17:03 | 06/09/2017 Trade
(VEN) - Nielsen’s recent “Rural Mythbuster” study indicates that the county’s rural market potential is untapped as of yet.
According to the Nielsen study that seeks to defuse myths about Vietnam’s rural market, 90 percent of rural consumers own a mobile phone and 50 percent of them own a smartphone. In addition, there are nearly 24 million people in rural areas using the internet, which is on a par with urban dwellers. Social media emerges as one of the key platforms for obtaining the information, entertainment and keeping in touch with relatives, friends and children, with 22.5 million Facebook users living in rural areas compared to 23.5 million in urban areas. As a result of being exposed more to media channels, there are a number of common themes emerging regarding attitudes and behaviors.
Rural consumers are very interested in high-quality products. In the first quarter of 2017, the rural market grew 12.4 percent, a near doubling of the urban growth figure. When delving into each price segment to see where the growth actually occurred, mainstream and premium were the two key contributors to the growth of fast-moving consumer goods (FMCG) in rural areas, accounting for nearly 40 percent and 38.5 percent, respectively.
Rural consumers show a thirst for new products - 77 percent want to try new products and 95 percent appreciate having a wide range of products from which to choose, reflecting better performance of new products launched in the rural market than in key cities, according to the study.
The study also shows that traditional trade comprising more than 1.1 million individual outlets across 58 provinces (excluding Hanoi, Ho Chi Minh City, Da Nang, Can Tho and Hai Phong) will continue to play a major role in the near future. Therefore, if businesses focus on promoting goods in this system, retail sales will increase significantly. While foreign retail giants mostly open distribution centers in the central and urban areas, many Vietnamese businesses such as Vingroup, Saigon Co.op and Lanchi are marketing their goods in rural areas.
For example, Saigon Co.op has launched Co.op Smile, a new trading model comprising small, modern grocery stores. Depending on their location, Co.op Smile stores range in size from 20sq.m to 200sq.m and stock 1,500 to 2,000 items like processed food, cosmetics, consumer goods and garments. The number of stores is expected to reach 200-300 by the end of this year and more than 90 percent of Vietnamese goods are available in this system.
According to the Ministry of Industry and Trade, the rural market accounts for 75 percent of Vietnam’s retail market. Rural consumers increasingly prefer Vietnamese goods due to their good quality and reasonable prices.