Vietnam maintains its reputation as a major production hub in Southeast Asia by ensuring favorable labor costs and trade agreements. The goal to position itself as a leading smart manufacturing center has become even more attractive to investors.

With the onset of its digital transformation, supported by the government’s National Transformation Agenda Program, a bright future is paved for the eight sectors including manufacturing, under its priority. This program targets businesses, cooperatives, and business households to adopt advanced technologies and the necessary skill sets to match to stay competitive, according to Vietnam Briefing.

Among the recent achievements is a fast-developing digital economy: in 2023, Vietnam dominated the region’s digital boom, with a 19% growth that amounted to USD30 billion, according to KPMG. This is a significant milestone among many that Vietnam aims to accomplish through digitalization in the next five years.

The consumer packaged goods (CPG) industry is a key contributor to the local economy. In 2023, the CPG goods market was valued at USD52 billion, resulting from high consumer spending, and the growth of e-commerce and retail, according to Ken Research. The food and beverage market in particular is estimated to reach a value of from USD23.65 billion in 2023 to USD34.6 billion by 2030, noted For Insights Consultancy.

To understand how developments in digitalization are now playing out in the country’s CPG industry, Ringier surveyed senior and mid-level executives from local companies that cater to both domestic and international markets. The following are some of the results from the market study.

Manufacturers acknowledge that they need to adopt to the almost radical shift in buyer behavior. It is fairly recent that consumers in Vietnam began exhibiting brand consciousness and interest in foreign brands. This trend is prompting 29% of surveyed executives to prioritize brand awareness and loyalty.

The trend is closely linked to the phenomenal growth of Vietnam’s e-commerce and social commerce, sustained by a population of tech-savvy consumers who seek novelty. Capitalizing on this growth, 24% of executives see e-commerce as highly significant to their business models.

In product development, 22% of executives are directing their efforts toward product functionality, with emphasis on high quality and value for money.

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