FINAL_Nielsen Grocery Report 2012 -Dec 11

7/29/2019 FINAL_Nielsen Grocery Report 2012 -Dec 11

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Copyright 2012 The Nielsen Company. Confidential and proprietary.

Vietnam Grocery report 2012


GROCERY

REPORTVietnam2012


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Market Channels Shoppers

MACRO-ECONOMIC

OUTLOOK|

FMCGOVERVIEW

RETAIL NOW&

THE FUTURE

BELT BUCKLING|

CONNECTEDCONSUMERS

AGENDA


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MARKETMacro-economicsOutlook

Will Vietnam GDP and CPI reachtheir 2012 targets?

Is the Vietnam retail industry stillattractive?

FMCG Overview


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ACTUAL Q312ACTUAL Q312

GDP

4.7%

GDP

4.7%

CPI

7.%

CPI

7.%

GOVERNMENTPLAN 2012

GOVERNMENTPLAN 2012

GDP 6-

6.5%

GDP 6-

6.5%

CPI

10%

CPI

10%

A very tough 2012 with only slightly positive signs appearing inQ312, but still below expectations for the year.

CPI YOY

Source: Vietnam General Statistics Office


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14%

6%

5%

50%

GasVND/12kg tank

Mogas 92VND/litre

which is still fragile under pressure from the recent upwardtrend in fuel and utilities.

Growth rate01/09/12 vs 01/01/12

Source: xangdau.net &htt ://www. etrolimex.com.vn/


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1st half 2012

1st half 2011

LABOUR STRUCTURE51.6 mil employees

GDP STRUCTURE1,252,577 bil.VND

2.81%

3.81%

5.57% Value growth rate vs. YA

Service continues to drive the growth of the economy, particularlybeing led by the Trade sector.



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NO. COMPANIES DISSOLVED OR CEASEDJan/2012-Apr/12

Total volume: 17.735/ 647.627 companies Change vs LY +9.5%

RETAIL-SERVICES SALESJan/2012-Aug/2012

Total value: 1,517,721 bil.VND Change vs LY: +17.9%

Growth is still there, but many companies are having problems.



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1

6

14

23

2008

2010

2011

2009

VIET NAMRank

Viet Nam retail drops out of top 30 countries of retail attractivenessby A.T Kearney. Inflation, high real estate price & interest and

business procedure are still big concerns.

Source: A.T. Kearney

X 2012


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+467%

48%

3%2%

47%

68%20%

5%7%

Manufacturing& Processing

Real estate

Wholesale, Retail sale & Repairment

Other areas

01/01/11-20/08/11

01/01/12-20/08/12

Value growth rate vs. LY

However, retail sector is still attractive to foreign investors despitetotal FDI decreases.

Total FDI

+107%

+25%

-11%

-86%

NEW FOREIGN DIRECT INVESTMENTFirst 8 months 2012 vs 2011

Source: Foreign Investment Agency -Ministr of lannin and investment


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Vietnam Grocery report 2012Copyright 2012 The Nielsen Company. Confidential and proprietary.

Macro-economicOverview

After sky rocketing inflation in 2011,

how is Vietnam FMCG market

doing?

MARKETMacro-economicsOutlook

FMCG Overview


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FMCG volume sales growth bounces back strongest for Beverage & Milk-base

Consumer confidence is still below 100

Cooling CCI rests stable at low level

FMCG volume growth trend resumes in light of cooling CPI thoughconsumers are still concerned.

Source: Vietnam GSO and Nielsen ConsumerConfidence Surve


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FMCG MARKET DYNAMICS

REGIONAL SUMMARY Q3, 2012

Vietnam is still the fastest growing FMCG market.

Source: Nielsen Growth reporter Q3, 2012


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VALUE & VOLUME % CHANGE YAMAT JUL12

23%11%FMCG (Inc. Beer)

15%-1 %Household Care

21%6 %

Milk Based Product

Personal Care

19%3%Food (excl Milk Base)

28 %15 %

Beverage (Inc. Beer)

18%7 %

Cigarette

18%4 %

Value

Volume

Source: Nielsen Retail Audit

Across most categories, particularly beverages.


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Half categories havemedium volume growth of5-10%; while 15% showhigher growth of >10%

Price hike around 10% for

most categories except fordishwashing liquid, gum,snack, milk powder,shampoo and biscuitwhose price hike >15%

.

(YTD Jun12 vs. YA)

Most categories pose volume growth of 5-10% with an exceptionto beverages, Baby Diaper and RTDM.



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TOP 10 MANUFACTURERS IN FMCG 6 CITIES TT VALUE % SHARE

TOP 10 CATEGORIES IN FMCG 6 CITIES TT VALUE % SHARE

The biggest categories are Beer, Cigarette, Milk and Beveragewhich benefit the dominant positions of the players in such fields.



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Increasing number of new launches in Valuesegment

New of new brands declines starting from early 2011


Manufacturers more reluctant to introduce new brands and mostof new brand launches are in Value pricing segment.


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0

5

10

15

20

25

30

35

40

45

50

Sauce

Fem

_Care

Cigare

tte

Bou

illon-Msg

MilkPow

der

Bab

yDiaper

Fru

itJu

ice

S

oftDrin

k

Ins

tan

tNoo

dle

To

othbrus

h

Snac

k

Persona

lWas

h

Beer

Energy

Drin

k

Dishwas

hLiqu

id

Tissue

S

hampoo

Biscu

its

&Pie

RTDTea

Gums

Fa

cialCare

HHC

leansers

De

odoran

ts

Fac

ialTissue

Body

Lo

tion

To

othpas

te

Mou

thWas

h

Fa

bric

So

ftener

Insect

_Aeroso

l

Ha

irCo

nditioner

Con

den

se

dMilk

Pac

kage

dWa

ter

Bab

yCerea

l

Laun

dryD

etergen

t

RTDMilk

Co

oking

Oil

Insec

t_Co

il

PREMIUM SEGMENT CONTRIBUTION CHANGE

YTD JUL 12 VS. YA

YTDLY YTDTY

Price segmentation based on price index at 6 Cities, YTDJul11[>120 Premium] [100-120 HiMid] [80-100 LowMid] [


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-3.0%

-3.0%

-4.0%

6.5%

3.4%

2.6%Biscuits

CSD

Shampoo

Consumers tend to trade up with reduction in price gap of Premium and

Mainstream products. Innovation is a contributor too

Price Gap ChangePremium vs. Mainstream Premium Volume Change Driven byPrice Gap Reduction

Source: Pricing Analytics Study, Vietnam 2011

Lower price gap between Premium and Mainstream contributes tothe growth of Premium.


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The Now The Future

How fast is modern trade growing?

How is traditional trade trying to

compete with modern trade?

What are modern trade retailersdoing to attract and retainconsumers?

CHANNELS


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85 94 96 89 57 63 49 22 6 46 44

RETAIL STORE DENSITY ANALYSIS(Number of stores per million population)

Modern Trade Contribution 2011

295 304

514

849

209162

136

9 638

65

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

-

100

200

300

400

500

600

700

800

900

1,000

HK

Singapore

Taiw

an

Korea

Malay

sia

China

Thaila

nd

Vietnam

India

Philippin

es

Indone

sia

Grocery stores

Modern trade

Source: Nielsen Retail Census

Traditional Trade dominates in SEA but Modern Retailing isexpanding its foot print. Vietnam has a big room to grow in terms

of MT store density.


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TRADITIONAL TRADE MODERN TRADE

2011Total 36 Cities

943Modern tradeoutlets (+25%

vs 2010)

Store number- Nielsen Census

Value sales Contribution

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

30 Cities 4 Cities Hanoi HCM

2009

2010

2011

Traditional trade is still the dominant channel in Vietnam whileModern trade speeds up opening store especially in Hanoi.

Notes: Modern Trade contribution ( inc. Saigon Co.op, exclude Metro)Based on 36 largest urban areas in Vietnam : 4 Cities includes Haiphong, Danang,Cantho and Nhatrang

Source: Nielsen Retail Census


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Within Hanoi, both large-scale chains and independent operatorshave developed rapidly over the past year.

HCMC

Hanoi

Chains still account for bulkof the sales

38%out of 43% in HCMC 19%out of 27% in Hanoi

But, independents aregrowing in Hanoi

3%to4%to8%in 3years

Convenience stores haveyet to make a mark as

Supermarkets are still thepreferred format in 2011

Source: Nielsen Retail Census includingSaigon Co.op and Metro


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Preserving 56 markets Upgrading 110 markets

Building 153 markets

Market system development scheme 2011-2015: Investment of 2,782 bil.VND with150.6 ha on developing 319 traditionalmarket tier I

Wet market management skill training for themarkets management boards

Sales skill training for small traders in wetmarkets.

Ministry of Industry and Trade cooperate withUniversity of Economics to organize:

Attempts to invest in improving wet markets and support smalltraders.

Source: Ministry of Industry and TradeDecision012/2007/Q-BCT


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Average Frequencyof Visits per Month

Base: All Respondents (2010 n=1500, 2011 n=1500)

Ref: Q8

Consumers are movingfrom Wet Marketsto Supermarkets

However, Supermarkets are increasingly preferred.

Source: Nielsen Shopper Trends 2012


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Health &BeautyStore

15

8

Supermarket

20

19

17

14

14

11

5

3

2

1

1

Minimart

85

44

46

5

ConvenienceStore

81

32

27

13

23

41/1-31/9/2012:

12+new stores open

each month

B&B

8

6

11

59

Supermarket

Retailers of all types are implementing their expansion plans.


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Preference fromloyalty card

Increasedpromotion

frequencies

Difference withprivate label

New look byrefreshing logoand department

brandingMembership

Card, VIPCardWith specialoffers: Storedup points,specialpromotionprices

Coming withfresh,

professionaland friendlyimage

Focus on fresh &

processed foods,householdproducts, andgarments.Heavilypromoted

through priceand displays

On-goingpromotions,themed to match

holidays andspecificcategories orspecialcustomers

Supermarkets implement a wide variety of programs to buildloyalty and attract consumers.


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CHANNELS

What lessons will Vietnameseretailers learn from other

Asian countries?

What will be the channel mixin the coming years?

The Now The Future


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Modern Trade Store No. by Format in Asia-Pacific(% annual growth)

Retailers continue to expand their store base across AP with totalnumber of stores increasing by over 25,000. Convenience stores

have the fastest growth rate.

Source: Nielsen Retail and Shopper TrendAsia Pacific 2012


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CVS

Fresh Meat &Vegetables

Fresh Coffee

Smoothies

Restaurant

Hot Served Snacks

Additional Product & Service in Convenience StoresAvailable in 2011

Bakery

Books & Magazines

Media

IT & Stationary

PaymentService

Seasonal Products

Auto & Travelproducts

DirectMarketing

Home Appliances

RTE Meal


Convenience in Thailand: Innovation through Non-FMCG rangehas also attracted the shoppers.


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Thematic

promotions

SupplierFairs

WeeklyPromotions

Valentines Day

Valentines

New Year

Unilever Fair Fonterra Fair

Olay Promotion

Mothers Day School Holida

Bi weekly Shopping Calendar

Homecare Fair

Unilever Fair

Weekend Promotion


Minimarts in Indonesia: Thematic promotions and loyalty cardshave helped the Mini-Marts succeed apart from the huge store

base (+10,000 stores).

Th h i i Vi id d b


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Flashback 2005 Present Fast Forward 2022

Shopp

ingDestinatio

nMostOften

Super MarketsVery few & expensive visit once per year for

curiosity

Grocery Stores

Wholesalers

Wet Markets

All shoppers boughtdaily food in Wet

Markets

Metro

ConvenienceStores /

Mini Markets

Super

MarketsWet market is

thought to be sweptout for its dirty and

untidy image.Supermarket

increase its network,

thus increases in thefrequency

Super

Markets

Wet

Markets

Wet

Markets

Super

Markets

Convenien

ce Stores

Wholesalers

WholesalersGroceryStores

Grocery

Stores

Convenien

ce Stores

Metro MetroInnovationSeekerandPrudentSh

opper C

on

servative&

Va

lueOrientedS

hopper

The change is coming to Vietnam too, as evidenced by someshopper segments

Source: Nielsen Shopper Focus Groups inHCM,HN 2012


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12/7/2012 1st HI-WAY supercenter

SUPERMARKETSSTORE

NUMBERBY (YEAR)

Co.op Mart + 8100

20122015

Big C 2429

20122013

Lotte Mart + 2 2012

Fivimart + 3 2012

Hiway 320

20132016

31/5/2012 1st FLC Mart

ANNOUNCED EXPANSION PLANS

Notes: (+) new stores.() in total

08/12/2011 1st MINISTOP CVS

07/2012 1st C EXPRESS CVS

CVS-MINIMARTS

STORENUMBER

BY (YEAR)

Co.opFood + 30150

20122015

Satrafoods + 20 2013

TTGD Foods + 2-3 annually

Circle K > 40 2012

Shop & Go 100 2012

Family Mart + 2743

2012

Ministop + 30 2012

and backed up by the continuous retailer expansion


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Copyright 2012 The Nielsen Company. Confidential and proprietary.Vietnam Grocery report 2012


Belt Buckling

SHOPPERS

ConnectedConsumers

C Di ti di


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Concerns Discretionary spending

THE ECONOMY

(19%)

JOB SECURITY (18%)

INCREASING

UTILITY BILL

(12%)

HEALTH

(8%)

INCREASINGFOOD PRICE

(7%)

66%Saving 32%

Holiday

29%New

technol-ogies

28%New

clothes

28%Out ofhome

entertainment

27%

Homeimpro-veme

nt

| vs. 34%* | vs. 18%*

| vs. 35%*

= | vs. 30%*

| vs. 37%* | vs. 60%*

*: vs. YA | vs. APAC average

How to utilize spare cash after covering essential livingexpenses?

Source: Nielsen Global ConsumerConfidence Index Q22012 Vietnam

Consumers are tightening their belts The


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temptationsuperfluous

Core selling grocery products sales rise

Consumers are tightening their belts. The

recessionary mindset shifts consumer thinking from

Nice to Have to

Need to Have

Support on compulsory expenditures:

gasoline, gas/electricity, water, insurance, rent

Hardship continues consumers reduce shopping frequency and


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Base: All Supermarket shoppers (n = 1500)

Weekly

Every 2 weeks

0%

0%

36%

64

59%

39%

1%

1%

ten

nth

eks

ekly

2011 2012

Every month

Less often

SHOPPING FREQUENCYTOP 4 IMPACTS ON GROCERYPURCHASE CHOICE

Compared with a year ago, how much impacthas each of the following had on your choice of

Grocery Purchases in the last 12 months?

Source: Nielsen Shopper Trends Study 2012

Hardship continues, consumers reduce shopping frequency andare much impacted by price.

To adapt consumer are having more economic reactions which


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20

22

36

37

37

66

41

Buy more onPromotion

Buy more Vietnamesebrands

Buy bigger pack sizes

Buy cheaper brands

Change shoppingchannels to save money

Buy more of smallerpack sizes

Buy more of Private Labelbrands

How do you change your shopping habitsto adapt to the price increases?

%

Laundry

FabSoft

Shampoo

HairCon

Bouillon

Laundry

FabSoft

Shampoo

HairCon

Bouillon

Laundry

FabSoft

Shampoo

HairCon

Bouillon

Change in Volumeof consumption

Change in Packsize purchased

Change in Brandpurchased

More amount

Less amount

Same amount

Big pack

Small pack

Same pack

Cheaper brand

Expensive brand

Same brand

CONSUMER REACTION TOPRICE INCREASE

CHANGES IN CONSUMER BEHAVIOR ACROSSCATEGORIES IN INFLATIONARY PERIOD

Source: Consumer Omnibus Vietnam, Sept 2011

To adapt, consumer are having more economic reactions whichvary a lot (i.e. consuming same but larger packs, downgrading as

well).

To react retailers & manufacturers offer diversified promotions


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Gas reward programs

Will you bethe 1st to stepinto this game?

To react, retailers & manufacturers offer diversified promotions.

staying at home more often


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staying at home more often

Shopping patterns can emerge withconsumernesting

Out Of Home entertainment & restaurants

Home cooking

Friendliness !

TV-viewing rising

-+

+ +

CocooningIn both products and Entertainment!

Nesting consumers are heading back to their house


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47 %40 %Beer can

VALUE & VOLUME % CHANGE YAMAT JUL12

Value

Volume

Meal Maker285%

318%

1.6% vs. 1.5%

2.6% vs. 2.1%

% CHANNEL GROWTH VS. YA

Off vs. On

2011:713,416 vs. 522,394 stores


Nesting consumers are heading back to their house.

Walmart partners with manufacturers on family meals for less.


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Walmart partners with manufacturers on family meals for less.

ShopRite cooking on YouTube; monthly recipes featuring store


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Copyright 2012 The Nielsen Company. Confidential and proprietary.Vietnam Grocery report 2012Source: YouTube.com/user/ShopRiteStores

S op te coo g o ou ube; o t y ec pes eatu g sto ebrands.

In the current climate, consumers and shoppers are


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price positioning simple and innovative Promotions new value addedinitiatives

Rising interest in

Value-seeking

e u e a e, o su e s a d s oppe s a e

re-appraising their store, brand and

format choices with new lenses.

Consumer Value PriceConsumer Value = Benefits/Price

Consumers also seek value through up-trading to more premium


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Sources: RA, Price Tier market: 6 Cities TT Enh,Pack size market: 36 Cities Enh TT + RuralData ended Mar12

VOLUME SHARE OF PACK-SIZE RANGES GT URBAN

Shampoo Fabclean DWL HCL

Small Pack 500ml

VOLUME SHARE OF PRICE TIER RANGES


g p g pproducts and or buying big packs or pouch to save money.

Innovation themes


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Taste changingCigarette

Perfume FabricSoftener

Ecobags

Organicproducts

MilkBeverage

No friedInstantNoodle

LaundryLiquid

SHOPPERS


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Belt Buckling

SHOPPERS

ConnectedConsumers

hats Next: Consumers are


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Speed ofaction

Offers flexibility

Image/Buzz

hat s Next: Consumers are

more and more

Connected**End of 2012: Every 5 Vietnamese consumers, there will be 1 smartphoneand Tablet users will increase from 2% to 5%

2015: Mobile phones will overtake PCs as the most common web access

92% of Vietnamese consumers are more likely to


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59

49

59

70

12

27

47

48

53

72

11

6

Conduct product research online

Look up product information online

Read a grocery retailer's circular/flyer online

Compare prices for a grocery product online

Browse a manufacturer's website for a grocery

category

Look for deals online

Look for coupons from an online coupon site

Purchase a product online

Provide feedback about a grocery category through

social media (wrote a review, blogged)

Use a digital shopping list

Other

None of the above

Thinking about Household Grocery Shopping, which of the following activitieshave you done in the last month on any online connected device?*

y

trust recommendations from people they know*

63% aremore likely to trust

consumer opinion

posted online**

Sources: * Global Trust in advertising Q3 2011**Nielsen Global Digital Shopping Q1 2012

To stay in the game, manufacturers keep an eye on internetd ti t


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Marketing return on investment*

Advertisers spending - % Chg YTD Global Average**

Sources: *Nielsen Advanced Analytics Consulting - 2009**Nielsen Global Ad View Pulse Lite Q1 2012

advertisements.

Building demand by connecting consumers (with each other andith b d)


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Collective Buying Power Sharing Experiences

Reviews Ratings

Recommendations Referrals

Sharing Ideas

Forums, Social Q&A

50

with brand).

Change and adapt Now!


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Shopper

Cocooning

Need to Have

Connected

Home

Cooking

Home

Entertainmentproducts

Proximity

Innovation

Flexibility of

offer

Opportunities

Value-seeking

Private

Label

Price

M-commerce

E-Promo

Buzz

Speed of

actions


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Thank you!

Documents

FINAL_Nielsen Grocery Report 2012 -Dec 11