Confidential & Proprietary • Copyright © 2008 The Nielsen … · 2019-05-29 · Vietnam – Boom or Doom in 2009? March 2009 Page 14 Confidential & Proprietary Copyright © 2008

Confidential & Proprietary • Copyright © 2008 The Nielsen Company

Confidential & Proprietary • Copyright © 2008 The Nielsen Company

Boom or Doom in Vietnam in 2009?

March 2009

Vietnam – Boom or Doom in 2009? Page 3 March 2009 Confidential & Proprietary

Copyright © 2008 The Nielsen Company

Agenda

• Setting the scene and Vietnam outlook

• Consumer behavior over Tet 2009

• Vietnamese consumer concerns and thoughts on the economy. How are consumers reacting?

• How could Vietnamese consumer behavior change in the 6 months

• Key findings & implications

• Driving growth in 2009



Research design

• Nielsen Omnibus – Urban (HCM & HN): Monthly – Urban & Rural: Quarterly

– Sample Size: 300 – HCM 150, HN 150

– Fieldwork: 15 – 24 Jan, 2009

–Methodology – Face to face recruitment & interview – Pen and paper administration

– Criteria – Male and female (50/50%) – Aged 18 to 50 – All SEC/income levels

• Nielsen Retail Audit up to December 2008



Setting the scene

• Vietnam has one of the fastestexpanding economies in the world (second only to China) with growth averaging 7.5 % a year since 2000.

– November 2008 – 9 th most confident consumers globally (declined from 7 th ranked in 1 st half 2008)

– Total FMCG (6 cities) – + 20% value growth in Dec 08 vs year ago (+35% June to Oct 2008) – + 4% volume growth in Dec 08 vs year ago

– 2008 AT Kearney report – Vietnam most attractive retail market (ahead of India, Russia, China & Egypt)



Vietnam’s GDP growth has been strong

7.3 7.8

8.4 8.2 8.5

6.2 6.5

0

1

2

3

4

5

6

7

8

9

2003 2004 2005 2006 2007 2008 2009

Vietnam Real GDP Growth % 2003 2008

Source: 2003 2008 figures from Asia Development Bank

•Real GDP growth %

Vietnamese Government Forecast, March 5, 2009



In 2009 Vietnam GDP growth will slow to…

• GDP growth fell in 2008: 6.2% vs. 8.5% in 2007

• IMF predicts Vietnam’s GDP growth in 2009 will slow to 5%, whilst the Vietnamese Government predicts between 6.57.5% (By comparison, IMF predicts world growth to slow to 0.5% in 2009)

• Vietnamese Government preparing a stimulus package up to $6billion which is equal to 39.5% of 2009 GDP. Source: IMF



Vietnam inflation peaked in August and has since slowed

14.8

24.2

27.9 28.3 27.0 26.8

25.2

21.4 19.4

15.7 14.1

8.5

27.6

17.5 19.9

0

5

10

15

20

25

30

2007 total

Jan08

February

March April May June July

August

September

October

November

December

Jan09

February

March

Vietnam CPI YOY 2007 February 2009

Source: IMF, ADB and Bloomberg News



7.5 8.5

23

11

7

0

5

10

15

20

25

2006 2007 2008 2009 2010

Source: 20062007 data from IMF and CIEC: 20082010 IMA Asia Brief December 2008

Inflation returning to manageable levels in 2009 Vietnam CPI YOY % 20062010

*2009, 2010 forecasts

May be reforecast lower in coming days (March)



Vietnam Outlook

• Vietnam’s attractiveness is high & growth opportunities are abundant

• Vietnam’s potential to develop and grow remains

•Half the population is under 30 years old = lower cost of labor + high consumption demand will help fuel growth

• Tourism grew in 2008 4.3mil tourists (up 100,000 v. 2007); $3.5bil revenue (up 7% YoY)

• Trade and budget deficits are high but expected to drop in 2009



Consumer behavior over Tet 2009



Average spend over Tet in HCM around VND 3.5 mil…but almost VND 5 million in Hanoi.

Q23, Q24: How much do you usually spend on Tet holiday for household usage, for gifts? Base: All respondents (n= 300)

Average spending at Tet VND 000s (Household usage and gifts)

ABCSig @95%CL

850 813 959

2,950 2,690

3,720

0.00 Household Gifts

Total (n= 300) HCM (A) n= 150 HN (B) n= 150

Nielsen Vietnam Omnibus 2009



Almost 50% spent less this Tet compared to previous years

Q17: Compared to previous years, how much money are you spending in the lead up to this Tet holiday? Base: All respondents (n= 300)

ABCSig @95%CL

4 3

45 41 54

43 45 36

9 9 8 1 1 1

0%

20%

40%

60%

80%

100%


Much less A little less Same A little more Much more

Spending at Tet (Household usage and gifts)




Why did consumers spend less this Tet? Consumers claim things are more expensive and they have less money to spend.

74

39

21

20

13

13

Things are now more expensive

My family has less money to spend

I must save more, be more cautious in spending

Everyone is cutting down their expenses

I'm afraid the economy will be worse next year

I have no/ little salary increase this year %

Total (n= 148)

Q18: What are the main reasons you are spending less in the lead up to this Tet holiday compared to previous years? Base: Those spending less (n= 148)

71

35

22

21

18

19 %

HCM (A) n= 66

82

49

18

18

2

%

HN (B) n= 82

Reasons for spending less this Tet




One third of households spent less on key FMCG categories…except Food.

Q21: On this Tet, is the amount you purchase less, the same or more than you did on Tet holiday 1 year ago for household usage? For gifts? Base: All respondents (n= 300) HCM= HN= 150

Changes in Spending at Tet

34

31

33

30

19

32

11

53

59

57

56

69

60

75

12

9

9

14

11

7

5

1

1

1

1

1

10

Less than 1 year ago Same amount as 1 year ago More than 1 year ago Don't know

23

20

18

2

8

6

13

38

52

39

7

10

24

19

10

7

6

3

1

4

9

30

21

37

87

80

66

60

Beer

Confectionery

Beverage

Clothing

Food

Tobacco

Others

Household Gifts




Leading up to Tet 2009 consumers spent less on eating out, going to bars/coffee shops and entertaining at home

Q35: How you have spent on each of the following entertainment activities in the lead up to Tet holiday, compared to previous years? Base: All respondents (n= 300) HCM= HN= 150

Changing in spending

2

24

9

27

83

7

30

15

3

45

15

62

30

55

39

22

2

28

15

20

51

6

1

1

1

2

7

1

Don't usually spend on this Did not spend on it this year I spent less I spent the same amount I spent more

Travelling overseas

Travelling within Vietnam

Hold parties/ eating at home

Going to pubs/bars/coffee shops

Going to movies/ concerts

Eating out




Consumers claimed to spend less on all channels, particularly Modern trade & wet markets over Tet

Q36: How are you spending on each of the following retail channels in the lead up to Tet holiday, compared to previous years? Base: All respondents (n 300) HCM= HN= 150

Spending at Retail channels

38

35

23

57

58

63

5

7

14

Spending less on this channel Spending the same on this channel Spending more on this channel

Total HCM HN

36

34

28

60

58

57

5

8

15

Modern trade

Wet market

Grocery stores

46

38

9

48

59

81

6

3

11





Overall 80% of consumers said they did not change pack sizes for Tet given tighter economy.

Q37: Overall have you changed the size of the packs you have been purchasing in the lead up to Tet, compared to previous years? Base: All respondents (n= 300) HCM= HN= 150

80%

18%

2%

85%

14% 1%

No, I have not changed the size of the packs Yes, I tend to buy smaller packs Yes, I tend to buy larger packs

66%

29%

5%

Total HN HCM

ABCSig @95%CL





Consumers are paying more attention to price than before…40% in HCM & 28% in Hanoi

Q39: Overall what would you say about your consciousness towards the price of goods in the lead up to Tet compared to previous years? Base: All respondents (n= 300) HCM= HN= 150

51%

37%

12%

44%

40%

16%

Always conscious of price Paying more attention to price than before Just buy what I need, regardless of price

70%

28%

2%

Total HCM HN

ABCSig @95%CL





Vietnamese consumer concerns and thoughts on the economy



It’s not doom and gloom in Vietnam. 45% say Vietnam’s economy is worse than 6 months ago. Only 55% say world economy is worse.

Q30, Q31: How would you rate the Vietnamese economy/ other major economies around the world, compared to 6 months ago? Base: All respondents (n= 300)

ABCSig @95%CL

10 13 2

35 30 48

27 31 18

25 23 33

3 4

0%

20%

40%

60%

80%

100%


A lot worse A little worse Same A little better Don't know

Vietnam’s economy

18 14

29

37 37

37

24 28

14

15 14 20

5 7 0

0%

20%

40%

60%

80%

100%


The world’s economy




Consumers believe Global Economic Crisis is driving inflation and unemployment in Vietnam

Q32, Q33, Q34: Impact of other economies on Vietnam Base: Those saying Vietnam’s economy is impacted (n= 247)

77%

12%

11%

Yes No Don't know

Impact on Vietnam Nature of impact

2

11

86

Don't know Positive Negative

Reasons for Negative evaluation

Most important drivers (overall) % Inflation 51 Unemployment 46 Causing crisis to Vietnam's economy 18 Causing Vietnam's export to decline 14 Causing currency to devalue 14




Food price increases is the biggest concern for consumers

Q40: To what extent are you concerned about the following? Base: All respondents (n= 300) HCM= HN= 150

Consumers’ General Concerns

1

3

1

1

16

8

8

10

12

11

10

8

6

52

54

47

42

39

37

38

38

33

29

38

46

46

49

51

53

54

61

Global economy

Saving

Low increase in salary

How to take care of my children

How to develop own business

Future of my children

Price increase in petrol

Pollution

Price increase in daily food

Not concerned at all Somewhat not concerned Neutral Somewhat concerned Very concerned




How are consumers reacting?

How could Vietnamese consumer behaviour change in the 6 months



Overall FMCG growth rate has slowed since mid 2008, but volume is still up by 4.5% v. 2007 and value growth is above 20% YOY Total Defined FMCG Volume & Value Growth : Vietnam Total 6 Cities

Nielsen Vietnam Retail Audit 2007 2008

27.0

11.1

30.7

14.8

20.1 17.9

13.4 14.2 13.2

11.7

5.6 4.1

38.7

24.2

43.5

28

32.6 33.8

36.2 38.1

35.1 33.5

26.2

20.6

JAN07 FEB07 MAR07 APR07 MAY07 JUN07 JUL07 AUG07 SEP07 OCT07 NOV07 DEC07 JAN08 FEB08 MAR08 APR08 MAY08 JUN08 JUL08 AUG08 SEP08 OCT08 NOV08 DEC08

Volume Sales Volume Growth v.s YA Value Growth v.s YA



FMCG Department Volume % Growth vs YA (Vietnam Top 6 cities)

Beverages growth has remained strong whereas growth for other departments has tapered

Nielsen Vietnam Retail Audit 2008

21.7

8.5

31.3

13.0

18.6

14.5

5.7 6.7 7.8

3.8

4.8 4.1

10.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

JAN08 FEB08 MAR08 APR08 MAY08 JUN08 JUL08 AUG08 SEP08 OCT08 NOV08 DEC08

10.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

FMCG Personal Care Household Care Food Beverage Cigarette



Fast Food and CSDs potentially the hardest hit in the next 6 months amongst Food categories, according to consumers

Q43: Please tell us about your spending behavior in the next 6 months, regarding the following categories? Base: All respondents (n= 300)

Total spending

1

4

1

9

12

18

5

9

32

46

42

21

78

50

36

31

67

11

9

4

5

6

1

2

Do not spend money on this Will spend significantly less than usual Will spend a little less than usual Will spend the same Will spend a little more than usual Will spend significantly more than usual

Vegetables

Milk products

Carbonated soft drinks

Fast foods

Foods and drinks (in general)

60%

58%

41%

10%

26%




All nonfood categories will be impacted in next 6 months according to consumers


Total spending

17

7

7

11

24

23

25

12

47

33

48

40

54

36

23

19

23

29

6

3

3

4

5

1

Do not spend money on this Will spend significantly less than usual

Will spend a little less than usual Will spend the same

Will spend a little more than usual Will spend significantly more than usual

Clothes

Facial care

Electronic items

Household items

Shopping (in general)

66%

57%

71%

65%

58%




Vietnamese consumers also expecting to spend less on utilities in next 6 months


Total spending

2

11

5

6

5

48

44

49

41

37

49

41

47

4

3

4

41




Phone bills

Fuel

Electricity

Utility (in general)

49%

55%

46%

59%




Decrease in spending on entertainment likely in next 6 months


Total spending

3

7

32

81

27

2

17

38

32

13

48

28

29

37

24

4

20

48

50

17

10

1

4

20

1

1

2

2

4




Newspapers/ magazines

Going out (clubbing/ karaoke/...)

Cinema

Traveling (overseas)

Traveling (domestic)

Entertainment (in general)

56%

68%

76%

46%

75%

17%




Key findings • Vietnam’s Economic Impact on FMCG

– Overall Vietnamese consumers are more confident compared to other countries. – 37% of consumers said they will NOT spend less this year as most are concerned with price increases.

– FMCG growth rates have slowed slightly…but are still stronger relative to most other countries

• More than half intend to spend less in next 6 months on Fast Food, CSD and nonfood categories

• Majority think global economic crisis is having a negative impact on Vietnam…but not all consumers! – Particularly inflation & unemployment

• Biggest concern for consumers is the price increases for daily food

• Consumers intend to spend less on eating out & going to bars / coffee shops

• Overall Vietnamese consumers more price conscious and understandably more cautious…particularly for non essential items… but they are still positive!



Warren Buffet said “By year end, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.”

But… he wasn’t talking about Vietnam!

• Whilst Vietnam is not immune to the global economic and financial woes, we don’t know how or if Vietnam will be hurt

• Vietnam has been recognized with Full Market Economy Status by Australia and New Zealand before the 2009 March ASEAN summit

• Many growth opportunities exist in Vietnam TODAY



Driving growth and market share in 2009

• Significant growth opportunities remain in Vietnam for most FMCG categories

• Companies who continue to invest and innovate will secure a strong long term future when the economy improves

• Now is a time to build brands and consumer loyalty. Cutting advertising and promotion spending will dilute your brand equity. In a developing market like Vietnam think long term, not short term

• During tougher economic times it is critical to offer value to consumers – remind them why your brand should be part of their household repertoire

• Many high growth opportunities exist in Vietnam – evaluate your current distribution coverage to identify new channels or geographies to drive growth

• Focus on big wins – rationalise your range to maintain a focused offer to best meet the needs of each key consumer segment

• Continue to invest to secure a strong long term position for your brands.


Copyright © 2008 The Nielsen Company Confidential & Proprietary • Copyright © 2007 The Nielsen Company

Thank you

Documents

Confidential & Proprietary • Copyright © 2008 The Nielsen … · 2019-05-29 · Vietnam – Boom or Doom in 2009? March 2009 Page 14 Confidential & Proprietary Copyright © 2008