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BUSINESS REPORT

on food (both fresh food and packaged food, domestic consumers in mind. The high sales
including instant noodles) as a basic need. price, meanwhile, stems from additional costs CONSUMPTION OF INSTANT NOODLES
PER YEAR, BY COUNTRY
They also spent more time at home, leading such as import duties and shipping charges.
to more in-home cooking. “We saw significant Local products are suitable to local palates,
growth in the need for both fresh food, come at a reasonable price, and are easy to 40.25
cooking additives, and convenient food, with buy. “In addition to using products with Viet-
instant noodles and packaged bread being namese flavors familiar from their past, con-
popular alternatives,” Mr. Christou said. sumers also have the option of trying flavors
Instant noodles are also convenient, pro- from other countries,” he said. “I think instant
viding an easy and quick meal with diverse noodles are a diverse food type that can meet
product choices and innovation to meet the demand, so I want Acecook Vietnam’s products
needs of customers and target different con- to develop in parallel with imported products.”
sumer groups, a range of options (“pho” or In general, according to Kantar Vietnam’s
other noodles), flavors (tomyum or beef), observations, the diversity in product choice 12.54
price points (economy, mainstream, or pre- is one of the main drivers of the development
mium), and product origin (Vietnam, Thailand, of the instant noodles market, so more players 6 5.78 5.2
South Korea, Japan, or Indonesia). “Consumers mean more choice, which then excites con-
can buy instant noodles anywhere, whether sumers and stimulates their spend on the
at a corner store or supermarket, and even at category overall. “Each brand or player has
emerging channels like convenience stores, its core consumer target and puts effort into China Indonesia India Japan Vietnam
minimarkets, and online,” Mr. Christou noted. expanding their portfolio to reach as many
people as possible, so the growth opportunity Source: World Instant Noodles Association (WINA)
Hot competition is the same for all players,” Mr. Christou said.
The Covid-19 pandemic has contributed “Consumers seek value-for-money options,
to brand growth, revealing a market of con- and are even willing to pay more for high-
tinued potential and rising competition. There quality products from either local or foreign that the greatest challenge facing its instant
are currently more than 50 instant noodle manufacturers. Those who meet consumers’ noodles is the rapid change in consumer
% CONTRIBUTION OF EMERGING CHANNELS TO CATEGORY VALUE GROWTH
producers in Vietnam, according to WINA. changing tastes and aspirations with innova- behavior in shopping, brand perception, inter-
The local market features major names like tion, bringing them new experiences, will action with the media, and technology, espe-
Acecook, Masan and Asia Food, which hold win out in the end.” cially among teenagers. “Brands that want to
more than 70 per cent of the market share. be ‘friends’ with the customer need to be

Other foreign brands have been arriving on Limitations in place flexible to reach them in the first place and

Vietnam’s shores, however, such as Nongshim With such a competitive market comes understand their needs, so they can better
from South Korea and Indomie from Indone- challenges. As penetration is already at a high serve them.”
sia. Foreign noodles with higher prices are level, of almost 100 per cent of Vietnamese Kantar Vietnam also pointed out that in
attracting the interest of young consumers households, there are few opportunities to terms of volume consumption, the devel-
earning medium or high incomes. pick up new shoppers, according to Kantar opment of instant noodles can indeed be
The Masan Consumer representative said Vietnam. Competition will therefore become driven by an increase in volume consumption,
that the more developed Vietnam’s instant even fiercer as brands and players fight it but this is no easy task. Each household cur-
noodle industry becomes, the more it will out. The market also, of course, is competing rently consumes four or five packs of instant
attract big names. “Competition brings new with emerging options such as packaged noodles a week on average. There remains S
benefits and better products to consumers,” bread, breakfast cereal, spaghetti, biscuits space for growth, but a great deal of effort is
he said. “This is not a challenge, but an oppor- and cakes, and dairy-based products. required, especially in marketing and com-

tunity for domestic brands to perfect them- The Masan Consumer representative noted munications. %
selves, meet the expectations of consumers,
and compete fairly with all foreign brands.”
Omachi is now the leading brand in Masan’s % CONTRIBUTION OF EMERGING CHANNELS TO CATEGORY VALUE GROWTH
high-end segment, with more than 20 types
of products. Its strategy is to “premiumize”
the brand, through continually creating new FY 2019
products. Each Masan instant noodles brand
is aimed at a distinct target group, designed H1 2020
for their benefit, and ready to change to suit
modern consumer habits and trends. “We
hope to continue to bring products made
using the most advanced technology in the
world, that are suitable to Vietnamese palates
and meet the rising consumer demand,” the
representative said.
Competition is indeed heating up. Mr.
Junichi said that retailers around the country,
especially supermarkets and convenience stores,
are selling more instant noodles from South Cosmetics Children’s Noodles FMCG Fabric care Soft drinks
& soups
milk powder
Korea, Indonesia, Thailand, and elsewhere,
but these are manufactured with their own Source: Kantar, Worldpanel, Omnichannel 2020 report

MARCH 2021 | VIETNAM ECONOMIC TIMES | 33