The rural market grew at 5.7 per cent while the urban market (mainly the four cities of Ha Noi, HCM City, Da Nang and Can Tho) grew at 2.5 per cent.

In the full year the segment is expected to grow at around 5 per cent, according to Kantar Worldpanel.

Personal care products led the growth in both urban and rural areas, followed by beverages.

Though all sectors recorded a positive performance in rural areas, sales of dairy and packaged foods were down in urban areas.

However, new product categories and those offering convenience such as cream dessert, ketchup, cheese, and chilli sauce saw solid growth in urban areas.

Cakes stood out with double-digit growth in both urban and rural markets.

Consumers could treat cakes as a quick meal or a break-time snack with nutritional ingredients, promising opportunities to grow further, the report said.

Retail landscape

Modern channels continued to expand rapidly with more local and international players entering the race. The mushrooming of mini-stores in the four cities reflected consumers’ demand for convenience and fast service.

Noticeably, online channels also enjoyed impressive sales, adding nearly 98,000 urban households to its shopper base.

The report said it could be a sign of another interesting year for modern retail.

The FMCG market has become much more innovative over time, especially the personal care and packaged foods sectors, it said.