FMCG sales during the 2023 Lunar New Year are expected to grow by 7-9% from last year. (Photo: VNA)In its ‘Tet 2023: Acautiously optimistic FMCG outlook’ report, the company says FMCG sales duringthe 2023 Lunar New Year are expected to grow by 7-9% from last year.
With inflationary pressure continuing, consumers are feeling the squeeze ontheir wallets and adapting to the situation in various ways.
The occurrence of two major holidays in a single month (New Year and Lunar NewYear) is expected to provide a boost to spending.
Tet is the busiest season of the year in Vietnam, usuallygenerating massive demand for shopping, gifting and travel.
In contrast to the 2022 Tet, whendemand for celebratory categories fell because of travel and gatheringrestrictions, this year's massive momentum in beverage consumption willcontinue to benefit celebratory FMCG categories like carbonated soft drinks andbeer.
But rising consumer concerns about income and job security in recent months areexpected to throw a spanner in the works.
In the last several months, as a result of the global economic downturn hittingconsumption in export markets, factories in Vietnam, especially those makinggarment and textile and footwear, have seen foreign orders plummet.
Many have had to either allow workers to begin the Tet holidaysearly or lay off large numbers of them.
Since the middle of this year, 41,500 workers have been sacked, the Vietnam GeneralConfederation of Labour has reported.
Besides, another 430,000 are at risk of having their working hours reduced orotherwise having their employment interrupted.
Many laid-off workers have returned to their rural communities sooner to spendmore time with their families, and this implies two things: working-classconsumers will be looking for ways to stretch their dong after Tet and there will be a shift in FMCGpurchases from urban to rural areas.
The consumer price index edged up in November by 0.39% from the previous monthand 4.37% year-on-year, according to the General Statistics Office.
With consumer prices increasing, conversations about the budget will be moreprominent and consumers will pay more attention to price tags before buying.
It will also cause people to start planning for Tet shoppingearlier.
Some important questions brands need to answer include how sensitive theirtargeted shoppers are to price changes and how they will react to price changesdepending on their financial confidence.
To respond to the specific settings of 2023 such as the migrant shift fromurban to rural and early Tet shopping,it is critical that brands set realistic targets and adjust their distributionplans to cater to this shift.
They need to devise the right pricing and promotion strategies while deliveringa context-appropriate message for the upcoming Tet./.
VNA
