nielsen personal finance monitor 2011

Nielsen Finance IPG 2011

Vietnam Landscape & Finance Trends

Presented by:The Nielsen Finance IPG

June, 2011


Agenda

• A Glance at Vietnam’s Economic Performance

• The Latest Consumer Trends

• Finance Focus Points

1. Products & Accounts

2. Effectiveness of Advertising

3. Channels

4. The Rural Market

• Q & A


Research Design

• N=600 per month

• HCMC / Hanoi

Primary source

Respondent Criteria

• Male & female

• 18-50

• HIB: ABCD

• Financial Decision

makers

Methodology

• Random sampling

• F2F interviews

PFM – Personal Finance Monitor

8,000+ interviews conducted since 2010

4

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


• Nielsen Vietnam PFM

• Nielsen Hong Kong PFM

• Nielsen Indonesia PFM

• Nielsen Business Barometer

• Nielsen Omnibus

• Nielsen Global Online Survey

• Nielsen Vietnam Retail Audit

• Nielsen Global Consumer

Confidence Report

• Nielsen Shopper Trends

• Nielsen Rural Syndication

• Asia Development Bank Outlook

2011

• The General Statistic Office

• Central Bureau of Statistics

• www.dekitfinance.com

Internal Sources External Sources

Nielsen Solutions

• Nielsen Vietnam PFM

• Secondary Cities PFM

• Nielsen Ad-trak

• Mystery Shopping

• Customer Segmentation

Information Sources

5



A Glance at Vietnam’s Economic Position

6



LPG retailer increases

(4 adjustments)

“Six currency

Devaluationsin the past 2 years”

National Party Elections and

Party Congress Jan. 2011

“what changes will we see?”

Foreign Reserves: enough?

Banking Capitalization?

Trade Deficit of $9.5B

Vinashin –

“are some state-owned

firms are in trouble?”

Fuel increased by +18%Electricity price

increased by +15%

Changing economical climate in the last 6 months…

7



Positive growth yet consumer confidence impacted in short-term

•Sources: Consumer Confidence, Nielsen Global Online Survey 2007-10; GDP Growth ; Inflation Data & Estimate from Asia

Development Bank Outlook 2011 & The General Statistic Office, FMCG Growth from Nielsen Vietnam Retail Audit

Consumer ConfidenceFMCG Volume Growth

10%

4%

13%15%

2007 2008 2009 2010

+

+

++

106 9785

109 101119

88103 98

2008-

Q1

2008-

Q3

2009-

Q1

2009-

Q2

2009-

Q3

2009-

Q4

2010-

Q1

2010-

Q2

2010-

Q3

2010-

Q4

2011-

Q1

GDP Growth & Its Contribution Inflation

2011E: 13.3%2011E: 6.1%

8



99% of

respondents are

aware of the

devaluation of

Vietnam Dong

94% of them

claimed that this

change would

have big impact

for them

1. Reduce spending (53%)

2. Daily expenses rise (12%)

3. No comfort spending money (11%)

Personal daily expenses

1. Economy growth will decline (34%)

2. Inflation (21%)

3. Price of all items increases (20%)

Vietnam economy

Continuing devaluation of the VND has concerned consumers

9



Luxury spending and savings are the two biggest casualties.

Cut spending on unnecessary

items

Have to cut monthly saving

Spend less on entertainment

activities

I have to look for discounted

daily goods to save money

Spend less on other beauty

care activities

81

67

49

44

33

Total

N=569

Deposits &

Savings could be a

“victim” of this

reaction.

13,000

14,000

15,000

16,000

17,000

18,000

19,000

20,000

21,000

22,000

USD / VND EXCHANGE RATE



10



Consumer Confidence Index

11



VN consumers’ perception…

Job

prospects

in N12M58%

(Excellent/ Good)

62%(Excellent/ Good)

14

18

13

7

9

4

13

14

10

14

12

9

6

18Job security

Health

Work/life balance

Increasing food prices

Increasing utility bills

The economy

Increasing fuel prices

13

12

11

10

5

6

14

14

12

11

8

8

5

20The economy

Increasing food prices

Work/life balance

Health

Job security

Increasing utility bills

Childrens' education/ welfare

Biggest concern

Second biggest concern

APAC

•Sources: Nielsen Global Consumer Confidence Q4’10

Base: All respondents (n=505, 7009)

% %

Major concerns over the next 6 months

Major concerns with job security & increasing daily commodities

Personal

finances

in N12M

12



131

118 116110 110 110 109 109 108 107 106 105 102 102

98

Indi

a

Saud

ia A

rabi

aIn

done

sia

Aus

tralia

Phillip

ines

Switer

zlan

dSing

apor

e

U.A

.E

Chin

aHon

g Kon

gTh

ailand

Malay

sia

Egyp

tCa

nada

Viet

nam

•Sources: Nielsen Global Consumer Confidence Q4’10

Base: All respondents (n=505, 7009)

Q1 2011

Major concerns with job security & increasing daily commodities

13



The Latest Consumer Trends

14



A ‘purchase Vietnamese’ trend continues but has softened in the search for ‘value’.

•Sources: Nielsen Shopper Trend Research 2010

15



7.0 8.03.7

41.9 40.7 46.1

3.2 3.6 2.08.1 8.0 8.1

6.8 6.5 7.9

16.5 17.7 12.6

6.93.64.4

Total

(n=5400)

HCMC (n=2700) HN (n=2700)

Daily expenses now account for almost 50% of the customers wallet. Leaving around 20% for Savings and Investments.

11.94.7 6.5 5.3

40.3

42.043.0 42.1

3.1

3.33.3

3.1

8.6

8.27.5 8.2

6.26.9

6.8 7.8

14.917.2 17.1 16.4

4.34.34.64.3

18-25 yo (n=1166) 26-35 yo (n=1752) 36-45 yo (n=1578) 46-50 yo (n=904)

•Sources: Nielsen Omnibus Mar ‘11

Others

Investment

Saving

Buying luxurious items

Shopping

Travelling

Daily expenses

Studying

% Allocation of Household Income

16



Why do I save?

1st

Benefits of home saving

Save for child's education

25%2nd

Save for security

31%

3rdSave for future

8%

1stMore flexible access

23%

2ndMoney always available

14%

Why do I choose to save at

banks?

1st- Earn interest

- Convenient for doing business

Monthly Average Saving

Amount – Mean score

Total 1,276,675 VND

HCM 1,373,180 VND

Hanoi 992,834 VND

Security and child’s future are the top priorities. Flexibility and immediate access helps to push people towards home saving.

•Sources: Nielsen Vietnam PFM

17



Products

&

Accounts

Nielsen is thekey provider of

a valuable

spectrum of

category & brand

insights…what are the

trends?

18



Transactional account

ATM/ debit card

Deposit/ saving account

Bank loan services

Foreign exchange service

Domestic money transfer/payment

International money transfer

Credit card

Transaction account (without card)

Custody service

Other banking services

Banking Products – Awareness, Usage & Intention

Aware Currently using Future Intention

Base: All Respondents (7200)

Strong intention is not currently being converted into actual usage, with usage levels seemingly

affected by the recent confidence levels.

14

25

33

42

58

88

87

100

100

100

100

0

0

1

1

0

4

1

2

12

31

32

6

2

9

13

7

21

11

7

36

38

32


19



ATM/Debit

100%

Credit

42%

ATM/Debit

32%

Credit

1%

Awareness

Usage

Base: all respondent (n=7200)

Credit

5%

Indonesia

Credit

60%

Hong Kong

Market Comparison

Indonesia Hong Kong

Banking Products – Credit Card Usage

Credit cards have yet to take off in Vietnam, but historical usage trends in

other markets suggest it’s only a matter of time.

•Sources: Nielsen Vietnam PFM, Nielsen Hong Kong PFM, Central Bureau r of Statistics

20



• Credit cards have only been popular for the last 10 years

• Number of cards increasing at 10% per year from 4.52 to 13.4 million in 8 year period

• Value of transactions increasing at 28% per year

Routine household expenses

Routine personal expenses

Impulsive (unplanned) shopping

Short of cash

Emergency purpose

Attractive discount for fashion items

Attractive discount in restaurants

Attractive installment program

Irregular household expenses

Routine billing payment

80

64

47

37

32

26

20

20

14

12

72

47

31

24

19

19

14

13

10

9All CC

Main CC

Grocery

Clothing & accessories

Restaurant / café

Electrical appliances

Books

Health care

Entertainment

Travel

96

74

48

29

23

18

10

9

What does the future hold?

Channels of UsageOccasions of Usage

Indonesia

Source: Indonesia Credit Card Numbers: www.dekitfinance.com,

Central Bureau of Statistics; Other: Nielsen Indonesia PFM

21



Base: who aware of credit card but do not

currently use (n=1221) R 7-12

Inconvenience

/ Complicated

procedure

18%

Lack of

knowledge

19%

High fee is

applied 7%

Credit Cards - Current barriers

Reasons for not using credit cards

Over half the market do not fully understand what a credit card is and for those

who do there are barriers around their lack of knowledge and convenience


22



How to attract new users? Non-bank users

Potential triggers (n=4136)

% Lengthy procedures 64%

Valued pledged

assets required 52%

Financial/ income

Information required 51%

High interest rates 46%

(loan)

Key Barriers

(n=4136)

Key Barriers

(n=4136)

Not qualified for

using loan services 21%

Interest rates

60%

33%

58%

47%

Simple and quick

procedures

No financial/ income

evidence required

Issued by

prestigious

bank

Base on non bank users (R1-12)

Both operational and marketing changes need to be made to address the

concerns of the non-banking market.

Operational Issues

Marketing Issues

Triggers to start banking Reasons for not banking


23



Payroll Accounts

Payroll accounts make over a third of the market, however only a small

fraction of these customers consider this to be their main bank.

Base: Bank users (n=1501)

Yes, and I have choice to

use either my own bank

account or account opened

by my company

Yes, and I have to use bank

account opened by my

company

No 42

58

I choose the

bank in which

my company

opened account

for me

I choose

another bank I use it for

receiving salary

and some other

transactions

I use it as my

main bank

I use it for receiving

salary only

Base: Those who had a choice

(n=85)

Base: Users of bank

accounts opened by

companies (n=603)

35%

6%

59%

Does company open

bank account?

Which account do

you use?

12%

19%

68%

Is this your primary

account?


24



Base: Bank users – 2H 2010

60

25

60

28

61

19

29

43

26

43

34

42

9

28

12

26

30

1 27

1 1 1 1

2

1

42 Totally not comfortable

Somewhat not comfortable

Neutral

Somewhat comfortable

Totally comfortable

Local banks Local banks Local banksForeign banks Foreign banks Foreign banks

Total (n=1501) HCMC (n=584) Hanoi (n=917)

On the whole customers feel more

comfortable dealing with local banks.

However, 68% said that they would feel

comfortable using a foreign bank.

Low rate of

usage for foreign

banks

Current usage rate:

1.HSBC: 2%

2.ANZ: 1%

Vietnamese vs. Foreign Banks


25



Advertising

Effectiveness


a valuable

spectrum of

category & brand

insights…

26



Marketing activities are somewhat effervescent in the financial services industry…

27



USERS

AD AWARE

USERS

NON-AD AWARE

NON-USERS

NON-AD AWARE

VIETINBANK

BIDV

VIETCOMBANK

AGRIBANK

ACB

DONG A BANK

ABB

TECHCOMBANK

MB

VIB

SACOMBANK

MARITIME BANK

VP

HSBC

ANZ

TOM Other spont Aided

86

76

74

48

32

24

26

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

84

89

82

80

52

62

79

83

85

86

84

90 9

13

20

15

11

15

17

14

15

18

17

1

1

1

6

1

3

1

81

43

29

16

16

50

53

3

1

1

3

7

18

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

65

74

81

58

75

50

78

62

64

79

84

75

20

47

42

18

20

22

14

25

33

15

31

2

4

3

4

22

6

5

1

57

61

77

67

24

74

52

31

84

66

95

91

95

89

25

86

49

49

84

18

18

53

31

1

2

3

1

22

18

30

38

4

12

20

7

64

46

77

18

18

47

62

Base: For each individual bank

NON-USERS

AD AWARE

11

28

11

8

23

23

28

36

76

61

89

92

100

99

100

100

99

99

97

99

97

98

99

99

100

100

100

1

1

1

1

1 49

54

38

37

76

76

70

63

21

16

23

62

74

72

88

49

82

45

Advertising Effectiveness – Brand Awareness Amongst both users and non-users advertising helps to achieve brand

recognition and recall.


28



Wide range of services

Efficient Process/ Procedure

Broad network of branches

Professional style and attitude

Good customer services

Is financially secure

Attractive/user-friendlytransaction points

Is strongly recommended by every one

Attractive promotion programs

A market leader in Vietnam

20 40 60 80 100

(n=420) (n=579)

(n=122) (n=710)

20 40 60 80 100

(n=261) (n=454)

(n=121) (n=1032)

20 40 60 80 100

(n=149) (n=632)

(n=35) (n=1114)

20 40 60 80 100

(n=145) (n=462)

(n=43) (n=1128)

20 40 60 80 100

(n=152) (n=308)

(n=79) (n=955)

VIETCOMBANK AGRIBANK ACBTECHCOMBANK DONG A BANK

Users Ad-aware Non-users Ad-aware

Users Non-Ad-aware Non-users Non-Ad-aware

Advertising Effectiveness – Brand Image Financial services advertising is on the increase. Whilst this driving

recognition it is less effective at distinguishing any differentiating attributes.

Nielsen Hypothesis:

If advertising impacts brand

image, there should be a

noticeable difference in

attribute scores between those

who have seen the ad and

those who have not.

Results:

Current results indicate that

there is no discernable

difference in perception of the

bank between those who have

seen the ad and those who

have not.


29



Channel

Usage


a valuable

spectrum of

category & brand

insights…

30



Online Banking

Call Operator

Banking Channels

ATM

Branch Service

Mobile Banking

Base: bank users (N=672)

2%

4%

87%

84%

4%

37%

23%

77%

51%

N/A

Vietnam Hong Kong

HK also has a

further 2 key

channels:

•WM Center 22%

• RM 23%

•Sources: Nielsen Vietnam PFM, Nielsen Hong Kong PFM

31



31% 20% 50% 38% 22% 66%

24% 16% 39% 30% 22% 43%

Mobile banking

2% 0% 4% 17% 23% 13%

2% 1% 2% 8% 11% 6%

Online banking

Mobile banking

Online banking

Awareness

Usage

Base: Bank users

Total HCMC (A) Hanoi (B)

n=672 n=243 n=429


n=352 n=67 n=285


n=672 n=243 n=429


n=289 n=243 n=429

Q4 2010 Q1 2011

Transactional Channels – New Channels

Base: Bank users & aware of channel

While awareness still remains a barrier to usage, amongst those who are

aware of the channel usage has increased rapidly in just the past quarter.


32



Mobile

banking

Total

94%

HCMC

86%

Hanoi

98%

Base: bank users (Round 10-12)

Online

banking

Total

96%

HCMC

94%

Hanoi

98%(T2B: Somewhat will do this

Definitely will do this)

Concerns about usage Total

(n=275)

HCMC (A)

(n=33)

Hanoi (B)

(n=242)

23

51

66

53

38

17

Total

(n=214)

HCMC (A)

(n=47)

Hanoi (B)

(n=167)

30

41

78

70

34

22

11

65

44

25

57

23

28

45

74

63

30

14

22

37

71

67

28

30

36

44

83

72

39

15

Lack of knowledge

Concern about the effectiveness

Security and trustworthy

Errors might happened

No evidence is recorded

Not as convenient as advertised

A

A

A

B

Transactional Channels – Intention & Concerns Customers appear to be increasingly open to the use of technology to

improve convenience in banking, but ‘trust’ issues still exist.

Intentions of Usage


33



Base: Bank users (Round 7-12)

Mobile banking

(n=76)

Online banking

(n=61)

SAFETY (81%)

• I feel secured and safe (51%)

• Popular/ widely used (14%)

• Stable system, no technical errors (13%)

• High level of security (6%)

• No mistakes occur during transaction (6%)

• Supported/ recommended by others (5%)

STAFF (17%)

• Well explained services by staff (10%)

SAFETY (86%)

• I feel secured and safe (60%)

• High level of security (20%)

• Trust-worthy (9%)

• Popular/ widely used (6%)

STAFF (26%)

• Well explained services by staff (8%)

• Staff are agile and efficient (5%)

CONVENIENCE (5%)

Remote Channels Users – Improvements wantedImproved security measures (or education around these) would greatly ease

customer concerns and drive intention into actual usage.


34



Rural

Vietnam


a valuable

spectrum of

category & brand

insights…

…the next

frontier of

growth?

35



Vietnam

Population 88 millions

Male

Female

43.1 millions (49.5%)

43.9 millions (50.5%)

Urban 2009

Rural 2009

29.6%

70.4%

Cantho

Ho Chi Minh

Danang

Hanoi

Haiphong

Nhatrangapprox.

62,000,000

Vietnam - Rural population

36



Despite concerns, leaders remain optimistic on strong growth largely via increasing demand & business expansion (secondary cities / rural)

4 5 2

17 14

7

1712

12

20

28

17

20

2131 30

23

11

2009 2nd half 2010 1st half 2010 2nd half

>25%

21% - 25%

16% - 20%

11% - 15%

6% - 10%

Less than 5%

Expected company growth rate

in N12M

•Sources: Nielsen Business Barometer

12

14

31

43

45

76

72

Improved business conditions in your

industry overall

Improved business conditions in

Vietnam overall

Increased marketing expenses

Expansion to new categories/

industries

Expansion to modern trade channel

Expansion to secondary

cities/ rural areas

Increased consumer demand in

your existing categories/ industry

Expected top factors for company growth

91%

37



* Six City, 30 cities and Rural store numbers and ACV from census results, 53 Cities estimated.

7461

2739

5

6

14

7

7

10

22 14

1423

37 40

0

20

40

60

80

100

Population Stores Retail Sales FMCG

6 Cities

30 Cities

53 Cities

Rural

National FMCG Retail Market Structure

Rural Market – Size of the market

The huge rural population of Vietnam accounts for 39% of today’s FMCG

sales - but is there any money for the banks?

•Sources: Nielsen Retail Audit

38



Urban Rural

158%

177%

Source: Government Statistics Offices

Rural growing faster than Urban

%: GROWTH vs. 2002

Rural income levels are only

fours years behind Urban levels

Monthly Average Income Per Capita

Rural Market – Strong growth Whilst income levels in the rural market remain well below those of urban

areas the growth levels are actually very similar.

The average income could be only 4 years behind the urban average.

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2002 2004 2006 2008

39



Central Highlands

North West / North East

South East

Mekong

Delta

North Central

Red River

Delta

South Central

Ha NoiNorth:

462,000 VND

Central:

377,000 VND

South:

571,000 VND

How Much Per Month?

75%

How Many Households Save? Where Does it go?

Keep at home: 87%

Buy gold: 7%

Savings Account: 6%

Foreign currency: 2%

Buy insurance: 2%

Rural Market – Is there any money?

75% of rural families claim to save every month. Although the actual

amounts are around half of that in urban areas 87% is still kept in the home.

Monthly Average Saving

Amount – Mean score

HCM 1,373,180 VND

Hanoi 992,834 VND

•Sources: Nielsen Rural Syndication

40



Current Usage

(n=1800)

Intention

(n=1800)

Current Usage

(n=4200)

28

9

3

1

22

37

22

7

4

5

1

3

Future Usage

(n=4200)

6

13

1

5

ATM/ debit card

Deposit/ saving account at bank

Domestic money transfer/payment

Loan services provided by banks

Urban (Q1 2011) Rural 2010

Rural Hotspots

Rural Market – Which products should be the focus?Rural demand for cards is understandably low, but demand for savings and

loans not so different to urban areas. There are hotspots with some usage.

Current Usage

(n=300)

16

14 12

15

Current Usage

(n=120)

Dak Lak Yen Bai

Nielsen’s Rural Syndication report has basic information on 21

provinces, including current usage and future intention of products


41



Best rates

11%

Stood out

11%

Seen on TV

5%

Family

Recommend

ation

42%

Usage TriggersBrand Awareness Customer Share

84%

53%

25%

19%

19%

62%

15%

Rural Market – The current status Although bank presence varies considerably by region there are only two

main players who currently have a strong presence across the market.

A two horse race?



Summary

43



Market Volatility = Customer UncertaintyGrowth expectations, Inflation, currency devaluations and unstable consumer confidence are part of daily in life in

Vietnam at present. These messages and events are having a real impact on the customer mindset. Get in touch with

the customer mindset, their needs haven’t gone away.

Communication EffectivenessAt present there appear to be limitations on what financial services advertising is achieving. What are you trying to

achieve? If its simply building awareness of your brand then fine but if its more than that what does your advertising to

do differentiate your brand and how does that effect the consumer mindset?

Technology is welcomeThese innovations are finally being accepted by the market in connection with financial services. Establishing a strong

reputation for efficient and secure remote banking channels will drive usage, positively enhance your brand and attract

new customers.

Rural – Now or Next?The rural market represents a huge number of potential new customers, but is there enough positive sentiment or

financial reward in being there now? Are you positioned to act now and if you don’t will you get left behind?

Summary


Thank you.

Questions?