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Nielsen Vietnam introduces the annual update of the Grocery Report which gives an overview and food for thought on the FMCG industry. This year's edition covers consumer insights and new trends on the horizon for Vietnam
Citation preview
1
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Vietnam Grocery Report 2011 Update
2
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Vietnam Today Navigating the Current Landscape
Market Landscape A Challenging 2011
Inflation Value for Money Key for Consumers
Growth Opportunities The Importance of the Three I’s:
• Investment • Identity • Innovation
3
Copyright © 2011 The Nielsen Company. Confidential and proprietary. Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Market Landscape A Challenging 2011
§ Economic growth is moderating due to shortterm macro and micro challenges
§ Growth slows across categories
§ Inflationary pressures have generated uncertainty in consumer, business confidence
§ Increasing stratification of consumers: Premium buyers maintain while the middle is squeezed
4
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Challenges arose in late 2010 and bloomed in 2011
= indicates health; = indicates challenges
Source: 2011 Estimation by Vietnam government; GDP Growth, Inflation, CIEC: 20082009;Vietnam GSO
2011 Growth Estimation
6.1% 15% <5% 22.6% 10% 12%
09 10 09 10
21 %
09 10
5 %
09 10 7 %
12 %
09 10
3 %
09 10
8 %
10 %
16 %
17 %
29 %
3 %
7 %
Retail Sales Growth
GDP Growth Inflation Unemployment FDI Growth Trade Deficit
5
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Gas retailers increased prices by 4%
Fuel prices increased by 18%
Retail electricity prices increased by 15%
ASIA Average
106
Various economic shocks have affected consumer confidence
Source: Nielsen Consumer Confidence Online Survey Q1 – 2011 Press Articles
6
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Vietnam’s retail market attractiveness has slid further
GRDI Rank
2008: 02 2009: 06 2010: 14 2011: 23
Source: AT Kearney Analysis
*) Based on weighted score of market attractiveness, market saturation and time pressure of top 30 countries
2011 GRI country attractiveness
7
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Still a highgrowth FMCG market, but inflation has tempering effect
Regional Summary FMCG Growth Q1 2011
Source: Nielsen Retail Audit
8
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Consumption slows in some categories. Are too many costs being passed onto consumers?
Top 10 categories – 6 Cities TT Value and Volume growth Q1 2011 vs. YAG
Source: Nielsen Retail Audit
9
Copyright © 2011 The Nielsen Company. Confidential and proprietary. Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Inflation Value for Money Key to Consumers
• As purchasing power is affected, “spend for necessities only” is now the consumer’s motto
• Consumers are becoming more driven by promotions
• Upsizing continues in Household, Personal Care and Food categories
• Private Label is expected to become the next big consumer trend in the coming years
10
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
81% of people are cutting spending on Unnecessary items
Source: Nielsen Personal Finance Monitor – June 2011
*) Unnecessary items are subject to each respondent’s perceptions
11
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
PostTet 2011 price increases seem to have a big impact, but consumers still spend on core items
$ 96% said prices increase somewhat/ significantly
60% Household purchasing power reduced somewhat/ significantly
Products for own consumption (entertainment, eating out…), but not
those for children & family
Impact
*Q.24 – 27; Tet 2011 = Feb’11
Source: GSO, Nielsen Omnibus March 2011
12
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Q.33 16
Source: Nielsen Omnibus March 2011; Nielsen Business Barometer 1 st H 2011
Consumer’s claims Business Leader’s opinions
9
26
33
44
51
59
Choose the shops where there are cheaper prices…
Buy more Vietnamese goods
Visit shops/ grocery stores near home to save cost…
Reduce number of products per purchase
Choose to buy more products on promotion
Reduce the number of visiting shops
Business leaders and consumers both expect more purchase on promotion in the near term
13
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Vietnam has highest promotion sensitivity in Asia at 87%. More than half of consumers seldom change stores but actively search for promotions
11 10
55 56
16 21
13 9
5 4
0%
25%
50%
75%
100%
2009 2010
Promotion rarely changes my brand choice
Only buy promotions when I already like the brand
Regularly buy different brands because of promotions
Seldom change stores but when shopping, actively search for promotions
Change stores based on best promotions offered
Base: (2009 n=1466) (2010 n=1464)
87%
Source: Nielsen Shopper Trend 2010
Vietnam Promotion Sensitivity
14
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Food and Beverage categories have seen the sharpest price increases…
+ 20% + 11 to 19% + 1 to 9% 0%
Average Price Index of FMCG Categories – YTD Apr’11 vs. YTD Apr’10
Source: Nielsen Retail Audit
Unit price index: unit price of Top items contributing 50% per category value and existing over last 13 periods in 6 cities.
15
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
… and consumers are more open to change their shopping behavior in categories with higher prices
*) Q.29; Base : 300 (all respondent)
Food
Dairy
Prod
uct
Person
al
Care
HH
Care
Beverag
es
Source: Nielsen Omnibus March 2011
Do shopping behavior changed due to price increase?
16
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
11 12 14
28 8 16
6
19 7
10 17
30 31
72 79 86
54
38 37 81
39
78
40 50 72 59 84 29
29
27 30 22
8 15
12 5
26 17
8 8 7
61
18
Carbo
nated So
ft Drin
k
Ready
ToDrin
k Te
a
Energy
Drin
k
Instan
t Coffee
Instan
t Noo
dle
Coo
king
Oil
Liqu
id Milk (UHT)
Infant Formula (*)
Adu
lt Milk (*)
Sham
poo
Bar Soa
p
Facial Clean
ser
Toothp
aste
Toothb
rush
Laun
dry Produ
ct
Hou
seho
ld Clean
er
Substitute to other products
Consume less less expensive brands
Consume less same brands
Consume less more expensive brands
Same amount smaller pack size
Same amount larger pack size
Same amount more expensive brands
Same amount cheaper brands
Consume more
Consumers are likely to stay with their brand in several categories, either consuming less or trading off the amount by buying bigger pack sizes
% Beverages Food Dairy Personal Care HH Care
Source: Nielsen Omnibus March 2011
*) Q.29B; Small baseread with cautions for Infant Formula & Adult Mik
17
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
36 cities TT, data ending Marl11
Source: Nielsen Retail Audit
Value for money: Upsizing is the key trend in Food, Household Care and Personal Care categories
MSGBoullion (Big >=900g)
Laundry (Big >=3kg)
Shampoo (Big >500ml)
Fish Sauce (Big > 750 ml)
18
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Upgrading trend continues in some Personal Care and Home Care categories
Deodorant Fabric Softener Moisturizer
Pricing segments based on average price index vs. category average
Source: Nielsen Retail Audit
19
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
PRICE Price of private label is 15 – 30% lower compared to brands
Private Label Awareness
Key Private Label Categories
Source: Nielsen Shopper Trend 2010
Private labels are gaining ground, especially for Food, Paper Products, Household and Personal Care
20
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Vietnamese consumers are generally open to private label products
Source: Nielsen Global Online Survey Q3’2010, Nielsen Shopper Trend 2011, Press Article
75% Associate store image with private label
quality
73% Believe private label quality is just as good as quality of leading
brands
21
Copyright © 2011 The Nielsen Company. Confidential and proprietary. Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Growth Opportunities The three “I’s”– Investment, Identity, Innovation
• Investment – the rural market accounts for 47% FMCG value with limitless potential to be unlocked. Modern trade contributes ¼ of total FMCG value with increasing importance across categories.
• Identity – the brand power of “Vietnamese products” – backed by local manufacturers’ activation and strong consumer preference.
• Innovation – Market is getting complex with new and inventive products. Those that meet consumers’ key needstates in new ways will likely stand out.
22
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Opportunity: Investment
Vietnam’s Rural Consumers
23
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Business leaders temper growth expectations, still see market opportunities
Source: Nielsen Business Barometer 1H 2011
2 6 7 3
12 21
28
20
30 24
24
18
2010 2nd half 2011 1st half
25%+
20% less than 25%
15% less than 20%
10% less than 15%
5% less than 10%
Less than 5%
Expected company growth rate in next 12 months
12
14
31
43
45
76
72
Increased consumer demand in your existing categories/ industry
Expansion to secondary cities/ rural areas
Expansion to modern trade channel
Expansion to new categories/ industries
Increased marketing expenses
Improved business conditions in Vietnam overall
Improved business conditions in your industry overall
Key factors contributing to expected company growth
91%
24
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Reaching rural consumers is the next big opportunity
FMCG % turnover
Total population
Sales of FMCG categories such as Laundry and Toothpaste
Source: Nielsen Retail Audit, GSO
Annual Average Income Per Capita – USD
0
400
800
1,200
2002 2004 2006 2008
Urban Rural
177%
158%
25
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Rural Vietnamese save a substantial portion of their income
North West / North East North: 462,000 VND
Central: 377,000 VND
South: 571,000 VND
How Much Per Month?
75%
How Many Households Save?
Monthly Average Saving Amount – Mean score
HCM 1,373,180 VND
Hanoi 992,834 VND
•Source: Nielsen Rural Syndicated 2010
Where Does it go?
Keep at home: 87%
Buy gold: 7%
Savings Account: 6%
Foreign currency: 2%
Buy insurance: 2%
26
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Opportunities seen in categories where penetration is still low
100 100 100 100 100 99 97 96 94 88 87 86 85 81
75 74 71 71 69 59 59
54 46 46 45 44
35
24 15 13 11
6
0
20
40
60
80
100
DETER
GEN
T
DISH WASH
ING LIQUID
SHAMPO
O
TOOTH
PAST
E
FISH
SAUCE
MSG
INSTANT NOODLE
S
COOKING OIL
SANITARY NAPK
INS
CSD
BEE
R
COLD
/FLU
BISCUITS + SN
ACKS
RTD
TEA
FABRIC ENHANCER
/ SOFTEN
ER
BOUILLO
N GRANULES
CIGARETTE
S
SOY SA
UCE
RTD
MILK+FLA
VORED
MILK
COFFEE
(INHOME CONSU
MPTION)
HAIR CONDITIONER
COFFEE
(OOH CAFE)
MOBILE PH
ONES
FRUIT JUICES
HOUSE
HOLD
CLEANER
VITA
MINS (ADULT)
FACIAL CARE
DEO
DORANT
TONIC FOOD DRINK
INFA
NT MILK
DIAPE
RS
INFA
NT CER
EAL
Total Rural Vietnam – Used in past year
•Source: Nielsen Rural Syndicated 2010
Base: All respondents (n=4200)
27
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Opportunity: Investment
Modern Trade
28
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Modern Trade: increasing in number of stores and importance
Modern Trade (exclude Metro – Cash & Carry) Store Numbers ACV Contribution
National : 752 → 826 National : 11% → 13%
Source: Nielsen Retail Census 2009 and 2010
29
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Higher contribution to monthly grocery purchase categories like Food, Household and Personal Care
Total Ho Chi Minh + Hanoi; Data ending Apr 2011; MT exclude Saigon Coop
Source: Nielsen Retail Audit
30
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Market is dominated by local players, with more presence from international players
5
3
50
21
16 3 22
15
7
15
13 14 13 5
2
101
44 Super Market Food store Convenient store
STORE NUMBER OF KEY PLAYERS UPDATED TO APRIL 2011
Source: Nielsen Retail Census 2010
31
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
There is still scope to develop for Modern Trade Vietnam benchmarked to other Asian countries
China Malaysia Thailand Indonesia Vietnam
64%
88%
53%
63%
46%
70%
13% 16%
37%
China
Shanghai
Malaysia
Kuala Lum
pur
Thailand
Bangkok Vietnam
Hanoi HCMC
Indonesia
Jakarta
Greater
66%
43%
Source: Nielsen Retail Census 2010
Share of trade for Modern Trade channel
32
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Opportunity: Identity
Vietnamese Brand
33
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
HCMC Ha Noi
I would probably purchase more Vietnamese goods
I’ve already been purchasing more Vietnamese goods
I would definitely purchase more Vietnamese goods
62% 49%
Not sure if I would purchase more Vietnamese goods
28% 34%
8%
2%
2%
14%*
90%
Source: Vietnamese Goods Trend Nielsen Study 2011
83%
Consumers’ perception of local goods changes for the better, representing a solid growth opportunity
* Significantly higher
34
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Local goods are appreciated for a variety of reasons
HCMC Ha Noi Consumer’s association toward Vietnamese Goods Consumer’s association toward Vietnamese Goods
Reasonable price
Wide variety
Is the brand suitable for me
Trustworthy brand
Attractive promotion
Attractive packaging
Good quality
Good guarantee
Safe ingredients
Premium brand
39%
35%
35%
25%
25%
22%
20%
18%
17%
13%
32%
54% *
42%
35%
52% *
38% *
26%
52% *
30% *
26% *
* Significantly higher; Base: All respondents (n= 300); Q.28a
Source: Vietnamese Goods Trend Nielsen Study 2011
35
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
* Significantly higher; Base: All respondents (n= 300); Q.27
"Made in Vietnam" on the label
The logo of "High quality Vietnamese goods" on the label
Vietnamese brand name
the note "Made in Vietnam" on the label (64%)
Vietnamese brand name (56%)
Vietnamese labeling (ingredients, instruction,...) (53%) *
the logo of "High quality Vietnamese goods" on the label (46%)
the logo of "High quality Vietnamese goods" on label (82%) *
the note "Made in Vietnam" on the label (78%) *
Vietnamese brand name (57%)
100% Vietnamese manufacturer (44%)
If label says ‘Made in Vietnam’ it can be viewed as a local brand, despite international origins
Source: Vietnamese Goods Trend Nielsen Study 2011
36
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
…which explains such a strong preference for Vietnamese goods across FMCG categories
Household care products
Non alcoholic beverage
Personal care products
Confectionery
Milk/ Dairy products
Alcoholics
Top Box
4% 4% 92%*
9% 34% 57% 19%* 24% 57%
1% 18%* 81%
20% 31%* 49% 13% 24% 63% *
21% 25% 54% 15% 17% 67%
9% 20%* 71% 8% 17% 75%
1% 10% 89% 4% 7% 89%
* Significantly higher; Base: All respondents (n= 300); Q.29
Prefer Vietnamese goods
Prefer International goods
No preference
HCMC Ha Noi
Source: Vietnamese Goods Trend Nielsen Study
37
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Opportunity: Innovation
Product/Marketing Innovations
38
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Categories are becoming complex with more new products
Source: Nielsen Retail Audit
147 Beverage
143 Household Care
1,346 Personal Care
662 Food & Milk
0
2,000
4,000
6,000
8,000
10,000
Food Personal Care Household Care
Beverage
MAT 2YA MAT LY MAT TY
Active SKUs – MAT 3 Year Trends New Variants in Last 2 MATs
Data ending April 2011
39
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Innovation helps products stand out in a crowded landscape
Source: Nielsen Retail Audit
Sunsilk Cocreations
Nano Complex
Extra chewing gums
Microgranules
Knorr Gia vi Hoan Chinh
Mixed ingredients
Chinsu Toi Ot
Prepared fish sauce
Downy 1 Lan Xa
One wash P/S White Now
Blue foam for instant white teeth
Minute Maid Nutri Boost
Milkbased Juice
Ikun
Carbondinated RTD Tea
CloseUp
Hot and Icy toothpaste
Comfort Sang Tao
Flower & Fruit Sense
New Combination
40
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
‘Goodforheath’ products with natural ingredients across food and personal care are preferred by consumers
Source: Nielsen Omnibus March 2011, Nielsen Retail Audit
Vietnamese consumers listed Health as their top priority
Kotex Panty liners
Green Tea extract
Nam Ngu Fish Sauce:
Clean fish sauce
Vfresh Fruit Juice
Naturally good
TH True Milk
Truly natural
Lifebouy Body Soap
Natural bitter melon
41
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
CocaCola Live Positively Campaign
Source: Press articles
Going “green,” environmentally friendly products and initiatives are an emerging trend for manufacturers and retailers alike
2011 Green consumption month in CO.OP Mart
42
Copyright © 2011 The Nielsen Company. Confidential and proprietary. Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Food for Thought Food for Thought
How to navigate through the short How to navigate through the short term challenges term challenges and gain in the long and gain in the long term? term?
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
43
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
• In the face of current economic conditions, it is critical to understand what VALUE VALUE means to consumers
Promotion Pricing Large pack sizes
Expansion to
secondary/ rural areas
Expansion to modern trade
channel
‘Vietnamize’ your brands
Brand portfolio
Food for Thought
• Continue to invest to secure longterm growth future for your brands:
44
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Nielsen Vietnam
Dabao Nielsen Top to Top Meeting
45
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
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