vietnam business outlook
TRANSCRIPT
Vietnam Business Outlook
Vietnam Grocery Report
August 2010
2
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Agenda
1. Vietnam Heating UpA young country with positive economic indicators
2. Retail LandscapeHigh sales & store growthFMCG Snapshot
3. Vietnamese Consumer InsightsCapturing different consumer shopping behaviors
4. New TrendsAs the competitive market is always changing, new trends emerging
3
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Senior Leaders of manufacturers in Vietnam• Total sample N=57• Period: July 2010
• Conducted July 2010• Global online study in 55 countries
Understanding consumer differences•Total sample N = 600•Period: May 2nd to 15th 09•ABC HIB, males & females, 20 to 45 yo
•City coverage: HCMC, Hanoi, Danang, Cantho• Target respondent: Males/Females aged 18-65 years• Methodology: face to face interview•Total sample N=1500•Period: 15th Oct to 15th Nov09
Others source of information:
•Macro Economic data•Nielsen Omnibus April 2009•Nielsen Global Omnibus•Vietnam Govt. Statistics Office•Nielsen Vietnam Census 2009
•City coverage: 6 cities traditional trade (HCMC, Hanoi, CanTho, Nhatrang, Danang, Haiphong)• Ended period: June 2010• Covered 43 FMCG categories
NielsenRetail Audit
Research Design
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Executive Summary• Vietnam to continue displaying great promise:
– Young population (56% under 30) will join the workforce– High confidence towards country, economy & social life– Modern Trade continues to emerge while Traditional Trade is still
dominant– Majority of population comes from rural (>70%) where it has shown
strong growth in recent years– Consumers become more sophisticated & demanding through their
wider product choice, concerns on health & beauty and smarter shopping way
– People are getting more connected through technology
• However, these opportunities come with challenges for businesses and investors alike
– Health concerns caused by air/water population and pesticides that could be an area for PR execution
– Ability to cover the dynamic and discriminate Vietnamese consumer needs
– Senior business leaders predict dynamic changes within Vietnam– Moving from a ‘premiumization’ trend to ‘promotional-junkie
behavior’ within 2009– Now a ‘buy Vietnam products’ trend is occurring
5
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1. Vietnam Heating Up
•56% of total population is under 30 years old
•GDP grows in both urban & rural
•Vietnam re-gains confidence index in Q2.2010 and ranked # 2 top confident countries in Q2.2010
•Business leaders show high expectation to their business conditions
•Key concerns of businesses center around price increases/ inflation and labor shortage
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118 106 97 85109 101
119
2007 1st Half'08
2nd Half'08
1st Half'09
2nd Half'09
1st Half'10
2nd Half'10
▼12pt
▼9pt
▼12pt
▼8pt
▲24pt
In Vietnam, growth is seen across measurable facts
•Sources: Wage growth, 2007 Economic Intelligence Unit , 2008-9 HRBS Asia-Pacific Pay Increase Guide 2009 (Survey Period: Jan 6 to Feb 6, 2009); 2010E by Vietnam government ; Consumer Confidence, Nielsen Global Online Survey 2007-10; GDP Growth ; Inflation, 2006-2007 data from IMF; And CIEC: 2008-2010 IMA Asia Brief December 2010; Asia Development Bank Outlook 2010 , 2010E by Vietnam government; ; FMCG Growth, Nielsen; Vietnam Retail Audit.
GDP Growth
+6.2%2008
+5.3%2009
+ 8.5%2007 +8.5%2007
+23%2008
Inflation
+6.9%2009
+11.22007
+42008
+102009
Wage GrowthUnemployment5.1%2007
4.3 %2008
2.9 %2009
+5.5%2010E +10%2010E
Consumer Confidence
<5 %2010E +12.32010E
FMCG Volume Growth
10%
4%
13%15%
2007 2008 2009 MAT Jun10
+
+
+ +
▲18pt
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
113108 105
101 99 98 98 98 97 97 97 94 93 92 9288 88
79 78 7873 73
69 6863 61
119119113 112109 107
102 101
6559
5556 52
129
88 87 8785 84 84 81
71
0
20
40
60
80
100
120
140
160
IN ID VN PH NO SG CN AU BR CO CA HK AE MY NZ DK IL SE NL CH PK AR TH MX ZA PL RU FI US AT BE TW DE UA GB EG CZ TR IT ES IE HU FR EE LV KO JP LT
Global average
Changes 2H10 vs.1H10
2H 2010 Nielsen Consumer Confidence Index
Vietnam shows sharp consumer confidence re-gains and is ranked #2 top confident country in Q2.2010
2 3 18 2 -2 5 1 -3 -1 5 2 2 -2 1 0 5 1 4 3 5 2 2 -3 5 4 3 2 3 2 -2 -1 -1 7 2 -2 -17 -1 3 -4 -10 1 4 -5 -1 6 0 1 6▲ ▲ ▲ ▲ ▼ ▲ ▲ ▼ ▼ ▲ ▲ ▲ ▼ ▲ ▲▲▲▲ ▲ ▲ ▲ ▼ ▲ ▲ ▲▲▲ ▲ ▼ ▼ ▼ ▲▲ ▼ ▼ ▼ ▲ ▼ ▼ ▲▲ ▼ ▼ ▲ ▲ ▲
Base : All respondents n=26995
Vietnam, 2nd most confident
93
9
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So far in 2010, manufacturers have mostly performed at least on parity with their targets. Significantly stronger than 2nd half of 2009 ~ 70% vs. 86%.
4 2
25
12
30
40
26
14
23
23
0%
20%
40%
60%
80%
100%
2009 2nd half 2010 1st half
Significantly better
Somewhat better
On par with target
Somewhat worse than target
Significantly worse than target
Business performance compared to overall target
Q5: Looking back at the first few months of the year, how well do you think your business has been doing compared to your overall targets?
10
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Business conditions in Vietnam have been improving well since 1 year ago.
113 2
49
24
9
15
30
30
21
54
4 5
41
3
0%
20%
40%
60%
80%
100%
2009 1st half 2009 2nd half 2010 1st half
Improved significantly
Improved somewhat
Remained the same
Deteriorated somewhat
Deteriorated significantly
Business Conditions in Vietnam (Now vs Year Ago)
Q6a: Compared to the same time last year, do you think business conditions in Vietnam have improved or deteriorated?
11
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Source: Nielsen Business Barometer
Leaders show high growth expectations towards the Vietnam economy and their own business condition
What do you think GDP growth rate will be for the next 12 months?What do you think your industry growth rate will be for the next 12 months?
5.0
10.2
11.3
5.7
13.6
4.9
0
2
4
6
8
10
12
14
Est. Next 12 months GDPgrowth rate
All industry est growth rate
%
2010 1st half
2009 1st half 2009 2nd half
4 5
17 14
1712
20
17
2131
23
11
0%
20%
40%
60%
80%
100%
2009 2nd half 2010 1st half
25%+
21% - 25%
16% - 20%
11% - 15%
6% - 10%
Less than 5%
What do you think your company growth rate will be for the next 12 months?
12
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Therefore businesses will continue to spend…
122
21
11
29
43
32
7
43
2
0%
20%
40%
60%
80%
100%
2009 1st half 2010 1st half
Increasesignificantly
Increasesomewhat
Remain thesame
Reducesomewhat
Reducesignificantly
Over the next 6 to 12 months, how do you anticipate your company's spending on advertising to change?
Source: Nielsen Business Barometer
13
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
What are the top concerns of senior leaders?
Source: Nielsen Business Barometer Base: All respondents
8) Foreign Investment Slowdown (12%)
Q12: Which of the following issues concern you in terms of the impact they may have on your business? Rank the top three (3) issues that concern you where 1=most concerned, 2= second most concern and so on.
7) Wage Growth (13%)
6) Labor force skill shortage (18%)
5) Inflation (24%)
4) Low GDP Growth (33%)
3) Price increases (37%)
2) Global Economic Crisis (38%)
1) Competitive pressure / activity / growth (40%)
2009 2nd half2009 1st half1) Competitive pressure /
activity / growth (68%)
2) Ability to pass on price increase (45%)
3) Inflation (42%)
4) Low GDP growth (31%)
5) Global Economic Crisis (26%)
6) Labor force skill shortage (24%)
7) Petrol prices (16%)
8) Others (Exchange rate, policies…) (13%)
2010 1st half 2010 1st half
1st Half 2010
3) Inflation (56%)
7) Global Economic Crisis (10%)
4) Labor force/ skill shortage (29%)
1) Competitive pressure/activity / growth (68%)
2) Ability to pass on price increase (59%)
8) Others (Government regs, currency depreciation (10%)
6) Wages growth (12%)
5) Petrol prices (22%)
14
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Labor shortage is definitely a concern of businesses in Vietnam
1 211 2
53
30
31
4
46
11
0%
20%
40%
60%
80%
100%
2009 1st Half 2010 1st Half
Increasesignificantly(5)
Increasesomewhat (4)
Remain thesame (3)
Reducesomewhat (2)
Reducesignificantly(1)
Over the next 6 to 12 months, how do you anticipate your company's work force numbers to change?
Source: Nielsen Business Barometer
15
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A ‘young’ population means an increase in purchasing power as it joins and progresses in the workforce
General Economy: PopulationSource: U.S. Central Bureau, International Database
0 1,000 2,000 3,000 4,000 5,000
0 - 4 5 - 9
10 - 1415 - 1920 - 2425 - 2930 - 3435 - 3940 - 4445 - 4950 - 5455 - 5960 - 6465 - 6970 - 7475 - 79
80+
010002000300040005000
FemaleMale Vietnam 2009Total Vietnam Population
Population under 30 years old: 56%
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0
10,000
20,000
30,000
40,000
50,000
60,000
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Labor force ('000 individuals)
Source: Government’s General Office of Statistics (www.gso.gov.vn)
This workforce will further fuel the GDP Per Capita in the coming years
402 440552
725835
1,0241,074
1,200
2000 2002 2004 2006 2007 2008 2009 Expected2010
GDP Per Capita (in USD)Labor force (‘000 individuals)
17
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2. Retail Landscape
•Modern Trade continues emerging from both sales & store growth while Traditional Trade is still dominant
•The majority of Vietnam population lies in rural areas (74%) which also contributes biggest to FMCG sales (46%)
•The main purchasing power still comes from the 6 urban cities (only 14% population generates 39% FMCG sales) and continues to develop at the fastest rate
•Beverage & Food products are growing the fastest
18
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Retail Structure Change
19
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Page 19Page 19
National FMCG Retail Market Structure
The leading 6 cities account for 39% of Vietnam FMCG sales. Rural areas provide greater FMCG contribution to total Vietnam’s sales as this is where a majority of the population lie
7461
46
27
5
5
4
14
7
9
11 22
1425
39 37
0
20
40
60
80
100
Population 2007 Store 2009 FMCG ACV 2009 Retail SalesEstimated
6 CITIES
30 CITIES
53 CITIES
RURAL
Source: Six City, 30 cities and Rural store numbers and ACV (store turnover) from census results, 53 Cities estimated. Population, Retail Sales
(FMCG sales + Other retail sales such as Durable goods) from Government Statistics 2006
20
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Business leaders also plan to expand their business to rural areas
4 2
32
2526
51
53
1318
58
17
0%
20%
40%
60%
80%
100%
2009 1st half 2009 2nd half 2010 1st half
Increase significantly
Increase somewhat
Neither increase nor decrease
Decrease somewhat
Decrease significantly
In the next 12 – 18 months, to what extent will you look to rural Vietnam areas to drive your company growth?
Source: Nielsen Business Barometer
21
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2009OFF PREMISE
Store Number
% Store growth vs. YA
% ACV growth vs.
YA
Modern Trade 752 45 63
Trad. Grocery 501,135 6 16
Street Vendor 10,717 -23 -19
Personal Store 19,055 3 4
Market Stall 83,700 -4 0
Cosmetic Store 893 -9 -4
Beverage Store 19,327 6 0
MBS 1,566 -36 -24
Cigarette Kiosk 20,602 -14 -29
Pharmacy 15,518 0 9
Other 6,130 1 3
2009ON PREMISE
Store Number
% Store growth vs. YA
% ACV growth vs.
YA
Café 241,478 4 3
Eatery 171,673 4 8
Sidewalk Eatery 10,068 -3 -1
Res. Vietnamese 9,826 -2 0
Billiard Centre 11,659 -27 -22
Karaoke 6,537 -15 -4
Others 52,802 -4 -1
Store number and ACV growth by channels in Off and On channel in Vietnam
Source: Nielsen Retail Census 2009
Modern Trade grows fast through store numbers and overall sales per store, while Traditional Trade is still dominating
Note: ACV = All Commodity Value (Store turnover)
22
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Average Frequency of Visits per month
3.3
28.1
1.2
25.2
3.3
1.4Hypermarkets
Supermarkets
Wet Markets
2008 2009
Consumers have increased spend per visit in the MT channel
2
21
77
5
43
51
Hypermarkets
Supermarkets
Wet Markets
Trade Sectors Where Shoppers Spend the Most Money
Source: Nielsen Shopper Trend 2010
23
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The increased spend probably comes from a higher % of fresh foods being purchased from Modern Trade versus last year
4 2 2 8 7 134
15 1619 17 17
24 32
56
29
63 60
277
78 81 81
4 4 1 4 1 61
5453
1819
60
5 2 2 11 2 2
0
20
40
60
80
100
Fruit &vegetables
Meat orpoultry
Fish orseafood
Snack CSD Dairyproducts
AlcoholicProducts
Personalcare
products
Householdcleaningproducts
Others
Confectionery Shops
Wet market
Liquor Stores
Traditional Grocery
Supermarkets
Hypermarket
Source: Nielsen Shopper Trend 2010
Supermarket Cont. % (2008 report)
Place of Most Often Purchased by Category
7% 9% 7%
24
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Modern Trade Contribution to Sales RevenueQuestion: How important is the modern trade to your business today (as a % of your business’s revenue)? What do you expect MT (as a % of your revenue) to be worth by the end of the year?
Source: Nielsen Business Barometer
This can explain why 2010 seems to be the year when manufacturers look for more contribution from Modern Trade
Less than 5% (2.5) 5% - less than 10% (7.5)
10% - less than 20% (15) 20% - less than 30% (25)
30% or greater (35)
26 20
2530
23 21
13
13 15
15
Now End of '09
2009 2nd half
22 17
1215
46
29
15
210
27
Now End of '10
2010 1st half
Mean score 13.8% 14.8% 13.3% 16.4%
25
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Even more so as the Modern Trade sector in Vietnam still has much opportunity compared to other countries within the region
89
48 4335
9
5145
36
10
91
51 48 4637
1011
46
90
48
Singapore M alaysia Thailand Phil ipp ines Indonesia V iet nam
Share of trade for modern self-service outlets
Source: Nielsen Retail Audit - all FMCG, Vietnam – Yearly census
26
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FMCG Snapshot
27
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Nielsen Vietnam Tracked Categories
PERSONAL CARE
Hair Conditioner
Personal Wash
Shampoo
Deodorants
Toothpaste
Facial Care Products
Repellent
Body Cream Lotion
Toothbrush
Feminine Protection
BEVERAGE
Energy Drink
Ready ToDrink Tea
Soft Drink
Tonic FoodDrink
Fruit Juice
PackagedWater
Tea Bag
HOUSEHOLD CARE
Fabric Softener
Laundry Product
Household Insec. Aerosol
Dishwashing Liquid
Household Cleaners
Household Insec. Coil
Tissue
FOOD
Gums
Biscuits
MSG-Bouillon
Instant Noodles
Cooking Oil
Sauces
Snack
MILK BASEDPRODUCTS
Milk Powder
SweetenedCondensed Milk
Ready ToDrink Milk
CIG
Cigarette
28
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Value consumption increases across super groups with a positive picture from Beverage products
FMCG VALUE CONTRIBUTION - 6 CITIES TT
MAT JUN09 MAT JUN10
Source: Vietnam Retail Audit Tracking, ended period Jun2010
MATLY MATTY
Value % Chg YA
Volume % Chg YA
Total FMCG 15 15
Personal care 10 3
Household care 13 5
Milk Based Product 6 8
Food 11 11
Beverage (excluding Beer) 29 22
Cigarette 16 8
29
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Beverage and Food categories are dominating both importance and growth
Top 10 biggest categories – Value % Share Top 10 fastest growing category - value % Chg vs. YAMATTY
TOP FASTEST GROWING CATEGORIES
Source: Nielsen VN Retail Audit Tracking, ended period Jun2010
30
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3. Vietnamese Consumer Insights
•Most of consumers (64%) are aware of price changes and are looking for more promotions while rarely looking for new things. s
•“Vietnamese people use Vietnamese products” campaign might have created an advantage for local products to firm up better share position
31
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Dynamic changes in Vietnam are afoot. After ‘premium trade-up’ & ‘promotional-junkies’, a ‘purchase Vietnamese’ trend is expected.
5
23
36
39
51
57
54
Not buy some 'non-essentials'
Trade down tocheaper products
Purchase more onpromotion
Buy bigger packsto save money
Buy smaller packsof the same
products
Change channel tosave money
Trade up to morepremium/indulgent
products
Do you anticipate that Vietnamese consumers will change their purchasing behavior next 6 to 12 months?
16
16
21
24
27
48
31
Trade up to morepremium/indulgent
products
Change channel tosave money
Buy less / smallerpacks of the same
products
Buy bigger packsto save money
Not buy some 'non-essentials'
Trade down tocheaper products
Purchase more onpromotion
2009 2nd half2009 1st half
22
22
22
37
41
49
44
Trade down tocheaper products
Trade up to morepremium/indulgent
products
Not buy some 'non-essentials'
Change channel tosave money
Purchase more onpromotion
Buy bigger packsto save money
Purchase morelocal/ Vietnamese
brands
2010 1st half
Source: Nielsen Business Barometer
32
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As already evidenced by strong share gains amongst some Vietnamese brands
Source: Nielsen VN Retail Audit –latest period Jun10
+7.3 pts +6 pts
Dr. Thanh
(Ready to Drink Tea)
Vinamilk Fresh Milk
(Liquid Milk)
+3 pts
Diana Sieu Tham
(Napkin)
Vinh Hao
(Carbonate Soft drink)
+2.4 pts
Fastest Volume % Share Gain – 6 cities-TT
(+/- Volume % Share Change YA – MATTY)
33
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PROMOTIONSENSITIVITY
PRICEAWARENESS ADOPTION
11% Changes stores based on best promotion offered
55% Seldom change stores but when shopping, actively searching for promotions
Source: Nielsen Shopper Trend 2010
64% Vietnamese consumer are aware of price changes
20% seldom try new things
65% try new brands/things but usually stick to my favorite
Shopping Dynamics
Highly aware of price, Vietnamese consumers remain fairly loyal to their favorite brand, but are attracted to in-store promotions & new items.
34
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• The role of advertising is more critical. Hanoians also claim to respond better to in store promotions and after sales service
• Hanoian strongly prefer one type of promotion: PRICE
• Hard to build initial trial (1 in 10 people from HN are early adopters)
HanoiHCMC
Promotion
Price
Adoption
• Saigonese consumer favor multiple promotion types
• Price promotions alone won’t appeal to Saigonese
• Saigonese are early adopters (1 in 5 people from HCMC are early adopters
Source: Nielsen HCMC & HN consumer differences Jun09
However consumers behave differently in different regions
35
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4. Emerging Trends
36
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Emerging trends in summary
Health &Beauty
Getting sophisticated
Getting Connected
Big Pack(1)
Refill(2)
PrivateLabel
(3)
Convenience(4)
37
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Smart shopping:(1) Consumers are upsizing
Do you anticipate that Vietnamese consumers will change their purchasing behavior in next 6 to 12 months?
22
22
22
37
41
49
44
Trade down tocheaper products
Trade up to morepremium/indulgent
products
Not buy some 'non-essentials'
Change channel tosave money
Purchase more onpromotion
Buy bigger packsto save money
Purchase morelocal/ Vietnamese
brands
Source: Business Barometer Wave 3 (Q2.2010), Nielsen VN Retail Audit – latest period Jun10
Fabclean>2Kg
+3% pts
Granules>300gm
+2.1% pts
Skin Cleaning >400ml
+7.4% pts
Total 6 cities_TT
+/- Volume % Share vs. YA - MATTY
38
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Smart Shopping: (2) Consumers buy more refill for money-saving purposes
Source: Nielsen VN Retail Audit, latest period Jun10
Fabric Softener
+4.8% pts DishwashingLiquid
+0.4% pts
Floor Cleaner
+4.2% pts
Total 6 cities_TT
+/- Volume % Share vs. YA - MATTY
39
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Smart Shopping:(3) Consumers’ awareness to Private Labels goes up, driven by Coop-mart and Wow
1
1
1
3
6
6
8
13
25
28
0 5 10 15 20 25 30
Fivimart (Food products)
Metro (Metro SPM, rice/dishwashing liquid/laundrydetergent,etc.)
Tarrington House (Metro)
Aro (Metro)
Casino (Big C)
Comi (Metro SPM, milk)
Metro Quality
eBon (Big C) (Food products)
Wow (Big C)
Coop Mart
% Awareness
Base: Hypers/Supers (n=1466)
Source: Shopper trend 2010
Awareness level of Private Labels
40
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0.52
0.40
0.38
Convenientto get to
Wide rangeof fresh meat
& fish
High qualityfresh food
Smart Shopping:(4) Ease of access and consumption is driving channel and product choices
Source: Nielsen Shopper Trend 2010, Nielsen VN Retail Audit –latest period Jun10
Derived Importance Ranking of Supermarket Store Attributes
Choice of place
Choice of product
Package Contribution – Ready to Drink Beverage
41
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Getting Sophisticated:At the same time, consumers show more interest in personal care by using more advanced products
Deodorant
Lotion
Hair Treatment
29% (17%)
Value % Growth (Volume % Growth)Total 6 cities_TT - MAT TY
39% (32%)
18% (17%)
Source: Nielsen VN Retail Audit, latest period Jun10
42
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Getting Sophisticated (continued):Consumers also start seeking specific product benefits
Feminine Protection
Source: Nielsen VN Retail Audit, latest period Jun10
Specific products for
maleDeodorant Shampoo
44
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
4741
37 36 3528 28 27
2419 18 15 13
8
33
VN CN ID IN PH SG TH HK MY TW AU NZ JP KO APAverage
%
Base : All respondents n=7014
Getting Connected (continued):Vietnamese consumers are the savviest on technology products
Source: Nielsen Global Omnibus study
% of respondents who spend on new technology products
Question: Once you have covered your essential living expenses, which of the following statements best describes what you do with your spare cash: I spend on
45
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Getting Connected (continued):Internet and social networks are very important for the younger generation
Source: Nielsen Omnibus April09, Nielsen Gen V Study Oct 2009
% Access Internet
41
64
HCM+HN 18-25 yearsold
46
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Getting Connected (continued):The internet could be the next media platform apart from other traditional media forms
27
7
3420
9
59
25
592
4
2
2
2
2
11
7
9
5 18
2
2
230
32
43 39
34
30
25
29 2027 30
4
34
112
114 5 2 2 7 2
36
36
0%
20%
40%
60%
80%
100%
TVC Point-of-Sale-Materials
Outdoor posters In-storebanners/posters
PrintPublications
Radio Internet Mobile Phone
Increase significantly
Increase Somewhat
Remain the same
Reduce somewhat
Reduce significantly
No spending on thischannel
Over the next 6- 12 months, how do you anticipate your company's spending on the following media channels for advertising?
Source: Nielsen Barometer Wave 3
31%T2B (increase): 47% 24% 32% 32% 6% 41% 13%
13% 11% 11% 5% 20% 2% 4% 4%
47
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Health & Beauty:Health continues to be a key concern for Vietnamese consumers
Source: Nielsen Business Barometer, Nielsen Consumer Confidence
Which of the following issues concern you in terms of the impact they may have on your business? Rank the top three issues that concern you where 1=most concern, 2=second most concern, etc...
Top 5 consumer concerns
1) Health
2) Increasing food prices
3) Increasing utility bills (gas, electricity, water…)
4) Job security
5) Increasing fuel / petrol prices
$24
15 15 14 13 16 12 12 9
1316 14 15 14 14 10 13 12 15
13
VN CN CZ HK PL RU IL HU UA BR
%
Biggest concern Second biggest concern
Major Concerns over the next 6 monthsHealth - Top 10
48
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Health & Beauty (continued):Vietnam is ranked as most concerned country when it comes to airpollution and use of pesticides
Source: Nielsen 2H 2009 Global Omnibus Study
77 7664 58 60
73 7081
6857 51
6552
66
21 2234 39 37
24 2715
2839 45
3144
30
0
20
40
60
80
100
ID PH GR HK MY CO VE VN CL VN SG TH RO MX
% of global consumers concerned about air pollution
5947 44
62
40 3651
41 35 30
3243 43
23
43 4631
40 46 51
0
20
40
60
80
100
GR FR TH VN VE PH LT MX AT ES
Very concerned Quite concerned
% of global consumers concerned about use of pesticides
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Health & Beauty (continued):Vietnamese consumers seek natural and safe products
Toilet Cleaner:Vim killing germs
Fabcon:Comfort Antibac
Bar soap:Lifebuoy killing bacteria
Green Tea Ingredients
Natural Products
L'occitane
Instant noodles:Omachi made by potato
Instant noodles:Tien Vua good for health
Cooking Oil:De Nhat good for health
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
2939
45
5363 67
Top 3 Box Priority
Control/reduce carbon-dioxide emission Environmentally- friendly packaging
Energy saving Education
Charity Consumer health benefits
Z
Does your company currently have any initiatives relating to social responsibilities such as: the environment, local charities, education...?
Which social responsibilities initiatives does your company prioritize?
89%
11%
Yes No
Health & Beauty (continued): Most companies’ corporate social responsibility programs are geared towards supporting consumer health.
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Vietnam Topline1st
Half 2009
2nd
Half 2009
1st
Half 2010
2nd
Half 2010
Nielsen Market Index Volume*
Nielsen Market Index Value**
MFR outlook of the market
MFR outlook of own industry
Advertising Spend
Hiring levels
Modern Trade importance
Nielsen Vietnam Consumer
Confidence^
* Nielsen Market Index Volume defined as unit change vs. YAGO** Nielsen Market Index Value defined as dollar change vs. YAGO^ Nielsen Global Consumer Confidence measure is from 10/08 & is benchmarked vs. the Global Confidence avg. of 84
Very Strong Growth: >= +5%
Growth: between +1 and plus 4% Neutral: between -1 and +1%
Negative: between -1% and -4%
Very Negative: <= -4%
Volume growth records high & stable levels
Value growth remains high
Manufacturers continue to see Vietnam as a growing market
Own industry will also experience growth
MT contribution expected to increase in 2010
Most manufacturer’s plan to significantly increase their hiring levels
Consumer confidence has bounced back to top 3 countries
Advertising levels are expected to pick up
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Key observations• Despite senior business leaders believing Vietnam has now stabilized,
growth is definitely still there to capture • Your competitors & peers are gearing up to attack
– Adding skilled people to their workforce– Using integrated marketing campaigns which utilizes both traditional & newer media
platforms– Looking beyond the more saturated markets of HCMC & Hanoi, and instead now see
the next frontier of growth as Rural Vietnam– Investing and focusing more on Modern Trade outlets
• However, timely reaction to current trends is also vital for success – Consumers now purchase more Vietnamese products
– Need to defend or need to leverage– Effectively control ever-increasing costs by offering innovative & relevant value to
consumers
• To enjoy both growth & to capture market share, aggressive & informed decisions need to be made now
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Page 53
Foods for thought…
Growth is still on the radar for Vietnam with a number of areas to keep in mind:
• The younger generation will become an increasingly important group: wealthier, more sophisticated and responding to different marketing / promotional strategies
• FMCG growth is still positive and fueled by rebounding consumer and business leaders confidence
• The development of modern trade will influence the way people shop and create new category opportunities
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Page 54
Foods for thought…Targeted trade strategies are needed in Vietnam• Modern trade and specific convenience management
systems will need fast development• Maximizing portfolio efficiency in store will be key to
succeed in the still dominant traditional trade channel• Rural strategies must be part of long term planning in
Vietnam Consumers’ needs constantly evolve and one strategy does not fit all. Marketing strategies will need to stand out as consumers arebombarded with new messages• Understand package trends and meet demands of quality and
price conscious consumers• Invest in NDP to propose sophistication and convenience in
products benefits• Know the segments in your consumer base (geographies, age…)
55
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Thank you