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Consumption habits in Vietnam changed due to Covid-19

Consumption habits in Vietnam changed due to Covid-19

Monday 06, 12 2021
According to a survey by Kanta WorldPanel, 77% of Vietnamese households and 74% of households in 9 other countries in Asia will shop in a less impulsive way, focusing on the immediate value of the product.

Pessimistic about economic growth

Compared to the previous outbreaks, the current Covid-19 wave has had more severe effects on the Vietnamese economy, leading to a decline in consumer confidence. Although it has seen improvement since September, Vietnamese consumer confidence in the economic situation remains low compared to normal.

In the three first quarters of 2021, only 65% of Vietnamese households in four major cities (HCMC, Hanoi, Da Nang, Can Tho) agreed that their economic situation would be better or unchanged in the next 12 months.

Under the impact of the Covid-19 pandemic, people are increasingly concerned about family income, the ability to maintain jobs and especially food costs. A survey by Kanta WorldPanel shows that 54% of households are facing financial problems, the highest level in the past two years.

Vietnamese households

Regarding income, more than 50% of households with an income of less than 17 million VND/month (equivalent to 736 USD/month) are experiencing more financial difficulties, indicating the possibility of tightening spending and shifting in product consumption in the near future. Financial difficulties can lead to an increase in the demand for savings, affecting consumption behavior in the upcoming Tet shopping season.

Changes in household spending stem from social distancing

According to a survey by Kanta WorldPanel, 77% of Vietnamese households and 74% of households in 9 other countries in Asia will shop in a way that is less impulsive and more aware of the products they will buy.

Moreover, since the middle and lower income classes in Vietnam have been significantly affected by Covid-19, they will be more price sensitive in the near future. 80% and 70% of Vietnamese households, respectively, are paying more and more attention to price factors and product promotions. This concern has grown on a quarterly basis for 2020-2021 driven by the impact of Covid-19 on household income.

The demand for FMCG (fast-moving consumer goods) continues to increase in the new normality to serve consumption activities at home when people still want to limit visiting public places.

Covid-19

Among the changes brought about by Covid-19, people still choose to prioritize health and stay at home. In particular, 43% of consumers agree to focus on online shopping, followed by spending time with family (30%), eating healthier (30%), increasing hygiene (27%) and exercise/workout at home (26%).

Viet Dragon Securities Company (VDSC) noted that more and more F&B companies are trying to redirect their products to serve the needs of home dining. As family life becomes more and more important, ready-to-eat products, especially those that are similar in taste to food in restaurants and help customers shorten the processing time, are expected to be consumed more.

Many F&B product lines serving this consumer trend such as peach tea, cappuccino, and  snack have recorded good penetration in recent quarters.

Masan Consumer's sales of at-home meal replacement products grew at a double-digit rate in the first nine months of 2021. C2 Peach Black Tea and Nescafe Barista had penetration rates of 7.2% and 3.7% respectively in 2021, while Nutimilk black sugar milk tea is accelerating the trend of home beverage consumption.

At the same time, food delivery services are growing with rapidly increasing consumer adoption rates and huge expansion potential as online shopping becomes the fastest growing trend in comparison with the pre-pandemic period.

FMCG online shopping penetration reached 48% in the four key cities and 19% in the rural market, up 10% and 3% respectively in absolute value from last year.

According to Kanta WorldPanel, 76% of shoppers in Vietnam order meals at home at least once a month and 22% at least once a week. This demonstrates that the food delivery industry is being promoted faster thanks to the Covid-19 pandemic and is gradually becoming a consumption habit in Vietnam.

Kanta WorldPane

Kanta WorldPanel indicates that 61% of consumers use of food delivery services while 56% agree to limit eating out in the near future. Furthermore, a greater preference for eating at home will be met by the growth of independent food delivery partners in Vietnam, with 87% of food buyers in Vietnam using food ordering services from 3rd parties, which is almost the same as that of China and Indonesia.

Source: theleader

 

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