The Vietnamese confections market has experienced relatively consistent growth in recent years, averaging 8–10% per year. Although compared to the period before 2015, the growth rate of the confectionery market has decreased much more. However, from the perspective of foreign investment, the 100 million-person Vietnamese market is still attractive.
Compared with the average growth rate of the confectionery industry in the world at about 1.5% and Southeast Asia alone at 3%, the growth rate of Vietnamese confectionery is still high. Currently, the average confectionery consumption of a Vietnamese person is about 2 kg/year, which is quite low compared to the young population in Vietnam. However, it is expected that confectionery consumption will also increase soon.
Competition for market share between domestic manufacturers and foreign enterprises
Vietnam is currently one of the most attractive retail markets for foreign businesses and has great potential in Asia. This creates a very competitive environment.
Compared with domestic confectionery manufacturers, foreign enterprises always have advantages in terms of financial potential as well as technology. Therefore, domestic enterprises need to constantly innovate and improve to be competitive. Today's consumer tastes have changed a lot compared to the past, a quality product must not only be delicious but also beautiful.
To accomplish this, manufacturers must invest time and effort in researching and understanding consumer preferences. At the same time, businesses need to have a large-scale marketing plan, try to put more products into the system of famous supermarkets as well as agents, grocery stores,...
In the confectionery market, there are names with large market shares such as Bibica, Hai Ha, Kinh Do, and KIDO,... In addition, foreign brands also resonate in the Vietnamese market such as Orion, Liwayway,... Pressure competition is increasing due to the effect of free trade agreements, which makes more and more products imported into Vietnam and competes directly with domestic products due to having more competitive advantages.
It is estimated that there are hundreds of small production facilities, about 30 large domestic enterprises, and many foreign confectionery import companies participating in the Vietnamese confectionery market.
Some reputed confectionery companies such as Kinh Do, Hai Ha, Bibica, and Orion Vietnam are estimated to account for 75-80% of the market share while imported confectionery accounts for only 20%-25%. By constantly innovating product quality from design to taste, domestic enterprises are increasingly asserting their important position in the Vietnamese confectionery market.
Thus, it can be seen that the Vietnamese confectionery industry market in 2022 will change positively and be a potential market for many businesses. However, at present, this market is quite competitive, so it requires manufacturers to constantly innovate to develop.
After selling 80% of the shares in the confectionery business for about $370 million (nearly VND 8,000 billion) to Mondelez International, Kinh Do Joint Stock Company changed its name to KIDO Group Joint Stock Company (Kido Corporation) and decided to turn around. expanding into a broader market space of essential foods with products such as Tuong An cooking oil, Marvela; Family instant noodles; ice cream, yogurt Merino, Celano…
With the ambition to return to the confectionery market, KIDO launched about 4 million Kingdom mooncakes in the mid-autumn festival of 2020. Returning to the confectionery business with KIDO after 6 years, KIDO takes advantage of all its strengths in understanding the market, distribution network coverage, relationships with partners, and financial resources.
Regarding products, KIDO did not choose to launch the old traditional product lines, but launched new lines and trend-catching lines such as lava mooncakes, melted chocolate mooncakes,... This shows that KIDO quickly recognized changes in the market and decided not to go in the direction of mass production as before, but to focus on producing new products with great demand.
Although just returned to the confectionery market and received a lot of support from old customers. However, KIDO's revenue does not come much from the confectionery sector but from producing cooking oil, ice cream,... KIDO's revenue in 2022 reached VND 15000 billion, up 30% compared to 2021 and up nearly 340 % compared to 2019, much higher than other businesses. Revenue is huge, but KIDO's profit is mid-range among brands. Specifically, the profit in 2021 reached more than 500 billion VND, up 50% compared to 2020. By 2022, the profit after tax decrease by about 385 billion VND.
Mondelez Kinh Do is one of the oldest confectionery brands in Vietnam. Launched in 1993, the brand brings a lot of memories to generations of Vietnamese people. After 10 years of brilliant development, in 2015, Mondelēz International acquired Kinh Do's confectionery business and renamed the company Mondelez Kinh Do Vietnam Joint Stock Company. Kinh Do Joint Stock Company changed its name to KIDO Group Joint Stock Company in October 2015.
Although it has changed owners, Kinh Do still maintains the same product quality and is always trusted by users. Kinh Do confectionery focuses on the mid-end and high-end segments with the brands Kinh Do, Cozy, Solite, Slide, AFC, LU, and Ore. Besides the Vietnam market, Kinh Do confectionery is also very developed in the world.
From 2020-2022, net revenue has a slight fluctuation in 3 years. Revenue in 2021 decreased by 14% compared to 2020, but by 2022, revenue has increased by about 43% compared to the previous year, reaching nearly VND 5000 billion. Profit also fluctuates like revenue, but the profit in 2022 has not yet reached the profit in 2020. Specifically, in 2022, the profit is about VND 326 billion, but 2020's profit is nearly VND 270 billion.
Orion Vina is a company under the Orion Group of Korea. Orion Vina Food Co., Ltd. has invested in building a production plant in Vietnam since 2005 and currently has two factories in Ho Chi Minh City and Bac Ninh. Some of Orion's products such as ChocoPie, Custas, Gouté, and O'Star snacks are loved by children and adults alike. With affordable prices, the delicious taste has helped Orion Vina have a place and win the love of everyone.
Orion Vina's net revenue and profit after tax increased year by year from 2020-2022. Specifically, in 2022, the brand's revenue will reach nearly 9,500 billion, up 32% compared to the previous year and up 62% compared to 2020. Profit after tax increased by 31-34% to more than 1,500 billion.
Bibica Joint Stock Company is one of the leading confectionery manufacturing and trading companies in Vietnam and has a very familiar brand name with consumers. Each year the company can supply the market with more than 20,000 tons of confectionery of all kinds such as Tet cakes, cookies, chocolates, moon cakes, hard candies, and soft candies,... Some confectionery brands are quite famous in the market of Bibica such as Hura, Goody, Orienko, Migita, Bon Mua,...
In 2022, the enterprise's net revenue reached more than VND 1600 billion, an increase of 32% compared to 2021. In terms of profit after tax, 2021 witnessed a clear decrease, down more than 4 times compared to 2020. However, in 2022, profits increased strongly, 2 times higher than in 2020 and more than 750% higher than in 2021.
Liwayway Saigon Food Industry Joint Stock Company specializes in manufacturing and distributing Oishi branded snacks and bottled water to serve the domestic market. Oishi is one of the first multinational brands to enter the Vietnamese market and has its first factory in Binh Duong. Up to now, besides popular snacks, Oishi has also developed cookies, candy, and soft drinks.
Liwayway Saigon's net revenue in 2022 reached VND 2280 billion, an increase of 50% compared to 2021 and 15% compared to 2020. Profit after tax recorded a loss in 2021. However, in 2022 the business achieved a positive profit, nearly VND 270 billion, up 8% compared to 2010.
Hai Ha Confectionery Joint Stock Company was established in 1960 and has grown to become one of the major brands from Vietnam in the confectionery industry. The company's main product is candy, then cakes of all kinds. Hai Ha targets the popular customer segment, always accompanied by quality and competitive prices.
Hai Ha's revenue decreased by 34% in 2021 and increased in 2022 to reach nearly VND 1450 billion. Net revenue did not change too much compared to 2020. In terms of profit for two years 2020 and 2021, profit increased by 12 billion from 40 billion to 52 billion. Profit in 2022 is almost stable compared to 2021.
Lotte is a large multinational business group in Korea. Lotte established Lotteria Vietnam Co., Ltd. in 1996. The brands that play a key role in Lotte Vietnam's business are "Lotte Xylitol", "Toppo", "Koala's March" and "SukuSuku". In addition, we also have many brands of chewing gum for children.
Lotte's net revenue will reach nearly VND 900 billion in 2022, up 26% compared to 2021 and 42% compared to 2020. Although revenue reached nearly VND 1,000 billion, Lotte did not record a positive profit, reaching a negative VND 50 billion in 2021 and a negative VND 40 billion in 2022.
Hai Chau Confectionery Joint Stock Company is one of the leading companies in Vietnam in the field of cake, candy, and food production. Products such as dry food, sponge cream, and soup powder of Hai Chau have long been popular in most parts of the country and have always been trusted by consumers.
With more than 50 years of confectionery production, Hai Chau constantly improves the quality to meet the market demand. Famous products in the market such as cookies, crackers, sponge ice cream, soft cakes, bread, croissants, premium moon cakes and Hong Kong lava cakes, soft drinks, and jellies.
Hai Chau's net revenue in three years increased slightly by 20-30% compared to 2 years ago, an increase of VND 800 billion. Profit after tax also increased year by year, reaching more than 11 billion dong in 2022, up 26% compared to 2021 and 39% in 2020.
Trang An is a famous national confectionery brand, having spent more than half a century of formation and development to crystallize into the "Vietnamese confectionery quintessence" as it is today.
For many years, consumers have known about Trang An with Huong Com candy products, typical of Hanoi's Vong village. From the traditional spearhead products until now, Trang An has developed many product designs suitable to the taste of Vietnamese people such as Belgi cake, Cinnamon cake, French cake, Rice cake, Coconut candy, and many other products. In particular, moon cake is also a key product of Trang An, an indispensable gift in Vietnamese families every Mid-Autumn Festival.
In 2022, net revenue will reach nearly VND 1000 billion, nearly 2 times higher than 2 years ago. Trang An's profit after tax is stable in 2020 and 2021, reaching VND 9 billion and having a breakthrough in 2022 reaching nearly VND 25 billion, an increase of nearly 160% compared to 2 years ago.
The confectionery industry is currently facing intense competition, particularly in the mid-end and high-end segments. The negotiating position of retailers is growing and they have many more requirements about cost increases, trade discounts, display costs, and marketing at the point of sale. In addition, the cost of raw materials, packaging, logistics costs, asset depreciation costs, and loan interest also affect business results. Because of the fierce competition in today's market, brands must therefore have a suitable strategy in place to maintain their position relative to rivals.
Source: Vietdata's 2022 Vietnam Confection Market Report