Nielsen Reveals Big Mythbusters of Unknown Land – Rural Vietnam

Tuan Minh

16:43 14/07/2017

BizLIVE - In contrast to common beliefs, Vietnamese rural consumers, who account for 68% of the country’s population, are evolving by leaps and bounds, offering huge opportunities for the fast moving consumer goods (FMCG) producers.

Nielsen Reveals Big Mythbusters of Unknown Land – Rural Vietnam

Consumers shop at a marketplace under the program "Bring Vietnamese goods to rural areas". Photo: baocongthuong.com.vn

With its huge population and increasing affluence, rural Vietnam is, in fact, lucrative market as these consumers are enjoying income growth. However, this high-potential group largely remains unknown and has been long thought to pose great challenges to businesses.
Those barriers are highly related to the myths as to whether rural consumers are less connected consumers, they are likely to keen on affordable products and pushing products to these far lungs is expensive and costly.
Nielsen Vietnam in its latest report revealed three big myths about rural consumers in Vietnam.
First, rural consumers are well connected to television and social media. Television reach in rural communities is at saturation point, with more than 90% owning a television at home and 57% among them connecting to more than 10 television channels.
Up to 90% of the rural consumers own a mobile phone while 50% of them own a smartphone, according to Nielsen Rural Mythbuster study.
While internet penetration remains relatively low, internet and digital platforms usage is on the rise among these consumers. The report showed that there are nearly 24 million people in rural areas using Internet, which is on par with their counterparts living in metropolitan places.
Social media emerges as one of the key platforms for obtaining the information, entertaining and keeping in touch with relatives, friends and children when 22.5 million Facebook users living in rural compared to 23.5 million Facebook users coming from urban areas.
Second, rural has been constantly grown as a new source of growth for many manufacturers during the past years. In fact, in the first quarter of 2017, rural grew at 12.4%, contributing 51% to total FMCG sales nationwide while urban only gained 6.5%.
More importantly, the pick-up from both urban and rural areas was mostly driven by volume increase. When taking a deep dive into each price segment to see where the growth actually comes from, mainstream and premium are the two key contributions to the growth of FMCG in rural, nearly 40% and 38.5%, respectively.
Third, correlated with rural consumers’ aspirational outlook and fascination with urban lifestyles, they show a thirst for new products, with 77% of them wanting to try new products and 95% appreciating having a wide range of products to choose.
Subsequently, these insights lead to the point whereby new launches in rural perform better than those in six key cities within a store, proven in 25 out of 27 categories. But with a highly diversified retail sector, ensuring products reachable and available are instrumental and critical elements for success.

 

TUAN MINH

Từ khóa: Nielsen