Dominance of FDI Corporations in the Booming Vietnam Beverage Market: Ken Research
Ken Research announced its latest
publication on, “Vietnam Beverage Report 2015”, offering
insights on Beverage Market in Vietnam. The publication provides a detailed
analysis of the overall beverage market size in Vietnam including market share,
advantages and disadvantages, internal competition etc., supply-demand
situation, distribution channels and competitive scenario in the Vietnam
Beverage Market. The report further reveal market drivers, opportunities,
restraints, and challenges to be faced in the Vietnam market.
Overview of the Beverages Market in Vietnam
Looking at the History, we can see
that Vietnam was once an agriculture oriented economy. However, since the
initiation of “DoiMoi” socialist- economic reforms in 1986, the economy has now
become a market oriented one. Also, as a result of “DoiMoi” reforms and joining
the World Trade organization, Vietnam has become one of the fastest growing
economy in the ASEAN region.
The food and beverages sector is one
of the most crucial sector in the Vietnamese economy as rising living standards
of the Vietnamese population forms the basis of this sector. A large number of factors are expected to
drive the growth of this sector which includes consistently rising disposable
income, urbanized consumer lifestyles, consumer’s preference for convenience,
safety and health. Besides these, there also has been a significant rise in the
rural Vietnam’s demand for the FMCG products, driven by higher levels of
disposable income which in turn will drive market growth.
The Vietnamese beverage market has
bright prospects with the market value expected to increase in the future.
Consumer’s increasing demand for beverage products will also lead to an increase
in the profits of this sector. Talking about the composition of the beverages
market in Vietnam, soft drinks holds the majority of the share while hot drinks
segment is the smallest. But with the rising proportion of wealthier
population, the demand for hot beverages such as tea and coffee is also
expected to rise significantly.
The Vietnamese alcohol market shows no
signs of development whereas the beer market is now showing signs of
saturation. The Domestic wine market has huge potential for development while
the domestic spirits market is highly underdeveloped and continues to be
dominated by imports from Spain and America.
Key Driving Factors in Vietnam’s Beverages
Market
Some of the factors expected to drive
growth of the Vietnamese beverages market are:
·
Rising Disposable incomes
·
Changing and modernizing lifestyles
·
Consumer’s preferences for health, convenience
and safety
·
Expanding retail and tourism industry
Apart from the above demand driving
factors, low labor cost, abundance of natural resources to be used as raw
materials by processing industry, export processing zone projects of foreign
and domestic large corporations are helpingto expand domestic production
capacity and hence boost the supply.
Future of the Beverages Market in Vietnam
Despite the fact that the overall
future of the beverages market in Vietnam is bright, it is worth a mention that
the future of the local players in this sector is gloomy. Amongst the 5 largest
soft drinks brands in Vietnam, Tan Hiep Phat is the only domestic firm
appearing in the list with the market share of 17.4% which asserts the fact
that the future position of the local players in the Vietnamese beverages
market is very ambiguous.
The
reasons for the dominance of the FDI corporations in this sector are the day by
day increasing foreign investment, FDI Corporation’s
better position in terms of technology and capital as well as the distribution
channels. All these factors are contributing to further weaken the position of
the domestic players and intensify the competition in the Vietnamese beverages
market. In the near future, the pressure for Tan Hiep Phat and other domestic
firms will be very significant, as they will have to strategize their actions
to increase their market share and compete with foreign soft drink
corporations.
Companies
Covered:
Saigon Beer-Alcohol-Beverage JSC.
Hanoi Beer Alcohol and Beverage JSC.
Vietnam Brewery Limited Company
Thanh Hoa Beer JSC.
Aroma Beverage JSC.
AvinaA JSC.
Vietnam Halico JSC.
LamDong Foodstuffs JSC.
Thang Long Wine JSC.
URC Vietnam Company Limited
Tan Hiep Phat Beverage Group
Chuong Duong Beverages JSC.
Coca Cola Beverages Vietnam Ltd.
Dona Newtower Natural Drink And Food JSC.
International Foods JSC.
To know more on coverage, click on the link
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Related
Reports:
Contact:
Ken Research
Ankur Gupta, Head Marketing &
Communications
+91-124-4230204
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