Amid the Covid-19 pandemic, consumers increase stocks of personal and family hygiene, immune-boosting and nutrition products, and convenient food and cooking aids in HCM City. (Source Kantar) HCM City (VNS/VNA) - The COVID-19 outbreak has hit fast-moving consumer goods (FMCG)businesses but not all categories and retailers will suffer negative impacts,according to global data and consulting company Kantar Worldpanel.
The company said it is closely monitoring the impact of COVID-19 on FMCGcategories across various shopping channels to shed light on how consumers’behaviours are changing to help brands and retailers respond to them inthis VUCA (volatile, uncertain, complex, ambiguous) time.
Growth in the FMCG market slowed down in the first two months of 2020 to 5.2percent compared to 6.3 percent a year ago.
Dairy, packaged foods and personal care sectors have managed to sustain growthrates of 1.7-14.5 per cent, while beverages suffered a decline despite thisbeing the high season (Lunar New Year or Tet).
It is possibly explained by the lower numbers of parties and celebrations aspeople avoided socialising and gathering.
By looking at consumer purchase behaviours in the four weeks after Tet comparedto the same period last year, it is easy to see how COVID-19 has initiallyaffected people’s FMCG spending and purchase behaviours.
Consumers in urban four key cities, Hanoi,HCM City, Da Nang, and Can Tho, showed a tendency to stock up three groupsof categories.
Firstly, they spent more on categories that offered personal and family hygieneto remain clean and kill germs. Hand sanitisers, bar soaps and householdcleaning products all saw double- and even triple-digit rises.
Secondly, convenient foods and cooking aids also saw sales surge during theoutbreak, probably due to fear and anxiety amid the increasing number ofconfirmed cases and the extended home stay of children.
Frozen foods, canned foods, instant noodles, and cooking oils were a fewcategories enjoying impressive growth.
The other products that consumers sought during this time were those boostingimmunity and nutrition, especially for seniors and kids who are at higher risk.
On the other hand, they cut down on celebratory categories from their basket.Thus, alcoholic and non-alcoholic drinks suffered the most in this period, withbeer and carbonated soft drinks in particular experiencing sharp declines.
There were changes not only in product preferences but also channel choices,with online shopping prevailing as people shopped remotely, accelerating thegrowth of online FMCG spend to a triple digit rate in just one month since theofficial announcement of the epidemic in Vietnam. The trend is expected tocontinue in the coming months with local authorities urging to shop online toavoid crowds and physical contact.
With the skyrocketing demand for face masks and hand sanitisers, it is nosurprise to see the robust growth of consumer spending in pharmacies includingMedicare and Guardian. More purchases of hygiene products were made asconsumers’ priority was their safety.
As the number of affected people swells, there is panic buying in some areas,especially where there have been confirmed cases. It drives demand to stock up,leading to a notable growth in sales at hypermarkets, supermarkets andminimarkets, which are perceived to offer hygiene, variety and lots of supportprogrammes such as home delivery, masks and hand sanitisers at stable prices,support for farmers, and so on.
Within the big retail format, Big C achieved the strongest performance, drivenby increasing spending per trip.
MM Mega market (cash-and-carry retail model) also picked up despite itsdownturn in recent years.
Meanwhile, shops most commonly used for daily needs are losing customers sincethey prefer less physical contact and fewer shopping trips. So street shops, andconvenience stores are seeing the impact of the COVID-19./.
VNA
