Global data analysis and measurement firm Nielsen said that, compared to the global average, Vietnamese consumers have a stronger priority for local products, with 17% of people surveyed said that they only buy domestic goods, and 59% said they mostly buy domestic goods (compared to the global average of 11% and 54%, respectively).
Consumers prefer Vietnamese goods because they know the origin and would like to support Vietnamese businesses. This trend provides an opportunity for local manufacturers to consolidate information about the origins of their products. However, local suppliers also need to provide good-value products that match the general needs of consumers and ensure product presence on supermarket shelves.
Health has become a top concern in Vietnam for four consecutive quarters. In the first quarter of 2020, nearly half of Vietnamese consumers (49%, an increase of 4% compared to the fourth quarter of 2019) ranked health as their number one concern.
Therefore, consumers are looking for products that are manufactured with the highest safety and quality standards, and contain additional nutrients such as Vitamin C, Vitamin D, Omega 3 or probiotics.
Even before the pandemic, nearly two-thirds of Vietnamese consumers (69%) were willing to pay higher for high-quality products, far exceeding the global average of 49%. This trend is expected to grow even stronger as consumers are increasingly seeking greater assurance after the pandemic.
Ms. Louise Hawley, General Director of Nielsen Vietnam, said that the Covid-19 epidemic has left many changes in consumer habits and behaviors as well as created new trends, from actively buying healthy products to storing essential food at home.
When consumers seek assurance of product quality, a household brand with clear origin and good prestige is the fastest way to meet this demand. "We know that locally sourced products are very important in Vietnam and have an advantage over less familiar products." she said.
During the period of March and April, Vietnam’s FMCG sector witnessed a 12% decline, of which Off Traditional Trade saw a 9% drop while On Channel suffered a fall of 36%. This is also very easy to understand, and explained by the change in consumer habits when they switch to eat at home instead of eating out as before. The opposite was true for Modern Trade as it has enjoyed continuous growth since the beginning of the year, up 23% during this period.
According to Nguyen Tien Dzung, Senior Director of Retail Measurement Division of Nielsen Vietnam, there is no denying that there will be huge changes going on in certain areas as a result of the Covid-19 crisis. However, in the FMCG sector, although consumers may delay their trips or stop going to the movies, they still need products such as toilet paper or carbonated drinks.
The FMCG represents common consumer behaviors. While there is a difference in the way consumers shop, the size of the products, where they buy and where they store, the underlying needs and the way consumers use the products generally has not changed much, Mr. Dzung assessed.
In the past, serious crises such as SARS in China, Fukushima disaster in Japan, and the recent MERS epidemic in South Korea all created similar patterns in retail sales. Retail sales are usually low during times of crisis, after which the market tends to return to normal and may even grow better.
In Vietnam, the consumer confidence index in the first quarter of 2020 remained high compared to the world, and increased 1 point over the last quarter of 2019. This helps increase expectations on the rapid recovery of purchasing power.
Responding to a Nielsen survey, 64% of consumers said they would continue to use food delivery services more frequently and 63% would continue to shop online more often after the pandemic.
According to Le Hoang Long, manager of Nielsen Vietnam's retail chain consultancy, online shopping will certainly experience an upward trend after Covid-19 is over. However, online channels will just exist in parallel with, instead of replacing, traditional channels. Mr. Long predicts there will be more cooperation between online and direct retailers to create a multi-channel ecosystem.
Vietnamese consumers are re-prioritizing eating at home, which even took place before the social distancing period in April. With this shift, fast delivery and high-quality products will be key factors in promoting e-commerce and winning consumers' hearts.
>> Food & beverage industry: Vietnamese consumer behaviors
Source: theleader
