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VIETNAM RETAIL MARKET AND COMSUMER TRENDS 2020Consumer and retail trends for FMCG
in 2020.
Understand and anticipate Vietnam
retail and consumer dynamics.
Wednesday December 2nd 2020
Kantar, Worldpanel Division, in partnership with
Eurocham
Macro trends
2
There remains an elevated concern towards the current financial situation of
the HH with over 1/3 HH depriving themselves or worse…
How do you evaluate the current financial situation of your Household?
Source: Worldpanel Division | Households Panel | Urban Vietnam 4 key cities | MAT Q2’20
17
2725
29
2 7 4 5
Q4 2019 Q1 2020 Q2 2020 Q3 2020
We are not doing well at all
We need to deprive ourselves sometimes
It comes out correctly
We have enough money to allow us someextras once in a while
No financial worries, we don’t need to pay attention
% HW agree
3
When asked about the family's
financial situation in the future:
10 7 7 7
46
3341 40
41
44
45 43
3
167 9
3 yearaverage
Q1 20 Q2 20 Q3 20
Will get much worse
Will get worse
Will not change
Will improve
Will strongly improve
% Agree
Source: Worldpanel Division | Households Panel | Urban 4 key cities | Lifestyle survey
Urban 4 cities
…while the optimism towards the future financial situation also remains lower.
Consumers are still concerned about income and job security
0
10
20
30
40
50
60
70
80
Food s
afe
ty
Pandem
ic
Incom
e
Incre
asin
g c
osts
Envir
onm
ent
Pollution
Job s
ecurity
Food e
xpense
Natu
ral dis
aste
r
Oil p
rice
Dis
ease in liv
esto
ck
Q4_2019 Q3_2020
Concerns about income and job security are still higher than usual
(% HW Agree)
4
6.3
12.7
2019 YTDP9'20
5%
34%
22%
1213%
9% 11%
7%
8.6
11.4
2019 YTDP9'20
7
23
21
11
14
8 99
The second wave of outbreaks in Da Nang in late July did not show much of an impact. In the short term, FMCG growth
gradually returns to pre-COVID rate and is likely to continue to slow down in the last months of 2020 as consumers may cut
back on shopping.
FMCG landscape in the first 9 month of 2020
Urban 4 cities Rural
% FMCG value growth (compared to YA)
Source: Worldpanel Division | Households Panel | Urban 4 cities and Rural Vietnam | FMCG excl. Gift
First 9
month of
2020
First 9
month of
2020
5
Stocking behavior happens intensively due to the pandemic and slowly returning to normal
During the pandemic months, consumers tended to buy a lot in each shopping occasion to stock. Recently, the shopper's basket
size has gradually returned to normal rate.
6
2
7
5
2
13
1
11
8
3
9
1
9
7
2
FMCG index Occasion Spend/trip Average price pervolume
Volume/trip
9
1
8
4 4
11
2
9
3
6
10
1
9
4
5
FMCG index Occasion Spend/trip Average price pervolume
Volume/trip
FY 2019 YTD P9’20 Q3’20
% change of key indicators (compared to YA)Urban 4 cities Rural
Source: Worldpanel Division | Households Panel | Urban 4 cities and Rural Vietnam | FMCG excl. Gift 6
COVID-19 impact on channel choices
7
Retail environment is changing with the evolution of emerging channels* and big retail formats, which is more apparent during the pandemic
% Value share across channels
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift | YTD P6 20 vs YA
Emerging channels* including specialty stores, pharmacy, minimarkets, convenience stores, drug stores and online.
Urban 4 cities
56 54 53
9.2 8.9 8.7
8.1 8.86.5
13.8 14.215.0
4.4 5.2 6.2
1.9 2.7 3.4
FY 2018 FY 2019 H1 2020
Street Shops
Wet Market
Specialty Stores
Pharmacy
Hyper & Super
Cash & Carry
Minimarket
Convenience Stores
Drug Stores
Online
Others
8
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift | H1 2020 vs YA
-10-6
51
25
13
-1
103 3
85
70 67
45
24 2721
159
Drug Stores Pharmacy Online Minimarket CVS Cash & Carry Hyper & Super Wet Market Street Shops
FY 2019 H1 2020
% YoY Change across key channels
Amid C19 situation, emerging channels and big modern formats are riding the growth wave, which might continue post pandemic
Urban 4 cities
Emerging channels Big modern formats Traditional trade
9
2 Key Retail trends in the new normal
10
Digital Acceleration
11
56%Online
shoppers
44%Non-online shoppers
Source: Worldpanel Division | Vietnam Urban 4 cities | Smart shopper | June 2020
Online channel today has reached over half of population, yet having many things to do in order to tap into the other half, mostly in +50yo
% Online penetration – MAT P6’20(FMCG + non-FMCG)
(2/3 of non-online shoppers are > 50YO)
12
For FMCG purchases, more and more consumers move to online
Source: Worldpanel Division | Households Panel | Urban 4 key cities Vietnam | Total FMCG excluding Gift
There is still headroom to further grow in both shopper base and shopping traffic, which is expected to bring more incrementality to FMCG market.
• More than 1/3 of urban households (35%) now
shop FMCG online, adding +500,000 new households in 2 years.
• Shoppers buy FMCG online every 2 months and a half…
• …and spend more than 300k each trip on average.
13
Online shopping for FMCG products sees a step change in monthly shopper traffic under C19, which will likely accelerate post pandemic
Source: Worldpanel Division | Households Panel | Urban 4 key cities Vietnam | Total FMCG excluding Gift
FMCG Online - % Monthly Penetration (shoppers)
16.8
10.9
24.5
0
5
10
15
20
25
30
P13'16 P6'17 P13'17 P6'18 P13'18 P6'19 P13'19 P6'20 P13'20 P6'21
Online Forecast (Online) Upper Confidence Bound (Online)
Urban 4 cities
With current trends we could expect monthly penetration to be between
17% - 25% in one year
14
E-commerce grows in all demographics, even in 50+yo and in rural and it is mostlyincremental for FMCG
Source: Worldpanel Division | Households Panel | Urban 4 key cities & Rural Vietnam | Total FMCG excluding Gift | H1 2020 vs YA
% Online shoppers by demographic
0
5
10
15
20
25
30
35
40
45
50
Main ShopperAge <30
Main ShopperAge 30-39
Main ShopperAge 40-49
Main ShopperAge 50+
H1 2020H1 2019
0
5
10
15
20
25
30
Urban 4 key cities Rural
Among Urban 4 key cities
15
Understanding the barriers and triggers for online shopping, which are different across consumer groups, will be key in order to expand
1
2
3
4
5
Top 5 commonTriggers Barriers
Shopping habit: not used to online shopping
Product quality & guarantee
Product experience: touch & feel
Delivery time
Shipping fee
Time saving
Avoid crowds/ queues
24/7 shopping
Doorstep delivery
Easy shopping via social network
Source: Worldpanel Division | Vietnam Urban 4 cities | Smart shopper | June 2020 16
Source: Worldpanel Division | Vietnam Urban 4 cities | Smart shopper | June 2020
100
21
95
28
Cash Digital payment*
Total Online & Offline Online
% Shoppers - Payment method when shopping Online or Offline
Most consumers prefer cash on delivery (COD) method when making online purchases, yet great promising for digital payment to take off
*Digital payment: Bank transfer, e-wallet, credit card.
The younger, the more exposure to digital payment
Half of shoppers <30yo today use digital payment
17
What’s next: Direct to consumer (D2C), subscription model!?
Unilever solutions: D2C platform
18
Convenience, Greater Convenience!
19
Consumers now seek for a greater convenience, which means not only proximity but also ease and speed
Urban 4 citiesTop 7 reasons to choose a shopping place (% agree vs YA)
1 The store is clean
2 It has good quality products
3 You can easily find what you want
4 It's near my home or on my way back to home
5 The staff are friendly/ responsive to my request
6 I save a lot of time shopping there
7 It's convenient to get there
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Lifestyle survey 2019 20
As such, street shops – a traditional channel remain dominant and manage to grow healthily even in challenging time amid the fiercer competition coming from modern & emerging channels
5 pts vs 2 YA
Street shop during C19 time…(H1 2020)
+9%Value growth
% Contribution to FMCG growth
More than
1/3
More than half (54%) of
consumer spend on FMCG happened in street shops in 2019.
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift 21
In the context of C19, they quickly adapt and respond to consumer changing needs in order to survive
#1. Safety first
In support of national social distancing campaign, they applied many measures to control the spread of COVID-19.
• Wearing mask
• Limiting physical contact
• Washing hands
#2. Product availability
Prioritize “pandemic” categories which are in high demand during quarantine time.
Work with more than one supplier/distributor both online and offline to make sure products available to capture consumer needs.
#3. Improvisation
Provide safe, speedy and convenient solutions to their consumers: “Less physical contact” shopping via phone/online & doorstep delivery.
22
24
29
0
5
10
15
20
25
30
35
Minimarkets continue growing its shopper base, which even shows a significant uplift under pandemic, promising to keep momentum post C19
Source: Worldpanel Division | Households Panel | Vietnam Urban 4 Key Cities | Total FMCG excluding Gift
Transactions (100,000 times) Penetration (%)
Under COVID19
MCO
FMCG purchases in Minimarket – 4 week rolling
On average, shoppers make 4trips every quarter, spend about
100k each trip in
minimarkets.
Minimarkets now have reached nearly 2/3of urban households, adding 240,000 new
households into its shopper base over 12 months to June 2020.
23
This smaller modern format is also an organic source of FMCG growth with the majority of its FMCG sales increase not being shifted from other channels
Source of value changeUrban 4 cities
Source: Worldpanel Division | Households panel | Urban 4 Key Cities Vietnam | FMCG excluding Gift
Of FMCG sales gained in Minimarkets are incrementality, by adding or increasing incremental spend to total market, not from switching among channels.
80%
24
Additionally, minimarkets are winning rural consumers with the aggressive expansion of Bach Hoa Xanh, opening up huge opportunity to further surge
Bach Hoa Xanh is now the main retailer, which has
already reached 12% of
rural households.
Source: Worldpanel Division | Households Panel | Rural Vietnam | Total FMCG excluding Gift | 12 months to June
Rural Minimarkets - % Penetration
3%4% 15%
2018
2019
2020
Shopper base are x5within 2 years, acquiring
more than 2 millionnew rural households.
Rural shoppers spend the same amount (100k VNĐ) for each trip, compared to Urban
citizens…
… and shop there every quarter, likewise in Hyper & Super.
25
What’s next: Virtual stores, vending machines, click & collect
Vingroup chose 20 points in Hanoi and Ho Chi Minh City to officially launch the VinMart virtual store 4.0 which allows users to buy a product by scanning its QR code via smartphone. The products are listed on large banners in crowded public areas such as bus stations and office buildings, offering delivery within 2-4 hours.
There is an increasing number of vending machines in public areas i.e. bus station and soon metro stations. The format which skews more to younger consumer groups is potential for drinks & snacks brands to win impulse purchases. It is expected to see more in the near future.
26
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• News/updates specific to Vietnam on
Kantarworldpanel.com/vn
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via [email protected] or
THANK YOU!
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