2024 is expected to see fiercer competition in FMCG
2024 is expected to see fiercer competition in FMCG
As competition intensifies in the fast-moving consumer goods (FMCG) playground in 2024, the urgent need for brands to identify their unique growth drivers to stay ahead of competition has been highlighted.
Kantar Worldpanel Vietnam’s report released on March 27 reveals that Vietnam's FMCG sector stands at a crossroads. While economic growth projections for 2024 are positive, consumer confidence at the end of 2023 remained subdued.
The fast-moving consumer goods (FMCG) retail landscape in Vietnam is also shifting to more convenient and modern formats, but not all modern trade channels can win.
Mini stores are gaining popularity due to expanding product availability as well as proximity and convenience advantages. This rise comes at the expense of hypermarkets and supermarkets, whose value contribution is facing a gradual decline.
For brands attempting to be more present in smaller formats, every inch of shelf space becomes precious real estate. Brands need to maximise space to meet more shopper needs and missions with strategic product selection with less space.
Meanwhile, the online space is exponentially growing in importance, capturing a bigger buyer base and fostering increased purchase frequency.
Kantar's data also reveals that over half of FMCG brands struggled to keep pace with the competition in 2023, particularly within growing categories where approximately one-third of brands began to lag.
However, not all categories are created equal to build a winning portfolio. For FMCG manufacturers with a vast portfolio, identifying the key categories and to prioritise investments in is crucial in achieving category growth and profitability, the report said.
Meanwhile, there is the growing importance of value consciousness, where consumers prioritise essential goods but are willing to invest on categories and products that add value beyond functionality.
In a value-conscious environment, simply offering promotions to drive short-term sales growth might not always be beneficial to brand growth. Looking at the efficacy of different types of promotions will allow brands to assess the true impact of their pricing and promotional efforts and refine their strategies accordingly.
