FMCG sales to rebound on Lunar New Year
FMCG sales to rebound on Lunar New Year
The sales value of Vietnam's fast-moving consumer goods (FMCG) industry will rebound strongly in light of the biggest festive holiday, the Lunar New Year.
FMCG sales to rebound on Lunar New Year (unsplash)
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This was revealed in the latest study by NielsenIQ. Specficially, the Lunar New Year (Tet in Vietnamese) is the biggest festive event in Vietnam. It is the time of year when migrant workers return to their home towns to spend time with family and friends. It is a red-letter holiday in Vietnam’s FMCG calendar, as sales are higher than during non-festive periods.Popular Tet consumption categories are beverages, beer, biscuits and pies, snacks, and coffee, with volume growth ranging from 10 to 50 per cent, depending on category.
Given that the country’s economy is dependent on exports and tourism, the adverse impact of COVID-19 on these key sectors have resulted in job losses and constrained consumption in the country.
“Even though there are no restrictions in place, we believe that the pandemic’s impact on employment will lead to consumers optimising spending and looking for better bargains,” says Richard Thomas, director of Intelligent Analytics at NielsenIQ Vietnam. “A study we did in Vietnam showed that the most sought-after promotions are free gifts and direct discounts. Retailers and manufacturers should keep this in mind when planning their promotional strategies.”
Retailers and manufacturers invest heavily in promotions and price reductions during banner festive events such as the Lunar New Year. These promotions, which are among the most effective ways to drive sales, can sometimes result in “promotional wastage” – where brands lose money because of ineffective promotions.
Therefore, in order to capitalise on festive sales, brands and retailers must rethink their promotional strategies and ensure they are promoting the right products, using the right mechanics, and at the right price to better meet the needs of Lunar New Year shoppers.
Though a portion of consumers may be shopping on constrained budgets due to the economic impact of the pandemic, insulated consumers will be taking the opportunity to treat themselves during the festive season by splurging out on premium products. Some indulgent categories such as beer and chocolates are highly promotion-sensitive, presenting an opportunity for manufacturers and retailers to capture incremental sales during the festive period.
In addition, manufacturers and retailers should also offer special promotions on premium gifting categories such as abalone, chicken essence, birds nest, and liquor as insulated spenders may have additional budgets to spend due to scaled down parties, open houses, and celebrations.
