TNS CanCham 2012 Crystal Ball Consumer Forecast 07Feb2012

7/31/2019 TNS CanCham 2012 Crystal Ball Consumer Forecast 07Feb2012

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AMCHAM October 7, 2011

PURCHASING POWER& PRIORITY SPENDING


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Agenda

Evolution of wealthConsumer confidence & inflation

Branding trends

Spending priorities

Summary

Ralf MatthaesRegional Managing Director


3/23

The Evolution of Viet-Wealth

1988

1998

2005

2008

2011-2012

2009


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33

29

21

10

5

3 A

B

C

D

E

F

1999

Evolution Declared Monthly Household income - Urban

Source: TNS VietC cle 2011 Hanoi HCMC Danan Can Tho onl

A = 13.5 15.0

B = 6.5 13.5

C = 4.5 6.5

D = 3.0 4.5

E = 2.0 3.0

F = less than 2.0

VND Million

A+ = 15.0 Plus

21

46

9

3

9

10

1

A+

A

C

D

E

F

2011

B

Upper middle class in Urban Vietnam now constitutes 65% of pop

But only makes up about 30% of total population


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Gross National Income - 2009-2010 (USD)

39,000

14,800

8,086

3,994 3,737 3,123 2,000

Singapore Malaysia Thailand Indonesia Philippines Vietnam Cambodia

National Purchase Power Parody (USD)

Due to constant inflationary pressure Vietnam

lags behind in terms of PPP in South Asia

Vietnam has surpassed

Indonesia and should

surpass the Philippinesin the next 5 years

Source: TNS South Asia network


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Consumer Confidence 2010-2011


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2011 Outlook - Consumer Confidence

Consumer confidence has seen a steady increasesince 2010 to 83 points

Source: TNS Consumer Confidence Index

2008 2009 201001/2011 09/2011

89

64

7876

0

20

40

60

80

100

1 2 3 4 5

83

7978

64

89


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Q: In the next 12 months would you think that the following will be better, the same or worse than they are now?

Consumer overview of Vietnam's next 12 months

Vietnamese consumer seem fairly buoyant with regards to Vietnams

overall outlook for the next 12 months, except for cost of living / dong

devaluation and pollution, which was consistent with 2009 / 2010.

Source: TNS VietCycle 2011 Urban only


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will you spend more - less - the same in 2012


Almost 50% note spending less / month to the end of the year than

they spent in the 1st 7 months, with only 7% spending more.

The poor will spend more, as inflation rips into their wallets


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Total Expenditure & Savings HCMC & Hanoi

Source: TNS VietCycle 1999-2011

83

86

88

91

81

84

81

17

14

12

9

19

16

19

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1999

2001

2006

2008

2009

2010

2011

Total expenditure Saving

Savings

Until the global economic meltdown, Vietnamese savings

were dropping year on year. Now caution is the word.

Total expenditure


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Branding trends


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Key urban FMCG trends 2012 - 2015

I worry about my health more than ever before - 89%

I worry more today about food safety95%

HEALTH

I prefer to beverages I can drink

from the container - 72%

I prepare food the require little

preparation - 63% agreeCONVENIENCE

I buy products of good quality, even if more expensive90%

Higher price products means higher quality 55%

SOPHISTICATION

Source: Kantar Worldpanel


13/23

Discounted priceFree gift with

purchaseSweepstake/Lucky

draw prizes

Get free

product/samplewith multiple

purchase

Monetary gift

Most preferred promotion (%)


As the economy slows and inflation soar, discounted

prices are the preferred promotions


14/23

The origin of brands

The country of origin ismore important than the

brand nameVietnamese brands areas good as international

brandsI prefer local Vietnamese

brands


Vietnamese brands have caught up to Internationalbrands in the minds and wallets of consumers


15/23

Vietnamese are buying much less than in the pastdue to inflation and a slowing economy

*Biggest categories: 24food and non-food categories with >60% penetration in first 6 months of the year = 60% of FMCG total market valueSource: Kantar Worldpanel Vietnam Household Panel Urban 4 key cities (HCMC, HANOI, DANANG, CANTHO)

CONSUMTION TRENDS AMONG HIGHEST PENETRATION

CATEGORIES*

15.8

14.2

8.9

9.2

18.8

1.4 SEM 1'10 vs SEM 1'09

SEM 1'11 vs SEM 1'10

AVG. VALUEGROWTH

AVG. PRICE

GROWTH

AVG.VOLUMEGR

OWTH

Urban Consumption of FMCG

2010

2010

2010

2011

2011

2011


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Spending priorities

Will b di h l i


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Education

Health care products / services

Food & beverages products

Household utilities

House hold care products

Personal care products

Transportation

Communications

Entertainment & dining out

Personal equipment

Home appliances

Will you be spending more, the same or less in 2012

Source: TNS VietCycle 2011 Hanoi / HCMCIronically spend on many sectors seems to show growth


18/23

Consumers top 10 wish list for 2012!

Digital Camera

24%Car

22%

Karaoke system

21%LCD / Plasma TV

20%PC / Desktop

14%Smart TV

14%Refrigerator

12%

Source: TNS VietCycle 2011. Q46 Which of the following are 3 items you would most like to own that you do not own

yet? Base: n= 2,000 (Total)

Air-conditioner

33%Laptop

33%

Washing machine

32%

Must haves for 2012


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Summary


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2010 vs 2011 year in review & 2012 forecast

GDP

Inflation

Trade deficit

Exports

Imports

FDI

Retail spend*

Ad spend

FMCG Value

FMCG Volume

Tourism

Consumer confidenceSource: GSO / TNS / Kantar Media* VN Retail Association not sure if accurate

Measure

6.78%

11.75%

US$12.4 B

US$71.6 B

US$84.0 B

US$18.6 B

US$78.0 B

US$726 M

21%growth

9%

5.0 M

78 index

2010

5.89%

18.13%

US$9.6 B

US$96.4 B

US$105.8 B

US$10.9 B

US$95.0B

US$760 M

16%growth

1.4%

6.0 M

83 index

2011 Performance

6.0%

10%

US$12-14 B

US$99 B

US$115 B

US$14B

?

US$800 M

14% growth

1% growth

6.5 M

76 index

2012 est.

I t t t iti f 2012


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Investment opportunities for 2012Infrastructure

Better services for telecom/ electricity/ water/ Cable TV/ Internet / Utilities

Education

High schools, vocational training and University degrees in-country

Healthcare

Ethical drugs, maternal care, health & well being

FMCG

Food & beverage / personal care and household care

Convenience & health platform / mass market / rural Vietnam price points

Electronics

Laptops, A/C, Washing machines, digital cameras

TransportCars


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Crystal Ball 2012

Key word is caution - wait & see

Consumer spend will be down

Value for money is key as is quality & USP

Major reforms required;

Inflation / devaluation Finance system

SoE performance FDI appeal


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TNS CanCham 2012 Crystal Ball Consumer Forecast 07Feb2012