Solution for digital transformation and sustainable development in the retail market

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Businesses need to grasp future consumer trends and customer consumption psychology to timely adapt and transform. Photo: N.Linh

Proactively demonstrate through actions

Speaking at the forum "Vietnam Consumer Trends 2023: Connecting and orienting the consumer goods industry" on June 28, Dang Thuy Ha, Director of Consumer Insight Department at NielsenIQ Vietnam, stated that consumers were increasingly considering sustainability factors when shopping, such as sustainable and environmentally friendly products. A 2023 survey by NielsenIQ showed that 49% of consumers brought their own bags and used reusable bags. 47% only bought necessary items and avoid waste. The proportion of consumers who were conscious of recycling waste and saving electricity was at 45%.

Therefore, managers and businesses need to consider and strengthen the development and transformation roadmap, ensure transparency of information, and eliminate unfounded "green" claims.

Additionally, businesses need to proactively demonstrate their sustainable development actions and results. This means not just waiting for environmental regulatory agencies to monitor compliance with laws. Businesses need to take responsibility for their green claims and proactively provide evidence of their activities.

According to Ha, businesses that rely on imported products will face more risks because these products have long supply chains and are heavily influenced by inflation. Simultaneously, imported products are difficult to verify in terms of sustainability, which puts businesses at risk of losing credibility and partner relationships, such as retail cooperation and international trade.

Trinh Nguyen Ngoc Linh, Senior manager at Intage Vietnam Project, shared survey results on green consumption trends from the perspective of consumers in Hanoi and HCM City. She mentioned that consumers were concerned and believed that sustainable products would save long-term costs, even though they may have higher initial costs. Health and safety of themselves and their families are the most important factors when choosing products. Thus, consumers tend to choose organic and natural products to avoid exposure to chemicals and toxins.

Trend of organic consumption

In addition to sustainability, in recent years, the trend of safe, naturally sourced, and environmentally friendly food has also become popular and a modern consumer trend. Nguyen Minh Tien, Director of the Agricultural Trade Promotion Center, affirmed that this was an inevitable trend not only in Vietnam but also worldwide.

For example, the retail sales of organic products (organic food and beverages) have seen significant growth. In 2000, the organic product market reached only US$18 billion. By 2018, revenue surpassed US$100 billion. In 2021, the market experienced strong growth, reaching US$188 billion, and it reached US$208 billion in 2022.

Tien believed that the convenient and noticeable aspect is the diverse and modern distribution channels. Modern retail systems in Vietnam currently has accounted for only about 25% of total retail, which is lower than other countries in the region (33% in the Philippines, 34% in Thailand, 60% in Malaysia, and 90% in Singapore). However, according to the Ministry of Industry and Trade, modern retail channels are experiencing a strong growth rate of 11.8% per year, compared to the approximately 1% growth rate of traditional markets. Goods in modern retail systems are mostly controlled in terms of quality, design, and price. The distribution and logistics systems are more professional than traditional markets, ensuring the quality of goods when reaching consumers.

In addition to traditional distribution channels, in recent times and in the future, consumers tend to use various e-commerce platforms for trading and purchasing agricultural products.

According to the Director of the Agricultural Trade Promotion Center, to further develop this trend, several solutions are needed. In terms of policies, food safety management agencies need to effectively control the quality of clean agricultural products, investigate, verify, and handle violations, and implement measures to prevent repeat offenses related to counterfeit products, low-quality products, and unclear origins. These actions will build consumer trust. It is also necessary to implement measures and policies to enhance the effectiveness of consumer protection in the field of managing the quality of agricultural, forestry, aquatic products, and food safety.

Furthermore, raising awareness among producers and consumers, as well as enhancing the capacity of agricultural production units, conducting market research and forecasting to adjust production accordingly, and meet customer demands are crucial.

Especially, building a specialized logistics system for agricultural products to minimize costs and ensure the quality of agricultural products throughout the supply chain is essential.