Following the outbreak of COVID-19 in Vietnam the government moved swiftly to try and contain it and stop it from spreading. While these measures were commended by some global health authorities, they nonetheless took their toll on the Vietnamese economy with unemployment seen to reach its highest point in a decade, with hundreds of thousands of people losing their jobs.
While economy cigarettes struggled due to the economic impact of COVID-19, mid-price and premium band cigarettes continued to growth, with the latter in particular building on the strong showing seen during the review period. This was largely due to the fact that mid- and high-income consumers were not as severely impacted by COVID-19 and so they continued to choose their favourite cigarette brands.
The Vietnamese government largely controls the country’s tobacco industry through its ownership and management of Vietnam National Tobacco Corp (Vinataba). Vinataba continued to dominate cigarettes in retail volume terms in 2020.
Cigarettes is projected to return to growth in retail volume terms from 2021 as COVID-19 restrictions are eased and the economy starts on its path to recovery. Low-income consumers should once again be able to afford to purchase cigarettes, which would be significant, while it would also provide a boost to Vietnam National Tobacco Corp (Vinataba), for which these consumers represent a key source of sales.
Despite the largely positive outlook for cigarettes, illicit cigarettes are still forecast to continue putting strong pressure on cigarettes players, including both domestic and international brands. Illicit cigarettes will likely continue to see growth due to a lack of financial and human resources available to the Vietnamese government to tackle the problem.
Cigarettes also faces the dual challenge of declining smoking prevalence and the potential rise of alternative products which are perceived to be less harmful, such as heated tobacco. With the leading tobacco companies looking to diversify their offering into these new product areas it is unlikely that cigarettes will see significant growth over the forecast period, although a large and loyal consumer base should ensure sales do continue to grow.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Vietnam with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
If you're in the Cigarettes industry in Vietnam, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
This report originates from Passport, our Cigarettes research and analysis database.
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