Vietnam’s economy maintained its strong momentum
over the course of the second quarter of 2025, with GDP growth supported by solid
industrial and service sector gains. The country recorded its highest first-half
growth in 15 years, at 7.52 per cent, revealing resilience despite myriad global
trade uncertainties. Consumer prices rose 3.31 per cent year-on-year in the
second quarter, according to the National Statistics Office at the Ministry of Finance.
While inflation remains within targets, rising food and foodstuff costs are increasingly
straining household budgets, posing challenges and opportunities for the fast-moving
consumer goods (FMCG) segment.

Mixed performance

According to the FMCG Monitor Q2 2025 report from
Worldpanel by Numerator, Vietnam’s FMCG market showed mixed performance across categories
in the quarter, reflecting cautious consumer spending in both urban and rural areas.
In the four key urban cities, overall FMCG spending grew 2 per cent, driven largely
by modest price increases of 2 per cent despite a 3 per cent fall in volume. Beverages
experienced the steepest contraction, with a 9 per cent dip in volume and a 6 per
cent decline in spending, even as average prices rose 4 per cent. Packaged Foods
also saw reduced volume, of 1 per cent, but maintained slight spending growth, also
of 1 per cent, due to higher prices. Dairy, Personal Care, and Home Care were relatively
more resilient, with stable or slightly positive spending trends.

In rural areas, the downturn was more pronounced
in volume terms, especially for Beverages (-10 per cent) and Packaged Foods (-6
per cent), though price hikes cushioned some of the spending declines. Overall FMCG
spending in rural areas fell 3 per cent, with volumes down 6 per cent.

The data underlines a clear shift in consumer priorities
towards essential needs and value-seeking behavior. The sharp contraction in Beverages
and Packaged Foods, traditionally discretionary or celebratory categories, suggests
households are cutting back on non-essential indulgences amid economic uncertainty.
The relatively stable performance in Dairy, Personal Care, and Home Care points
to a focus on basic nutrition and hygiene.

Ms. Tran Dieu Huong from the Domestic Market Management
and Development Agency at the Ministry of Industry and Trade said FMCG remain a
cornerstone of Vietnam’s socio-economic life. “From 2021 to 2024, total retail sales
in the FMCG sector grew by an average of 10 per cent annually, against the backdrop
of GDP growth reaching 7.09 per cent in 2024 and projected at 8 per cent in 2025,”
she noted. “The market is undergoing a strong shift towards greener, cleaner, and
healthier consumption, with greater emphasis on product origin and production processes.”

Lower confidence

Despite positive GDP figures, consumer confidence
in Vietnam has fallen to its lowest level since the major Covid-19 wave in 2021.
This decline stems from a combination of factors: the unpredictable global trade
environment, which fuels economic uncertainty, and, more recently, a surge of news
on the government’s intensified crackdown on counterfeit goods and substandard food
products. The resulting concern over product authenticity is expected to significantly
reshape shopper behavior.

The Worldpanel by Numerator report shows that consumer
confidence in Vietnam’s four key urban cities fell sharply in the second
quarter, hitting its lowest point since Covid-19 in 2021. Only 62 per cent of households
believe the economic situation will improve or at least remain stable over the next
12 months, down from 70 per cent in the first quarter and well below the recent
peak of 80 per cent in the second quarter of 2024. This decline is attributed to
a mix of negative economic and trade news, coupled with the government’s intensified
crackdown on counterfeit goods, which has weighed on both market sentiment and retail
activity. The trend reflects growing consumer caution, marking a clear shift from
the more optimistic outlook in early 2024.

This sharp drop in sentiment signals a potential
cooling period for discretionary spending in the coming quarters, particularly in
non-essential categories. While essential goods like FMCG products are likely to
remain resilient, retailers and brands may face greater pressure to deliver value-driven
propositions, targeted promotions, and innovative engagement strategies to sustain
consumer interest.

Brands can expect heightened scrutiny from shoppers,
who will be more selective in their purchases, actively seeking trusted brands and
verified sources. Value-consciousness will increasingly extend beyond price to include
quality, safety, and brand reliability. With living costs rising, consumers are
likely to prioritize essential goods over discretionary items, leading to more deliberate
spending decisions.

The FMCG sector plays a vital role in daily life,
providing high-turnover products such as food and beverages (F&B) and household
hygiene items. Amid rapid digital transformation and the rise of multi-channel retail,
the entire value chain, from production to consumption, is being reshaped. This
shift demands that businesses rethink their strategies, embrace technology, and
enhance operational efficiency to remain competitive.

At the same time, the growing emphasis on green,
safe, and transparently-sourced products is becoming a decisive factor in purchasing
behavior. Vietnamese FMCG companies that can leverage domestic raw materials, invest
in innovation, and build green, sustainable brands will gain a significant edge
in both domestic and international markets.

Transformation for adaptation

The report highlighted that online platforms and
minimarkets continue to lead as the fastest-growing retail channels, underscoring
a clear trend towards modernization and a more convenient shopping experience. This
presents significant opportunities for brands to adapt, expand their shopper base,
and increase basket sizes within these key channels.

At the same time, the modern retail distribution
network and FMCG e-commerce are also seeing robust growth. “In 2024, e-commerce
grew by over 22 per cent and is expected to account for 10 per cent of total retail
sales in 2025,” Ms. Huong noted.

However, small and medium-sized enterprises (SMEs)
still face challenges in capital, technology, and digital talent. Comprehensive
support policies are being rolled out, from investments in logistics infrastructure
and credit and tax incentives to workforce training and improved legal frameworks
for livestream commerce, with the goal of making FMCG a sustainable driver of domestic
growth.

According to Ms. Huong, major e-commerce platforms
such as Shopee, Lazada, and Tiki have become familiar shopping destinations for
urban consumers. Surveys reveal that 73 per cent of these consumers search for information
online before making a purchase. Businesses in the FMCG sector are actively adopting
multi-channel retail models and integrating cashless payment solutions to enhance
the shopping experience.

Ms. Doan Trang Ha Thanh, Chief Operating Officer
at Lazada Vietnam, emphasized that digital transformation in operations and distribution
has become a key factor for food and FMCG businesses to optimize performance. “Enterprises
are encouraged to invest in sustainable operations on digital platforms, accelerate
logistics digitalization, and boost livestream sales activities,” she stressed.
“Digitalizing distribution not only shortens processing time and reduces operating
costs but also enhances market reach, especially for products requiring careful
preservation, such as fresh food, thereby enabling scale expansion and strengthening
competitiveness in digital commerce channels.”

In an era where consumer preferences are evolving
towards convenience, sustainability, and digital engagement, Vietnam’s FMCG sector
stands at a pivotal juncture. The convergence of modern retail, e-commerce, and
advanced logistics is opening unprecedented opportunities for brands to innovate
and expand.

With strong policy support, strategic digital transformation,
and a customer-centric approach, the FMCG industry is poised not only to sustain
growth but also to become a powerful engine driving Vietnam’s domestic economy forward.