Nielsen conducted an analysis of the Top 100 FMCG players across Asia-Pacific in 2016, representing approximately 85 per cent of FMCG. In this analysis, it looked into four super categories: Food, Beverages, Household Care, and Personal Care. Alcohol and Tobacco were excluded.
In 2016, while multinational companies (MNCs) saw stagnancy, with an increase of just 2 per cent in value growth (versus 5 per cent in 2014), local players recorded growth of 7 per cent (compared to 5 per cent two years ago) and contributed 42 per cent to total FMCG sales.
When looking deeper into each super category, different pictures emerge between these groups. The Food and Beverages categories have long been hailed as a stronghold of local players, accounting for 69 per cent and 45 per cent shares, respectively. Despite the domination of MNCs in terms of market share, local players continued to see strong increases the Household Care and Personal Care categories, of 13 per cent and 9 per cent, respectively.
Nielsen also released the “Nielsen Global Brand-Origin Report”, which highlights consumers’ preferences for and sentiment towards products manufactured by local manufacturers versus large global/multinational brands across 34 categories.
The preference among Vietnamese for local brands was strongest in the Dairy (milk/butter/cheese/yogurt) and Biscuits/Chips/Snacks/Cookies categories, where up to 48 per cent and 44 per cent of consumers, respectively, said they prefer to buy brands from local manufacturers.
Other categories where consumers showed a high preference for local brands include Tea/Coffee (41 per cent), Frozen Meat/Seafood (37 per cent), Instant Noodles (36 per cent), and Paper Products (Tissues and Toilet Paper, with 29 per cent). Conversely, categories where consumers were more inclined to opt for a globally-manufactured product over a local brand included Baby Wipes/Diapers (13 per cent), and Baby Food/Formula (13 per cent).
“In today’s world of hyper-connectivity and globalization, consumers have a wider array of product choices than ever before,” said Mr. Nguyen Anh Dzung, Director, Retail Measurement Services, at Nielsen Vietnam. “However, as world markets hunker down under a guise of protectionism, the ‘Go Local’ wave has never been stronger. Global brands’ prestige appears to be losing some gloss as local brands compete on quality, often with more competitive pricing and more targeted marketing.”
“In general, local players are offering increasingly better quality products at competitive pricing,” he went on. “They often have a strong on-the-ground presence and a sustained distribution network that ensures their products are readily available to all consumers, not just those in the top tier cities, but in secondary cities and regions where consumption is accelerating.”
In an increasingly global world, the battle of the brands comes down to understanding consumers’ evolving needs, behavior, lifestyles, and tastes. Any brand, be it local or global, that is able to tap into these consumer preferences will be best-placed to win the hearts and minds of consumers in the future.