- Category: Press releases
According to a report by market researcher Nielsen, the Fast Moving Consumer Goods (FMCG) sector in 6 major cities of Vietnam experienced a growth rate in Quarter 4/2016 of +7.3%, the record figure over the past 3 years. Additionally, data from the General Statistics Office also revealed that, total retail sales in 2016 reached 2.68 million billion VND, an increase of 10.2% compared to the previous year.
Generally speaking, with such promising outlook, specialists’ anticipations are that the FMCG sector will continue to flourish in 2017. Recently, this profitable “playground” has witnessed the participation of several multinational companies, as well as vibrant activities of certain domestic enterprises. As market conditions become more competitive, corporate leaders need to constantly enhance their operational efficiency, in which distribution and sales management is always the top priority for sustainable growth in the FMCG industry.
Growth rates of FMCG sector in Vietnam. Source: Nielsen
Distribution management system: are depth and breadth enough?
Of all manufacturing and trading areas, FMCG goods are characterized as having high sales volume, diverse range and daily consumption demand. In Vietnam, around 80% of FMCG revenue stems from general trade channels (wet markets, traditional grocery stores, etc.), and rural areas contribute roughly 51% to the total sales of FMCG industry nationwide.
Understanding this trend, FMCG companies are focusing efforts on improving and upgrading the distribution management system in terms of depth and breadth. Even before advertising campaigns for new items are launched, management have to ensure their products are ready to reach consumers everywhere and anytime, accompanied by attractive promotions to stimulate purchase. With approximately 1.3 million retail outlets for utilization, the capital flow by enterprises into distribution channels is no less than their investments in advertising and building brand awareness.
Investing in and growing the distribution system are major concerns of many FMCG companies. Source: Doanh Nhan Sai Gon, translated by DMSpro
Throughout the distribution system, assuming the role of “tackling” the market are sales representatives. They are charged with visiting and taking care of outlets, persuading customers to join trade marketing programs, and display goods in an eye-catching manner. Furthermore, salesmen report data on revenue, inventory, product coverage and competitors to direct supervisors. If this model is to realize its true potential, every level in the distribution network – from country, regions, cities / towns to districts and routes etc. must work in sync and share information on a timely and accurate basis.
Nevertheless, how do we know that sales reps comply with sales processes? Have promotional policies been conveyed in full to customers? Does reporting of “fake” outlets to meet KPIs ever exist? Do distributors provide manufacturers with authentic data? Similar questions point to a more urgent issue: FMCG companies are yearning for a solution that not only helps them manage real-time distribution activities, but also reduces errors, minimizes risks and boosts operational efficiency.
Applying technology in distribution and sales management
In recent years, some FMCG corporates have started to deploy Distribution Management System (DMS) software. This is by no means a passing fad, because solutions developed by international standards – especially on ERP platforms of top-notch technology firms, have proven outstanding benefits.
On 3 May 2017, Sun Resources Food Vietnam (part of Mayora – the leading FMCG Group of Indonesia, with candies and biscuits consumed in over 90 countries worldwide) organized the DMS Project Kick-off in Ho Chi Minh City. The solution partner selected by SRF is DMSpro, the pioneer to provide cloud-based distribution management system (DMS) solution in Vietnam.
Based on the agreement, DMSpro will support SRF to apply the S.DMS (Powered by SAP B1) solution which is inherited from ERP standards of SAP (Germany), with additional features and modifications necessary for the local FMCG industry.
Mr. Nguyen Quoc Hung – Project Manager of DMSpro presented during the kick-off meeting at Sun Resources Food
Specifically, a single, centralized DMS system will be implemented from the Head Office to more than 80 distributors and over 380 sales representatives of SRF. Consisting of Sales Force Automation (SFA), e-Route, Visibility and e-Calendar, this solution can assist SRF in tightening the connection between the company and its distributors, decreasing manual tasks, easily managing inventory, promotions and sales activities, with real-time data synchronized from salesmen’s tablets to the system.
The partnership between SRF and DMSpro demonstrates that, aside from growing the distribution system, FMCG enterprises increasingly appreciate the application of information technology to effective distribution and sales management. This project is expected to open up tremendous development opportunities for SRF in particular, and Vietnam’s FMCG industry in general as the “digital age” is booming with huge untapped potential.