
74
62
42
Avg 2019
9
80
News of
second wave
in Danang
Q1 2020
Q2 2020
Source: Worldpanel Division | Households Panel | Urban Vietnam 4 key cities
Q3 2020
Q4 2020
In the upcoming 12 months, do you
think that the financial situation in
your house…
The lower income, the more sensitive and
worried they are. The products/services
targeting to this group of consumers can focus
more on the messages about affordability/
value for money to win consumers’ hearts.
% Agree in Urban 4 key cities
How do you evaluate the current financial
situation of your Household?
3
16
7
9
8
5
8
29
41
44
45
43
47
48
33
40
42
8
7
7
7
7
12
6
Avg 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Total HH
Will get
much worst
10
41
Will get worst
Will remain the
same
Will slightly
improve
Source: Worldpanel Division | Households Panel | Urban Vietnam 4 key cities
Will strongly
improve
6
7
We are not
doing well
at all
HH Income
>10 - <=17mln
We need to
deprive ourselves
sometims
47
22
10
8
12
3
HH Income
<=10mln
21
50
49
43
3
29
30
36
43
4
7
It comes out
correctly
8
HH Income
>17 - <=26mln
HH Income
<26mln
We have enough
money to allow
us some extras
once in a while
No finacial
worries, we
don’t need to
pay attention
Source: Worldpanel Division | Households Panel | Urban Vietnam 4 key cities | Updated to Q3 2020
Higher Priority
on Health
& Immunity
11
As lifestyle diseases (e.g., obesity, stress)
become commonplace, health rises to be a
top priority among Vietnamese consumers.
With the accessibility of health information
online, consumers deepen their understanding
of health and more cautious about anything
they consume. Appearing at the end of 2019,
Covid-19 has a great influence on health
perception and budget of consumers, which
leads to the some major changes in Healthrelated trends.
Of all the drinking motivations, Health
accounts for 13% with very diverse needs.
Besides improving health, new motivations are
emerging including detox, skin beauty, support
digestion. Three key trends in nutritional
market are believed to become norm one day:
plant-based nutrition drinks, sugar reduction,
and immunity boosters.
12
1
2
3
Vietnamese consumers are eating and drinking plantbased alternatives that are perceived to be natural and
healthier. The category enjoys healthy growth, which is
driven by both buyer base expansion and consumption
uplifting among current buyers.
Being more aware of potential health problems, Less/
No-Sugar products are increasingly chosen and become
more attractive. Liquid Milk, RTD Tea, CSD and mostly
recently is Soya Milk witnessed an impressive performance
of total Less/No-Sugar segment.
Consumers are now consciously and actively managing
their diet to prevent illness and stay healthy –incorporating
health boosters. In a year upended by COVID-19, it seems
as if our immune systems have received more attention
than ever before.
Towards
Healthier
Consumption
What’s driving this trend?
Drinking motivation?
79%
13%
of Vietnamese agree they are
ready to pay a higher price for
healthier foods (2019)
As lifestyle diseases (e.g. obesity, stress)
become commonplace, health rises to be
a top priority among urban Vietnamese
consumers. Of all the drinking motivations,
Health accounts for 13% with very diverse
needs.
15%
of Vietnam’s 95 million population
has mental illness due to stress,
especially amongst the youth for
stress in work or school (2019)
87%
Health motivations
Other motivations
• Improve Health
• Detox
• Support Digestion
• Sleep Well
• For Skin Beauty
• Control Weight
Who?
Female, age group of
19-34 and above 45+
YO have more health
drinking purpose
3 Trends To Inspire Initiatives
Plant based
nutritional drink
13
Source: Kantar Worldpanel | Drinking Usage Study 2019 | Vietnam 4 key urban
cities | Non alcohol beverages and Nutrition - VnExpress, Vietnam Insider
Shifting away
from sugar
Immunity Boosters
1. Plant Based
Nutrition Drink
Category performance
Val growth %
+5.1
48.5
47.3
12.9
Vietnamese consumers are eating and
drinking plant-based alternatives that are
perceived to be natural and healthier. The
category enjoys a healthy growth, which is
driven by both buyer base expansion and
consumption uplifting among current buyers.
12.1
Top Growing Segment
+13.2
value share % | value growth %
50.9
12.1
+342%
+17%
11%
6%
MAT
Q3’20
Soya base
Rice base
Other nuts base
MAT Q3’18
MAT Q3’19
Volume per buyer (L)
83%
MAT Q3’20
Penetration %
+7%
Top Drinking Occasion?
% drinking occasion
Index vs total NAB
Regular/everyday drink
26
24
While having meal
21
Doing activities
11
Break from work/study
14
218
139
114
Doing housework
4
131
While working/studying
4
76
Drink after work
Source: Kantar Worldpanel | Household Panel & Drinking Usage Study 2019 |
Vietnam 4 key urban cities | Plant-based drinks | MAT
64
2
76
2. Shifting
Away from
Sugar
Liquid Milk - %Volume
8.1
9.4
Being more aware of potential health
problems, Less sugar/ No-Sugar products are
increasingly chosen and become attractive.
This trend is believed to be a norm one day.
9.7
18.8
19.7
MAT Q3’18
12.5
20.4
MAT Q3’19
Less Sweetened
RTD tea no/
less sugar
Milo new less
sugar variant
% No/less sugar buyer
among RTD Tea buyers
MAT Q3’20
3.6
MAT P4’18
4.3
MAT P4’19
MAT P4’20
Plain
% penetration of Less Sugar Segment of Soya Milk
Vinamilk and TH less
sugar Liquid Milk
11.1
“I prefer to buy low/ free
sugar drinks” - % Agree
3.3
71
63
Probi less sugar and Probi light (less fat)
15
2010
Source: Worldpanel Division | Households Panel & Lifestyle Survey 2018 |
Urban 4 Cities Vietnam
2019
Soya milk less sugar variant
MAT Q3’19
MAT Q3’20
3. Immunity
Boosters
“Consumers seek immunity-boosting and
nutrition products, especially for seniors
and kids who are at higher risk. Therefore,
specialty milk powder and drinking yogurt
are more favored to stay healthy”
– Consumer and retail changes with COVID-19, Worldpanel Division, Kantar
16
Consumers are now consciously and actively
managing their diet to prevent illness and stay
healthy –incorporating health boosters
Successful case & how: Vinamilk Probi
Vietnam 4 key urban cities | Drinking Yogurt | YTD P5’20 vs YA
• Engaged with current situation: immunization and flu prevention message
• Targeting all family members, including the senior who is more vulnerable
under COVID impact. At the same time, launching new flavor honey curcumin
and pushing for the whole portfolio.
• Embrace digital/ online channel: social media, digital content.
• Result: Trips +34%, Penetration +3pts.
The Extreme
Focus on
Hygiene and
Sanitation
17
More hygienefocused for now.
Natural on hold but
still in consideration.
18
With sudden changes in daily hygiene routine
in light of the Covid-19 pandemic the personal
care market has been reshaped in 2020 as we
have witnessed an increased focus on hand
and body hygiene categories. Thanks to the
support of large governmental communication
campaigns – everyone has ever heard or
seen the corona virus handwashing song at
least once last year – consumers have been
reminded that good handwashing practices
and sanitizing several times a day are still the
number one way to protect oneself from this
pandemic. As a result, basic hygiene habits
have been magnified and consumers have
been seeking more for anti infection products
as a contributing effort to prevent any risk of
disease. Hand sanitizer flew off the shelves
as what has become an ‘essential’ Covid-19
sanitary item and alongside this hand and
body soap also soared.
Natural ingredients and environmentally
friendly products might not have been the
buzz this year across FMCG categories.
However, consumers are gradually more
and more seeking for products that address
those concerns. As a matter of fact, products
that promote natural ingredients and
environmentally friendly impact remained one
of the fastest growing segments within Home
Care this year again. So without a doubt it’s
safe to say that this trend is not completely
out of mind and it is likely to be back this year
as consumers will ultimately pay even more
attention to the end benefits of ingredients
impacting to their body or the planet.
Brands should therefore continue to focus on
communicating end benefits and well-known
source to trigger attention.
Growing demand
for personal
hygiene products
Hand Wash
Sanitizer
Market grew by
Market grew by
96%
The Covid-19 outbreak in 2020 has given a strong boost for
the demand for hygiene products / categories. As a result,
the market is getting even more fragmented with several
new players eager to grasp some share of cake.
+41
1065%
+131
Active variants
to the market
2019
2020
An incremental of
2019
442k
Households
2019
2020
2020
An incremental of
% of HH that purchased Hand wash
19
Source: Worldpanel Division | Households Panel | Urban 4 Cities Vietnam | FY 2020 vs YA
541k
Households
19.2%
2019
+23.6%
Hygiene was the only
segment that enjoyed
positive growth
Active variants
to the market
45.3%
32%
Shower Gel
1.7%
*Shower gel market grew by 5%
2020
% of HH that purchased Sanitizer
Vietnam
Lifebuoy
Hand wash:
be ready, be positive
• Engaged with current situation: COVID-related ads &
communications, “Tram rua tay da chien” campaign
which provides hand sink and hand wash across Vietnam
by invite consumers to participate in donating through
dance competition “Ghen Co Vy”, new launches:
antibacterial wet tissues and hand sanitizer to capture
rising consumer need for hygiene and health prevention.
• Embrace digital/ online channel: social media, digital
content.
• Leverage partnership with retailers: both online platforms
and offline stores
20
COVID period* vs YA
Keep engaged by creating digital contents with
positive messages
• Category growth
in CPR: +340%
Fast response to emerging consumer needs with new
launches: hand sanitizer, wet tissue
• Lifebuoy growth
in CRP: +215%
(+385,800 new households in
Urban 4 cities)
Stand with communities and embrace
corporate social responsibility
Hygiene and healthier
eating habit will be expected
to carry on post Covid
What are the behaviours that you think you’re most
likely to maintain once the lockdown is over?
60
59
55
Wave 4
52
49
50
40
40
35
33
31
30
29
24
20
10
0
Increased
overall hygiene
21
Eat healthier
Spending time
with the people in
my household
Online shopping
Using online
media
Focus on
my personal
development
Working from
home
Connecting
virtually
Social media
apps usage
Reading
The Rise of Nature/
Sensitive Segment
in Homecare
Nature/ Sensitive across Home Care
CRP growth (%) in FY20 vs FY19
Total Category
Nature/ Sensitive
38.1
5.9
0.9
-1.7
Detergent
Nature/ Sensitive segment has gained traction across
major homecare categories, driven by up-trading economy
users and converting fragrance lovers.
170.9
-5.0
Dishwashing Liquid
Fabric Softener
Top Segments converted by Nature/ Sensitive
Up-trading low tier users
Converting fragrance lovers
Top Performers within Nature/ Sensitive
In buyers change FY20 vs FY19
Detergent
22
Source: Kantar – Worldpanel Division – Households Panel – Urban 4 key cities – Excluding Gift
Dishwashing Liquid
Fabric Softener
Online FMCG
Shopping Habits
Updates in 2020
23
24
Online remains one of the fastest growing
channels for FMCG in Vietnam. More and
more families adopting this channel as part
of their FMCG shopping habits is the main
driver behind this expansion and the Covid-19
outbreak this year clearly acted as a catalyst.
Even post the first waves of panic purchases,
when shopper channel choice is returning to
normal, online maintains.
Channel basket and spend shift account for
a significant portion of online growth but
not only! Incrementality within the channel
(i.e., the same shopper repeats its purchase
within the channel and spend more) is also
important for non-food categories. This
indicates that new shoppers’ attraction and
shoppers’ loyalty are both equally important
in driving online value growth today.
Close to 5% of FMCG annual value spent is
now generated by online shopping habits and
this will continue to increase in coming future
given current context combined with the
rapid expansion of the competition and offer
to attract shoppers. Personal Care products
enjoy highest penetration and frequency today
within the channel. However, purchase for
Home Care products have started to take off
as well. In fact, Home Care categories lead for
the spend growth within online over the past 2
years.
Considering the growth of online and that it
does help in getting incremental growth, it
is a channel which any manufacturer should
keep focusing on and adapt their strategy as
it evolves. Promotion is one of the key drivers
for shoppers to shop online hence offering
attractive and disruptive schemes together
with engaging product display and stories are
likely help build online penetration further.
Online – FMCG Penetration % - 12 w/e
Vietnamese households shopping for FMCG Online keeps
expanding and Covid-19 outbreak this year acted as a
catalyst. As penetration shoot up this year, when comparing
Vietnam with other SEA countries, a 6% gap has opened up
versus Thailand.
Urban (4 cities):
HCMC
25
34.5% MAT Q2’20
Hanoi
20
Rural
15
Urban:
28.2% MAT Q2’20
10
Urban:
23.1% MAT Q2’20
5
25
Source: Worldpanel Division | Household panel | Urban 4 key cities | FMCG Excluding Gift
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Urban:
13% MAT Q2’20
Which family
buy FMCG
online today?
Who is shopping?
% households
• Convenience.
• Wide/ better range of choice.
• Attractive and unique deals.
• Price comparison.
• Availability of information.
Channel behavior
In HCMC
(56%, index 102 vs. All Retailers).
Penetration %
Housewife under 40 y.o
(46%, index 134 vs. All Retailers).
Repeat rate (*) %
Families with 4+ members
(72%, index 110 vs. All Retailers)
Families with kids
(44%, index 124 vs. All Retailers)
High income families
(30%, index 124 vs. All Retailers)
26
Strengths
Value Loyalty (**)
34.5% (1.04 mil HHs)
63%
Frequency (times/year)
4.8
10%
Online shoppers
spend Online
The remaining
90% is spent in
other channels
Spend per trip
329k/trip
(*) Repeat rates - % of shoppers shopping
more than once in the channel.
(**) Value loyalty shows basket share of channel shoppers
for this channel when buying FMCG
Online
Top Key Categories
Top Recruiting Categories
Based on index of value share vs MT
Beauty & Cosmetics
27
Based on Penetration change
Mom & Baby
1
Lip Make-up
1
Baby Diaper
1
Facial wash
2
Facial Moisturizer
2
Infant Cereal
2
Hand Hygiene
3
Face Make-up
3
IFT Milk Powder
3
Toothpaste
4
Fragrance
4
Shampoo
5
Mask
5
Shower Gel
An In-depth
Understanding
of China
E-commerce
One of the world’s most
advanced Ecommerce market
Jason Yu
Managing Director, Greater China
Kantar Worlpdanel
28
The main source of FMCG E-commerce growth
The future growth of FMCG Ecommerce
In the past, Ecommerce platforms sell more niche, high
end and imported products in China, but now the price
gap between online and offline has increasingly narrowed.
As more and more consumers are used to buying their
daily essentials through online channels, it presents more
cannibalization to brick and mortar stores. However, the
online channel still generates sizable incremental sales
especially on emerging products and categories.
Penetration in FMCG Ecommerce still has room to improve
from the current 70% mark, especially among older
demographics and consumers living in lower tier cities and
rural China. Additionally, Ecommerce is not only considered
as a sales channel, but a key marketing channel for brands
as they start to build innovations out of this channel
i.e. live streaming or short videos to engage consumers
and also provide a holistic place for social media and
content marketing. Brands will be able to fully digitize
their consumer experience journey throughout the wider
Ecommerce ecosystem, helping them achieve successful
brand building and shopper acquisition at the same time.
Along the development of Ecommerce from expansion to
maturity stage in China, we will likely observe an increasing
convergence of offers. Some brands will reduce their
physical store presence and put their focus mainly on
Ecommerce platforms.
On the other hand, as consumers buy more categories
online from tier 1 group to tier 2/3 group, it means an
The increased diversity of online repertoire.
expansion in their basket size and shopping frequency.
With a lot of online promotions pushed through
In addition to non-FMCG items such as fashion, electronics, Ecommerce festivals like Double 11, their spending on
etc., FMCG products like baby care and cosmetic
FMCG via online channel will further increase.
categories (skincare, makeup) are still tier 1 categories with
highest penetration in China. However, the COVID-19 crisis
boosted their online penetration by an unprecedented
seven percentage points or more, according to Kantar
Worldpanel China’s data in 2020. Furthermore, we are also
seeing tier 2/3 categories such as personal wash, paper
products and hair care products rapidly growing through
online, indicating an enormous potential to further expand.
Polarizing Health
& Beauty Market
29
COVID-19 has transformed
the beauty industry
all around the world
which Vietnam is not
an exception. When
some categories related
to health and hygiene
benefit from pandemic,
the others either sustain or
suffer severe impact.
1 Growth Categories
• Sectors that are doing better than before the pandemic
due to increased awareness of hygiene, including
handwash & care, mouth rinse
• Sectors benefit from the movement from out of home
to in-home (Hair colorant) and stocking up for in-home
consumption (Diaper, Sanitary Napkin)
2 Stable Categories
Sectors are unlikely to be impacted by pandemic since
they are considered as essential products and already
penetrated most of household (Shampoo, Shower Gel,
Toothpaste, Toothbrush)
3 Impact Categories
• V shape recovery: Before the pandemic, they are rising
sectors. The disruption caused by the pandemic has
impacted in these developing categories, yet they
rebound quickly right after movement control order
lifted (Skin care, Sun Protection)
• L shape recovery: They are low penetrated categories
and are regarded as nice-to-have products. Then the
pandemic hits hardly on these categories which take
them longer time to come back to normal (Make up,
Perfume & Deodorant, Hair styling)
30
Vietnam witnesses a much brighter picture than fellow Asia
Health & Beauty markets, even well-established ones such as
China & Korea – with most of the sub-categories maintain
good growth. However, Make up is a category still suffering
across all Asia due to less going out occasions.
Personal care Recovery
(Sales CH% YTD on YTD)
31
China
Korea
Taiwan
Thailand
Vietnam
Indonesia
Personal Care
Body Care
Hair Care
Skin Care
Make Up
Source: Worldpanel Division | Household panel | Asia Beauty
Report 2020
On-going
Beauty Trend?
Premiumization
Continues to Prevail
Despite Pandemic
Premiumization is seen in Personal care and
become vital engine of growth of this sector.
Although there is financial concern during
pandemic, Personal care manages to upgrade
thanks to support from High income group.
Online and Health & Beauty stores are key for
premium offers
Fiercer competition
The competition in personal care became
fiercer with the joining of new innovations
which places a pressure on big manufacturers
to extend their product lines beside protecting
the core
Special Ingredient
Products
Beauty Trend
Eco Friendly Solutions
From Manufacturers: “Green” & eco-friendly
offerings/solutions i.e. recycle materials,
“natural” design to protect nature &
environment and promote sustainable living
From Consumers: Consumers approve the idea
of environment friendly packaging rather them
bringing their own packages to the store
32
More and more consumers are buying into
the category of dermatological. Emerging
pharmaceutical products (Cetaphil, La
Roche Posay, Bioderma, Vichy, Eucerin,
Neutrogena…) with light ingredients suitable
for all skin types are now recommended by
experts & adopted more by consumers. The
introduction of ingredients for specific skin
problems & create great improvements (AHA/
BHA, retinol, vitamin C, Niacinamide…)
Advanced Technology
All players are leveraging advanced
applications of technology (chatbot, virtual
try-on, etc.) to offer tailored made experience
E-commerce
Booming
Majority of shoppers tend to shop at
1 platform. Focus on major platforms
(Facebook, Shopee, Tiki) with the
largest traffic!
Online expands share rapidly in a
year for Personal Care and currently
account for 3 out 10 dong respectively
for real purchase of Cosmetics, and it’s
even higher for Make-up.
of Personal Care
buyers still shop at
only 1 platform
% Value Share of E-commerce
Personal Care
%Value
Growth vs
YA
Make Up
+63%
Female Skin Care
+25%
+55%
Penetration % in Personal Care
32.4
25
8.1
5.2
2018
33
2020
2018
2020
2018
19
14.5
10.5
2020
Source: Worldpanel Division | Household panel | Urban 4 key cities | Personal Care excluding Gift
2020
29.7
19.3
12.2
2018
Online
Social Commerce
16.5
8.2
E-com
9.5
2.3 2.7
2.8
Lazada
Shopee
0.7
4.1
Tiki
1.7
0
Sendo
4 4.4
Others
Growing
Sustainability
Concern
34
Did you know?
However
What stops
Vietnamese
consumers from
living more green?
A quarter of Vietnamese consumers say
recycling is inconvenient.
79%
Consumers frequently go
on a grocery shopping
trip without their bag/
basket to carry their
purchase.
Food safety, plastic waste and water pollution
are the top 3 concerns among Vietnamese
people. However, they still find it hard to
change their habit of using plastic.
35
Source: Kantar Worldpanel | Who cares who does report 2020
• Barriers in
knowledge.
And a half say
“It’s too confusing
to know what can
be recycled.”
+80%
• Their belief that
environment is
not that bad.
People agree
There is already a high awareness that
recycling will reduce pollution and safe
natural resources.
Barriers
Vietnam is the world’s 4th largest
marine plastic polluter with 50
billion plastic bags used per year.
= 10 plastic bags / week / person.
Manufacturers
are expected
the most to take
action in reducing
environmental
impact.
• Barriers in
distribution and
price in reaching
green products.
25
4
29
Manufactures
44
Government
Consumers
Retailers
Some already did a good job.
Unilever’s
refill station
Nestle
Vietnam
Vinamilk
Eco-friendly
packaging
Did you know?
#1
Only
The number of consumers can
recall brands that they are doing
good deeds for the environment
are still limited.
Big gap in Vietnam –
desire - action onus on manufacturers
to make it easy for consumers.
What’s
next?
#2
Stronger, authentic communication
about the good deeds to drive
awareness.
#3
Sustainability is NO LONGER JUST A
NICE THING TO DO and should be a
critical part of any business strategy
moving forward.
36
Source: Kantar Worldpanel | Who cares who does report 2020
Modern Trade
Prosperity in Rural
37
Modern Trade is
expanding significantly
in Rural, especially
Minimarket with
spend/trip is almost as
much as Urban
% Value share
% Value growth
2.3
2.9
3.5
15.8
14.9
13.5
76.3
75.7
75
All retailers
9
10
Traditional trade
8
9
Street Shops
8
9
Wet market
3
0
Specialty stores
2019
2020
Street Shops
Wet Market
Specialty Stores
Direct Sales
GT Others
Modern Trade
Hyper & Super
33
11
82
Minimarket
Online
65
40
33
Modern trade
2018
17
2019 Vs. LY
2020 Vs. LY
Modern Trade in Rural
38
Source: Worldpanel Division | Households Panel | Rural Vietnam | Total FMCG excluding Gift | Data updated to
September 2020
% Penetration
Frequency
Spend/trip (VND)
37%
5.9
166k
+4.7 pts (vs. MAT P9’18)
Urban: 87.3%
(Urban: 27 times/year)
(2.2X Traditional
Trade) +10% vs. year
ago (Urban: 171k)
***
Additionally, minimarkets
are winning rural
consumers with the
aggressive expansion of
Bach Hoa Xanh, opening
up huge opportunity to
further surge
Minimarkets - % Penetration
3%
2018
7%
2019
2020
Shopper base are x6 within 2 years, acquiring more than 2
households.
million new rural
Rural shoppers spend the same amount (103k VNĐ)
for each trip, compared to Urban citizens… and shop there
every quarter, likewise in Hyper & Super.
Bach Hoa Xanh is now the main retailer, which
has already reached 12% of Rural households with the
stronghold South.
39
Source: Worldpanel Division | Households Panel | Rural Vietnam | Total FMCG excluding Gift | Data updated to
September 2020
North
0.6
Central
15.2
South
33.5
Interestingly, the channel
appeals to all demo
groups in Rural yet skews
more to affluent families,
thanks to its competitive
advantages
% shoppers in Minimarket
by demographic
30
25
20
15
10
5
2019
0
2020
Low Income
HH
Mid-low
Income HH
Mid-high
Income HH
High
Income HH
Key Advantages
Source: Worldpanel Division | Households Panel | Rural Vietnam | Total FMCG excluding Gift | Data updated to
40 September 2020
Product assortment
Product assortment
Similar to modernized street shops
yet offering a wider/ more diverse
range of products/ choices, high
quality/ premium choices.
Hybrid format between street
shops & wet markets to offer
branded fresh foods/ or with
product origins.
Summary
Though Traditional Trade is still
the essential channel of Rural
consumers, the improvement of
income as well as living standard
leads to the prosperity of Modern
Trade in Rural. This emerging
channel is expanding the buyer
base significantly and becoming
more and more familiar with Rural
shoppers, especially Minimarket
that enjoys 3-digit growth.
41
Convenience and Hygiene are
2 most important factors that
help Modern Trade win in Rural
since these are top criterion of
Rural consumers when choosing
shopping store. Besides, wide
range of product assortment and
high product quality are crucial to
attract more traffics while helpful
staff helps in building up retention
and repurchase rate.
Key shoppers of Minimarket are
Households with high income
but the recruitment among lower
one is also on good momentum,
showing huge opportunity to
diversify buyer profile.
Bach Hoa Xanh is a key highlight
for the flourishing of Minimarket in
Rural, that’s been reaching more
than 1/3 South Rural citizens.
The Role
of Gifting
42
Giving gifts on Tet Festival (aka Lunar New Year) has been
a traditional custom in Vietnam’s ancient culture for years,
expressing not only the gratitude towards someone but
also the care to each other. As a result, consumer spend
on gifting accounts for a significant proportion of total
FMCG spend during Tet period. However, we witness the
reduction of gifting occasions last Tet 2020, which could be
explained by the changes in consumer lifestyles towards
modernization.
Looking to Tet 2021 preparation, gifting is still an important
culture among Vietnamese consumers. Beside money,
consumer packaged goods are their preferable options for
gifting such as biscuits, soft drinks and beer. In addition
to these most typical Tet products, the rise of gifting
occasions with nutritional and convenient products has
been observed during recent years, offering new choices
for consumers and new chances for brands to tap into.
43
Although Gifting
declines in the last
Tet period, the role
of gifting remains
very important in Tet
% Value growth of Gifting across years
(Tet period vs YA)
50
40
30
Urban
4 Cities
20
10
Rural
0
-10
-20
Tet 2017
Tet 2018
Tet 2019
Tet 2020
% Value share in Tet basket – Tet 2020
(For Urban 4 Cities & Rural)
29%
71%
Source: Worldpanel Division | Household Panel | Urban
44 Vietnam 4 key cities & Rural | FMCG
Gifting
Real Purchases
Almost every
household has
plans to give gifts
to others in the
upcoming Tet 2021
% Plan to give gifts before Tet 2021
88%
Urban 4 Cities
82%
Rural
-2pts vs Tet 2020
+10pts vs Tet 2020
45
Source: Worldpanel Division | Households Panel | Urban 4 key cities & Rural
Vietnam | Tet 2021 Survey
Top 5 Gifts at Tet 2021
1 - Money
2 - Biscuits/ Candy Jam
3 - Alcoholic drink
4 - Mixed basket gifts
5 - Clothing/ Shoes/ Jewelry
Top 5 Gifts at Tet 2021
1 - Money
2 - Biscuits/ Candy Jam
3 - Soft drink
4 - Alcoholic drink
5 - Fresh food
Top 5 most chosen
categories for Tet gifting
Top rising categories for
Tet gifting
Based on % Occasion
Based on % Occasion change
Biscuits & Cakes
Snack & Nuts
Beer
Liquid Milk
Carbonated Soft
Drinks
Sweetened
Condensed Milk
Instant Coffee
Sauces
Cooking Aids
Source: Worldpanel Division | Households Panel | Urban 4 key cities & Rural
46 Vietnam | FMCG Gifts only | Tet 2020
The Shift to Value
& Essentials
47
Vietnamese consumers experienced an abnormal year with
many limitations, in social and financial matters.
Schools were closed for months. Work was shifted to home.
Similar to other countries, consumers in Vietnam did shift
their spending to essentials, while cutting back on most
discretionary categories, especially travel. Engagement in
out-of-home activities is also lower even after restrictions
had been lifted.
On the contrary, FMCG and Food as essential products are
occupying bigger shares in household expenditure. This led
to positive performance of FMCG in-home market, which
posted an 10% growth in value. This growth stems from
higher volume consumption while average consumer price
remains relatively unchanged.
Additionally, although consumer choices toward products
vary across categories, the shifting to lower-priced offers is
universally observed in nearly 60% FMCG categories, from
food to non-food sectors. This could be a consequence of
the budget limitation due to cautious spending. Hence,
manufacturers and retailers who focused on affordable
offers and saving messages have bigger opportunities to
stay relevant and ahead in competition.
48
Spending cut on
transportation,
entertainment, travelling
and saving at the expenses
of Food & CPG is common
behavior of Vietnamese
households in 2020.
49
URBAN
2018
2019
2020
Food + CPG
36.9
37.4
40.8
Household
Transportation
5.5
4.9
4.7
Household
Entertainment
2.7
2.8
2.4
Household Savings
11.3
11.3
10.2
Household Travel
/Holiday
5.1
4.9
3
RURAL
2018
2019
2020
Food + CPG
31.1
32.6
33.7
Household
Transportation
4.5
4.5
3.9
Household
Entertainment
0.9
1.0
1.1
Household Savings
13.2
13.2
12.3
Household Travel
/Holiday
1.6
1.6
0.8
FMCG as considered
as essentials in 2020
showed a strong growth
in both urban 4 key cities
and rural, mainly driven
by the higher volume
consumption. Meanwhile,
the price change is even
lower than CPI.
% YOY FMCG change
Urban 4 Cities
Value
10%
9%
10%
6%
6%
2%
2018 2019 2020
2018 2019 2020
Volume
7%
4%
4%
6%
7%
0%
2018 2019 2020
2018 2019 2020
Paid Price
2.4%
2.6%
2.9%
2018 2019 2020
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities & Rural
50 Vietnam | Total FMCG excluding Gift | 1 year ending 3/01/2021
Rural
*: To calculate FMCG price paid change, we
calculate how much price contributes to the
value change for each category, sum up
these contributions and relate to value
2.5%
3.0%
2.7%
2018 2019 2020
YA**: To calculate FMCG volume change, we calculate how
much volume contributes to the value change for each
category, sum up these contributions and relate to value YA
(this results in an average category change in volume)
Switching to lower priced offers is a way to manage the
spending budget on FMCG in this difficult time. Nearly 60%
FMCG categories are suffering downtrading, including both
Food and Non Food categories
% Value growth
80%
60%
40%
20%
-15%
-10%
-5%
0%
0%
2%
-20%
-40%
-60%
51
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities & Rural
Vietnam | Total FMCG excluding Gift | 1 year ending 3/01/2021
5%
10%
15%
20%
25%
% Price change
The shift to value
Saving offers/
messages are
emphasized a lot by
many brands to stay
relevant to consumers
+43% value
Vinmart +33% value
Vinmart+
90 – 20% bigger
Kokomi
with same price
14%
Urban households after 1
Reached
year of launching (vs. 4.2% market norm)
Surf liquid detergent
+95% in value in Urban (vs. last year)
52
Outlook in
2021 and
Beyond
53
Vietnam economy:
Optimistic for 2021
According to Vietnam Institute of Economics, the impact of COVID-19 hit Vietnam
economy much harder than that of the 1997 Asian financial crisis and the 20072008 global financial crisis. These two crises caused the lowest growth rate of
4.77% in 1999 and 5.40% in 2009, which are still higher than the 2020’s economic
growth (2.91%). However, the effects of COVID-19 are likely temporary, and will not
last as long as the two mentioned financial crises. In fact, there are many industries
that being heavily affected by the health crisis but also many businesses benefited
from it. This is very different from what happened amid the financial crisis when
most industries were negatively affected.
Vietnam economy currently shows a fast recovery, particularly in quarter 3 and 4
of 2020, promising a brighter outlook in 2021. Depending on the world’s economic
situation and the country’s attractiveness for foreign direct investment, Vietnam’s
2021 economic growth is projected with three economic scenarios:
Scenario 1
GDP growth at
Scenario 2
GDP growth at
Scenario 3
GDP growth at
3.48% 5.49% 6.9%
(the lowest)
54
Source: GSO
(the highest)
• IMF predicts the Vietnam economy will
• According to local predictions, GDP growth
expand 7.588% in 2021, which is even higher
is projected to recover at 6-6.9% in 2021
compared to the level of pre-COVID19.
as the most optimistic scenario.
(Asia Nikkei)
(Bao Chinh Phu)
Whatever the scenario, there remains both challenges and opportunities.
Opportunity
• The positive economic outlook will attract
more foreign investment, increasing both
capital and employment.
•M
&A activities to rebound and increase with
Vietnam holding second place in the top 20
countries having the highest M&A index.
• Opportunities for export as many global
companies are flocking to Vietnam together
with the effects of CPTPP, EVFTA and inprogress RCEP.
• The rise of digital economy & the
acceleration of digital transformation
pushing the exceptional growth of digital
media, eCommerce, cashless payment,…
play a key role in economic development.
Challenges
• Border closures still have a significant impact • Increasing environmental issues as businesses
and activities resume & unsustainable
on trade, supply chains, consumer demand
exploitation of natural resources, leading to
and travel.
health & well-being issues.
• Consumer might be more cautious in
•B
usiness environment and skills of workforce
spending due to uncertainties, inflation
need to be improved in order to keep up with
& financial concerns, given the increased
the economic development pace.
unemployment rate in key cities.
Forecasting
FMCG Growth in
Vietnam for 2021
• The forecasting model includes 6 metrics that have
different weights of the impact on FMCG sales.
1 - Inflation Rate
2 - Food Inflation
3 - Residential Mobility
4 - Consumer Spending
5 - GDP Growth Rate
6 - Consumer Confidence Index
• Our belief that COVID outbreak contained, and with
vaccination being globally distributed that things will not
get worse, and that both consumer confidence and GDP
growth will improve
• For other metrics, we believe they will be the same as
today or will make insignificant impacts on the results
given the local context and circumstances.
Urban 4 key cities
Beverages
Dairy
Packaged Grocery
Personal Care
Home Care
100%
19%
28.9%
25.2%
17.9%
9%
Sector Value
Contribution
21.3%
10.3%
6.4%
7.9% 8.5%
6.4%
2.2% 2.7% 1.5%
2019 2020 2021
Rural
2019 2020 2021
9.8%
5.3%
11.4% 12.1%
10.1%
6.9%
4.9%
2019 2020 2021
FY Growth Rates
2019 2020 2021
2019 2020 2021
4.6% 4.4%
2019 2020 2021
In Rural, personal care potentially continues to
drive growth, while Beverages recover
In-home FMCG
Beverages
Dairy
Packaged Grocery
Personal Care
Home Care
100%
24.1%
23.8%
30%
13.1%
9%
Sector Value
Contribution
14.6%
8.6%
10.2%
8.7%
7.3%
16.6%
14.8%
13.6%
12.6%
11.4%
5.6%
5.4%
2019 2020 2021
2019 2020 2021
12.2%
5.2%
11.1%
9.1%
4.3%
1.4%
2019 2020 2021
Residental Mobility (SQ = -3.6)
Status Quo
Food Inflation (SQ = 3%)
Source: Worldpanel Forecasting model & Trading Economics | FMCG data excluding Gifting
FY Growth Rates
In-home FMCG
Inflation Rate (SQ = 1.4%)
55
Growth of packaged foods is expected to
cool, but still at 10%, while personal care is
predicted to grow at double digits in Urban
Status Quo
Status Quo
Consumer Spending (SQ = 4074091 VND Billion)
Status Quo
2019 2020 2021
2019 2020 2021
2019 2020 2021
GDP Growth Rate (SQ = 6.4%)
Slightly Increased
Consumer Confident Index (SQ = 120.5)
Slightly Increased
Prospects for
FMCG: a regional
perspective
Nelson Woo
Regional Commerical Director
Worldpanel Division Asia, Kantar
With a population of more than 90 million, Vietnam remains as a prime market
not only for continued local growth but also an avenue for regional FMCG
players to tap into. We have equally seen how the Vietnamese consumers and
shoppers are improving not only their quantity but quality of life over the past
10 years, a real testament of a very proud nation, thriving to become one of the
leading markets not only in the Asia region but also Globally.
Relatively a young consumer base, growing income per capita and increasing
sophistication of use in both mobile and tech puts Vietnam high on the
attractiveness index for investors, brands and manufacturers alike. In addition,
Vietnam also has a great geographic advantage bordering many Asia countries i.e.
China and also the emerging markets of Indo-China; giving it a massive advantage
as a country to not only build on local consumption but a hub to extend its
reach to other markets as well.
The country is now the 6th most populous country in Asia (behind China, India,
Indonesia, Japan and the Philippines); and could easily outpace to the 5th most
populous market in the region. Coupled with the improvements on standard of
living and a positive growth in both organized trade and E-commerce, it is set to
certainly be a market where every brand and manufacturer will not want to miss.
In 2020, Vietnam’s economic growth at 2.9% despite the very challenging year
of COVID-19 is a testament of the countries that are resilient and strong to cope
and weather the challenges in market. This has also given a strong competitive
advantage to Vietnam compared to other ASEAN countries – allowing it to leapfrog
itself and also giving a strong grounding and growth in the FMCG market.
The challenges manufacturers will face is how they can further drive growth
in a sustainable way amidst rising competition (both with local giants,
regional players and global MNCs) and with the new evolving multichannel,
omnichannel and trade landscape.
56
What’s Next for
Health & Well-being?
COVID-19 pandemic has put mental health and wellbeing
of Vietnamese consumers under great pressure, which
highlights the importance of health priority. In the past
century or even before that, health is about taking medicine
to treat an illness or taking recommended vaccines to
prevent certain diseases. From a fundamental understanding
of health in the past, consumers are broadening their
knowledge with better accessibility of health information
online, and higher adoption of tech to track their health
and nutrition. Therefore, consumers are now shifting from
reactive to proactive when actively managing their diet to
prevent illness and stay healthy – incorporating with health
boosters.
57
Source: GSO
Specifically, COVID-19 – the health crisis of the decade, forces consumers to have
behavioural changes in product choice. This could be brought forward post the
pandemic as new habits, new lifestyles. “Pandemic” basket is fueled with three
key groups of categories including necessary & convenient foods, hygiene items
and nutritional products; reflecting consumer priority towards their essential and
healthy needs during quarantine time.
With healthier lifestyle, for instance, the increased spending on health & hygiene
products will likely to continue as people seek for prevention from the possibility
of another Covid-19 outbreak or the threat of any other viruses that might hit the
world in the future. In that context, consumer demand on health and hygiene will
continue to thrive.
Consumers increasingly desire snack and beverages that can benefit their physical,
mentality or emotional wellness. They look for products with clear functional
benefits and brands with thorough communication on how they promote health
and nutrition:
- Safe, natural & proactive ingredients, nutrients
- Immune-boosting products i.e. probiotics, vitamins, supplements
- High quality products with health benefits
- Plant-based diet
- Premium options for eating & drinking & beauty i.e. organic, vegan
- More indulgence & enjoyment that good for mental health i.e. treats
- Pre-emptive solution for senior population
Outlook for healthcare will be shaped by favourable trends and structural
developments. Health will be about taking snacks and beverages that are
personalised to suit one’s unique health needs, goals as well as knowledge level.
Areas that are related to digital health, genomics and extended longevity should
observe further upside potential over the longer term
Tet Gifting
Evolution
From distant past to present day, the custom of giving gifts during Tet festival has
become a typical culture, adopted by the majority of Vietnamese people. Giving
gift is not only a way to express love and appreciation among family members,
friends or colleagues, but this also represents meaningful wishes for blessings and
luck. The latest survey reveals that almost every household (over 80%) intends to
buy gifts for others in Tet 2021, in which family members are the key recipients.
Gifting has played an important role in every Tet season, contributing a big
proportion to total Tet spending, especially within FMCG industry, though it differs
by sector and market.
Within FMCG basket, biscuits, beer and soft drinks are the top choices of
Vietnamese consumers for Tet gifting. These categories sales during Tet month
usually double and even triple that of a normal month, largely contributed by
gifting occasions. Yet, people have a lower intent to spend on these categories
compared to Tet 2020, according to the survey, while organic or health-related
categories such as nutrition drinks, snack & nuts are quickly capturing consumer
preference. This trend is predicted to be more and more prevalent as health
will be more prioritized after the health crisis. In addition, premiumization and
customization are also the trends that will continue thriving in the next seasons,
reflecting from product innovation to communication in order to meet
the growing taste of Vietnamese consumers.
Noticeably, we see that Tet-gifting custom is getting more simplified recently. Last
Tet 2020, gifting experienced a significant decline in both value and occasions. It
could be the result of consumers’ fast-changing lifestyles towards modernization,
especially in urban areas. Interestingly, there is also a correlation between the
family structure (the number of members) and the number of targets they want to
present gifts: “The smaller household size, the less targets for gifting”. As such,
this could lead to a continued deceleration of gifting in the coming years, given
that Vietnam’s household size is shrinking over time with more younger families
having one or two generations. Nevertheless, Tet-gifting culture will probably stay
here for many more years, providing a great opportunity to leverage brand growth.
58
Quality
Assurance
Quality assurance has been an increasingly prominent concern amongst
Vietnamese consumers, especially in food industry. There are several drivers of this
trend. In the context of growing middle class in Vietnam, the willingness to pay
for higher quality products is accelerating. In the last decades, Vietnamese
government has been issuing more regulations on food safety that also increases
consumer awareness about product quality. Moreover, with the development of
social media and Internet, negative news and the followed media coverage can
spread like wildfire. This is only one of the many reasons why manufacturers need
to ensure that their production lines utilize the latest technologies and methods to
proactively avoid any incidents.
In the past, quality was assured mostly by brand names. Consumers were relying
on their own experiences or on what were recommended by people around them.
They bought the products from well-known brands without the intention or the
accessibility to check more information about the products from various sources.
Communication from manufacturers played the vital role in building
consumer trust.
Quality currently is defined in a more complex way other than just brand names.
Consumers have the higher expectations when it comes to the production methods
and quality of the food, but also for packaging and other features of the product.
They are not afraid to walk away if these expectations are not met. Reliable origin
and production process are increasingly important to consumers. Prior to making
decisions, consumers are spending more time to search for in-depth information
about products from different sources, either from people they know or social
groups.
In the next few years, consumers might be looking out for clearer visibility of when,
where and how the products were sourced, produced and delivered to them. The
technology development allows manufacturers to give the consumers the full
transparency in producing process at all steps.
59
Source: GSO
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