(Bloomberg) The growth rate of consumer
spending (CAGR) of Vietnam in the 2011-2020 period is forecast that is one of
the highest top in the ASEAN region, reaching 8%, higher than both Indonesia
and Malaysia 5% , and the Philippines, Thailand and Singapore and is 4% (source:
Global Insights, Bain Analysis).Many research reports of International market research
companies are general statement, Vietnam is emerging as a consumer goods
market with full of promise.
According to estimates of BMI in report the food and beverage industry
of Vietnam, in 1/2013 quarter, the double
growth rate of food consumption dual of
Vietnam period 2012 - 2017 is 9.43%. In particular, the double growth rate of canned food revenue was 5.17%
and 4.65% of confectionery. For drinks, the double growth rate of revenue of
coffee was 8.47% and carbonated beverages was 6.96%.
With the population structure in the world's youngest top
with 56% of the population under 30 years old (according to Nielsen), total
consumer spending in Vietnam is expected to double and reach approximately 173
billion dollars in 2020 (source: Euromonitor, Global Insight, Bain Analysis). Nielsen
also announced the growth of the market for fast moving consumer products
(FMCG) in Vietnam as of 3/2012 quarter was 23%, surpassing the major markets
such as India, China (Grocery Report 2012- Nielsen). Another important factor
to promote more investment by businesses in FMCG sector is forecasting GDP
growth of 7.2% Vietnam will reach in 2017, according to estimates by the
Economist Intelligence (Vietnam Country Report, January 4/2013-EIU, page 7).
As reports in the consumer goods industry of Bain & Company, Vietnam's economy is developing very high
speed, so retail spending will increase in all types of retail, especially
modern grocery, personal commodities and entertaining. In Vietnam, the
"champion of indigenous retail" which has dominated in the model as a
modern grocery, jewelry and electronics. Euromonitor's research estimates,
full-scale Vietnam retail market will reach approximately $ 34 billion in 2016.
The total retail market size of the real Vietnam in 2011 was 29 billion
dollars.
According to Euromonitor, the leading retail
sector in Vietnam in 2016 will consist of garments; electronic; Modern grocery;
health and beauty; personal goods and recreation; home and garden; traditional
grocery.The strong growth will take place in the sub-sectors such as modern
grocery; Personal goods and entertainment. Modern retail trends through modern
channels will also place more strongly and gradually replace the traditional
form of groceries, which existed in long time in Vietnam linked to living
habits and consumption of the people .
In 2011, traditional grocery distribution
sector in Vietnam reached US $ 11 billion full-scale, the forecast market size
in 2016 will be reduced to US $ 10.7 billion (down 1%).Conversely, in 2011, if the modern model had only in total market scale $ 1.6 billion, is
expected by 2016 will rise to $ 2.8 billion (up 12%). Similarly, in the field
of personal goods and recreation scale will also increase from 2.4 billion in
2011 to $ 4 billion in 2016, ie an increase of 11%.
Bain analysis may partly explain why large
FMCG firms such as Masan Vietnam, Vinamilk, Kinh Do ... could win front of
multinational giants, which are very strong in terms of capital and
distribution system.The key element to the success of domestic enterprises
listed Bain include: (1) local scale, (2) ability to lead in terms of price,
(3) localized factors. In summary, according to Bain, the loyalty of our
customers is very important to local businesses win in the retail sector. It is
vital that the consumer business in the country is pretty well positioned. In
some cases, even corporations multinational retailers like Walmart and glorious
defeat, because the key did not grasp the "localization". Walmart had
failed in Korea because the group does not know how to adjust business strategy
to suit local markets. In other words, they do not do so, "Korean" of
your brand here.
The recent analysis about Vietnam in consumer
goods sector showed potential revenue growth of this sector is even greater.
Total revenue of the areas related to consumer goods in Vietnam is expected to
increase to 140 billion dollars in 2016. In particular, the growth rate of real
expenditure of consumers (CAGR) 2011-2016 was 3% in the retail, consumer goods
(non-food and beverages) 6%, food and beverage industry other 3% (source:
VINaconnect Report, Euromonitor and Bain Analysis). According to Euromonitor
reports and Bain Analysis, expenditure in the field of food and non-alcoholic
beverages in Vietnam could reach 276 billion dollars by 2016. With income per a
person is increasing, reaching about $ 1,521 in 2012, Vietnam's market promises
to be the new star of consumer goods in Asia.
But the remaining issue is whether Vietnam can
now take advantage of the great opportunity or not?
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