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Vietnam Grocery Report

Annual Update

August 2010

Vietnam Grocery Report


Executive Summary
• Vietnam to continue displaying great promise over the next
10 years
– Younggppopulation
p ((56% under 30)) will jjoin the workforce
– High confidence towards country, economy & social life
– Modern Trade continues to emerge while Traditional Trade is still
dominant
– Majority of population comes from rural (>70%) where it has shown
strong
gggrowth in recent yyears
– Consumers become more sophisticated & demanding through their
wider product choice, concerns on health & beauty and smarter
shopping way
– People are getting more connected through technology
• However
However, these opportunities come with challenges for
businesses and investors alike
– Health concerns caused by air/water population and pesticides that
could be an area for PR execution
– Ability
Abilit tto cover th
the d
dynamic
i and
d di
discriminate
i i t ViVietnamese
t
consumer needs
– Rural would be a mystery land to explore the potential expansion
2

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Agenda

• Vietnam Heating Up
Ay
young
g country
y with positive economic indicators

• Retail Landscape
High
g sales & store g
growth
FMCG Snapshot

• Vietnamese Consumer Insights


Capturing different consumer shopping behaviors

• New Trends
As the competitive market is always changing, new trends emerging
3

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Vietnam Heating Up

•56% of total population is under 30 years old

•GDP grows in both urban & rural

•Vietnam re-gains confidence index in Q2.2010 and ranked # 2 top


confident countries in Q2.2010

•Business leaders show high expectation to their business conditions

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Vietnam country facts

Vietnam Notes

Population 2009 86 millions


Hanoi
Male 2009 42.6 millions (49.5%)
Female 2009 43 4 millions (50
43.4 (50.5%)
5%) Haiphong

Urban 2009 29.6%


Rural 2009 70.4%
Population growth rate 2009 1,06%
Danang
GDP growth rate 2008 6.3%
GDP growth rate 2009 5.3%
Inflation rate 2009 6.8% Nhatrang

Key cities: •Ho Chi Minh (Economic


capital)
•Hanoi (Political capital) Cantho
•Haiphong
Haiphong Ho Chi Minh
•Danang (the “bridge”)
•Nhatrang
•Cantho
5
Source: Statistical Handbook of Vietnam 2009

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


In Vietnam, growth is seen across measurable facts
GDP Growth Inflation Unemployment Wage Growth
2007 + 8.5% 5.1%
2007 +8.5% 2007 2007 +11.2

+6.2% 2008 +23% 2008 4.3 % 2008 +4


2008

+5.3% 2009 +6.9% 2009 2.9 %


2009 +10
2009

+10% 2010E <5 % 2010E +12.3


2010E +5.5% 2010E

FMCG Volume Growth Consumer Confidence


+15%
+13%
+ 10% 118 106 97 109 101
119
85

+4%
2007 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half
'08 '08 '09 '09 '10 '10
2007 2008 2009 MAT Jun10 ▼ ▼ ▼ ▲ ▼ ▲
6
12 t
12pt 9 t
9pt 12 t
12pt 24 t
24pt 8 t
8pt 18 t
18pt
•Sources: Wage growth, 2007 Economic Intelligence Unit , 2008-9 HRBS Asia-Pacific Pay Increase Guide 2009
(Survey Period: Jan 6 to Feb 6, 2009); 2010E by Vietnam government ; Consumer Confidence, Nielsen Global
Online Survey 2007-10; GDP Growth ; Inflation, 2006-2007 data from IMF; And CIEC: 2008-2010 IMA Asia
Brief December 2010; Asia Development Bank Outlook 2010 , 2010E by Vietnam government; ; FMCG
Growth, Nielsen; Vietnam Retail Audit. Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Vietnam shows sharp consumer confidence re-gains and is ranked #2
top confident country in Q2.2010
2H 2010 Nielsen Consumer Confidence Index
Vietnam, 2nd most confident
160 Changes 2H10 vs.1H10
2 3 18 2 -2 5 1 -3 -1 5 2 2 -2 1 0 5 1 4 3 5 2 2 -3 5 4 3 2 3 2 -2 -1 -1 7 2 -2 -17 -1 3 -4 -10 1 4 -5 -1 6 0 1 6
▲▲ ▲ ▲ ▼ ▲ ▲ ▼ ▼ ▲ ▲ ▲ ▼▲ ▲ ▲▲▲ ▲ ▲ ▲ ▼ ▲ ▲ ▲ ▲ ▲ ▲ ▼ ▼ ▼ ▲ ▲ ▼ ▼ ▼ ▲ ▼ ▼ ▲▲ ▼ ▼ ▲ ▲ ▲
140
129
119119
120 113113112109 107 Global
108 102 101
105 average
101 99
98 98 98 97 97 97
100 94 93 92 92
88 87 8785 84
88 88 84 81
79 78 78
93
80 73 73
71 69 68
65 63 61
59
60 56 55 52

40

20

KO
HK
AU

RU

GB
VN

CN

JP
LV
HU
PK

EG
CA

UA
AR

AT

TR
DK
PH

BE

EE
NO

CO

IE
NZ

CZ
IN

CH

TH
AE

DE
MY

PL

FI

TW
IL
ID

SG

MX

ES
NL

ZA
BR

FR

LT
SE

IT
US

Base : All respondents n=26995


7

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


A ‘young’ population means an increase in purchasing power as it
joins and progresses in the workforce

Total Vietnam Population


Male Vietnam 2009 Female

80+
75 - 79 Population under 30 years old: 56%
70 - 74
65 - 69
60 - 64
55 - 59
50 - 54
45 - 49
40 - 44
35 - 39
30 - 34
25 - 29
20 - 24
15 - 19
10 - 14
5-9
0-4
5000 4000 3000 2000 1000 0 0 1,000 2,000 3,000 4,000 5,000
General Economy: Population 8
Source: U.S.
U S Central Bureau
Bureau, International Database

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


This workforce will further fuel the GDP Per Capita in the coming
years

Labor force (‘000 individuals) GDP Per Capita (in USD)

60,000 1,200
1,074
50,000 1,024

40,000 835
725

30,000
552
440
402
20,000
,

10,000

0
00

02

04

06

08

10

12

14

16

18

2000 2002 2004 2006 2007 2008 2009 Expected


200

200

200

200

200

201

201

201

201

201

2010

Labor force ('000 individuals)

9
Source: Government
Government’s
s General Office of Statistics (www
(www.gso.gov.vn)
gso gov vn)

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Leaders show high growth expectations towards the Vietnam economy
and their own business condition

What do you think GDP growth rate will be for the next 12 What do you think your company growth rate
months? will be for the next 12 months?
What do you think your industry growth rate will be for the
100%
next 12 months?
14 13.6
21
25%+
2009 1st half 2009 2nd half 31
12 11.3 80%

2010 1st half 10.2 21% - 25%


17
10
60%
11
16% - 20%
8
%
20
23 11% - 15%
6 5.7 40%
5.0 4.9
17 6% - 10%
4 12
20%

2 17 14 Less than 5%

4 5
0%
0
Est. Next 12 months GDP All industry est growth rate 2009 2nd half 2010 1st half
growth rate
10
Source: Nielsen Business Barometer

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


The workforce numbers and advertising spending are expected to
increase to a good degree
Over the next 6 to 12 months, how do Over the next 6 to 12 months, how do you
you anticipate your company's work anticipate your company's spending on
force numbers to change? advertising to change?
100%
100% 7 2
4
11
Increase Increase
significantly significantly
80%
80% 31 (5) 32 43
Increase Increase
somewhat
h t (4) somewhat
60%
46 60%
Remain the
same (3) Remain the
29 same

40%
53 Reduce 40%

somewhat (2) 43 Reduce


somewhat
Reduce 21
20% 30 significantly 20%

(1) Reduce
significantly
11 12 11
2
2
0% 1 0% 2
2009 1st Half 2010 1st Half 2009 1st half 2010 1st half 11
S
Source: Nielsen Business Barometer

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Retail Landscape

•Modern Trade continues emerging from both sales & store growth
while Traditional Trade is still dominant

•The majority of Vietnam population lies in rural areas (74%) which also
contributes biggest to FMCG sales (46%)

•The main purchasing power still comes from the 6 urban cities (only
14% population generates 39% FMCG sales) and continues to develop
at the fastest rate

•Beverage & Food products are growing the fastest

12

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Retail Structure Change

13

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


The leading 6 cities account for 37% of Vietnam FMCG sales. Rural
areas provide greater FMCG contribution to total Vietnam’s sales as this
i where
is h a majority
j it off th
the population
l ti lilie

National FMCG Retail Market Structure


100
14
25
7 37 6 CITIES
80 39
5
9
5
60 30 CITIES
11
22
4
40
74 53 CITIES
14
61
46
20
27 RURAL

0
Population 2007 Store 2009 FMCG ACV 2009 Retail Sales
Estim ated
Source: Six City, 30 cities and Rural store numbers and ACV (store
turnover) from census results, 53 Cities estimated. Population, Retail Sales 14
(FMCG sales + Other retail sales such as Durable goods) from
Government Statistics 2006

Page 14
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Both urban and rural are on a strong growth trend, yet there is still a
great room to develop rural area further

Urban and Rural Growth GDP Per Capita

157%
151%
145%

136% 137%
Urban
Rural 127% 127%
123%
119% 120%
117%
114% 113%
109% 109%
104% 106%
100%
100% 102%

000 001 002 003 004 005 006 007 008 0 9E


2 2 2 2 2 2 2 2 2 20
Growth rate is calculated based on constant prices 1994 excluding inflation.

15
S
Source: G
Government Statistics
S Offices
Off

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Business leaders also plan to expand their business to rural areas

In the next 12 – 18 months, to what extent will you look to


rural Vietnam areas to drive your company growth?
100%
13
17 18 Increase significantly

80%

Increase somewhat

60% 51

58 53
Neither increase nor decrease

40%

Decrease somewhat

20% 32
26
25 Decrease significantly
g y

4 2
0%
2009 1st half 2009 2nd half 2010 1st half

16
S
Source: Nielsen Business Barometer

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Within channel types, Off-Premise continues increasing both in store
numbers and sales especially in urban cities, which indicates an
opportunity for in
in-home
home consumption products
Store number (000s) by tier FMCG Value % Contribution by tier

Off Premise On Premise


+3% +14% +3%

+2%
47% +12% 46% -1%
1%
447 458

267 264
5% +15% 4% +3%
11% +14% 9% +5%
29 29
30 30
48 51
52 53
38% +19% 41% +8%
133 138 151 161

2008 2009 2008 2009 Off Premise On Premise

6 Cities 30 Cities 53 Cities Rural VN


% Growth vs. YA
17
S
Source: Nielsen Retail Census
C 2009

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Modern Trade grows fast through store numbers and overall sales per
store, while Traditional Trade is still dominating. On-Premise is more
skewed towards Café and Eatery
Eatery.
Store number and ACV growth by channels in Off and On channel in Vietnam

% Store % ACV % Store % ACV


2009 Store
St growth
th growth
th vs. 2009 St
Store growth
th growth
th vs.
OFF PREMISE Number vs. YA YA ON PREMISE Number vs. YA YA
Modern Trade 752 45 63 Café 241,478 4 3
Trad. Grocery 501,135 6 16 Eatery 171,673 4 8
Street Vendor 10,717 -23 -19 S
Sidewalk Eatery 10,068 -3 -1
Personal Store 19,055 3 4 Res. Vietnamese 9,826 -2 0
Market Stall 83,700 -4 0 Billiard Centre 11,659 -27 -22
Cosmetic Store 893 -9 -4 Karaoke 6,537 -15 -4
Beverage Store 19,327 6 0 Others 52,802 -4 -1
MBS 1,566 -36 -24
Cigarette Kiosk 20,602 -14 -29 Note: ACV = All Commodity Value (Store turnover)
Ph
Pharmacy 15 518
15,518 0 9
Other 6,130 1 3

18
Source: Nielsen Retail Census 2009

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


In 2009 shoppers only slightly increased their store repertoire

Number of Supermarket/ Hypermarket Used – Stores Used in Past 4 Weeks


2008 2009

1 store 54 46

2 stores 32 36

3 stores 9 13

4 stores
t 3 4

5 stores 1 1

Average/(shops) 1.66 1.80

Base: All Supermarket/Hypermarket shoppers (2008 n=1494, 2009 n=1466)


19
S
Source: Nielsen Shopper
S Trend 2010

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


There has been no increase in the number of supermarket visits yet
consumers have increased spend per visit in the MT channel.

Average Frequency of Visits per month Trade Sectors Where Shoppers Spend the Most Money

1.2 2
Hypermarkets Hypermarkets
1.4 5
2008 2009

3.3 21
Supermarkets Supermarkets
3.3 43

28.1 77
Wet Markets Wet Markets
25.2 51

20
Source: Nielsen Shopper Trend 2010

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


The increased spend probably comes from a higher % of fresh foods
being purchased from Modern Trade versus last year

Place of Most Often Purchased by Category


Supermarket Cont.
% (2008 report) 7% 9% 7%
100 1 Others
5 2 211 12 21 6
4 4 4
7 19
18
27 Confectionery Shops
80

54 Wet market
60 78 60
81 81 53

63 60 Liquor Stores
40 56

Traditional Grocery
32
20 24 29
19
17 17
13 15 16 Supermarkets
4 8 7 4
0 2 2
Fruit & Meat or Fish or Snack CSD Dairy Alcoholic Personal Household
vegetables poultry seafood products Products care cleaning Hypermarket
products products
21
S
Source: Nielsen Shopper
S Trend 2010

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


This can explain why 2010 seems to be the year when manufacturers
look for more contribution from Modern Trade
Modern Trade Contribution to Sales Revenue
Question: How important is the modern trade to your business
today (as a % of your business’s revenue)?
What do you expect MT (as a % of your revenue) to be worth by the
end of the year?
2009 2nd half 2010 1st half
h lf
2
10
13 15 15

13
15 27

23
21 46

29

25
30
12
15

26 22
20 17

Now End of '09 Now End of '10


Less than 5% Less than 10% Less than 20%
Less than 30% 30% or greater
22
S
Source: Nielsen Business Barometer

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Even more so as the Modern Trade sector in Vietnam still has much
opportunity compared to other countries within the region

Share of trade for modern self-service outlets

89 90 91

48 51 51 46 4848 43 45 46
35 36 37

11
9 10 10

Si ng ap o r e M al aysi a T hai l and Phi l i p p i nes I nd o nesi a V i et nam

23
Source: Nielsen Retail Audit - all FMCG,
FMCG Vietnam – Yearly census

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


FMCG Snapshot

24

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Nielsen Vietnam Tracked Categories
HOUSEHOLD PERSONAL MILK BASED
BEVERAGE FOOD CIG
CARE CARE PRODUCTS

Ready To Laundry Biscuits


Hair Sweetened
Drink Tea Product Cigarette
Conditioner Condensed Milk
Gums
Household Personal Wash Milk Powder
Soft Drink
Insec. Aerosol
Instant Noodles
Toothbrush Ready To
Drink Milk
Household Cooking
g Oil
Packaged
Insec. Coil Body Cream
Water
Lotion
Sauces
Fabric
Energy Drink Shampoo
Softener
MSG-Bouillon
Deodorants
Household
Fruit Juice Cleaners
Snack
Toothpaste
Dishwashing
Tonic Food
Liquid Facial Care
Drink
Products

Tea Bag Tissue


Repellent

Feminine
Protection 25

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Value consumption increases across super groups with a positive picture
from Beverage products
FMCG VALUE CONTRIBUTION - 6 CITIES TT
MATLY MATTY

MAT JUN09 MAT JUN10

Value % Volume %
Chg YA Chg YA
T t l FMCG
Total 15 15
Personal care 10 3
Household care 13 5
Milk Based Product 6 8
Food 11 11
Beverage (excluding Beer) 29 22
Cigarette 16 8
26
S
Source: Vietnam Retail Audit Tracking, ended period Jun2010

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Beverage and Food categories are dominating both importance and
growth
TOP FASTEST GROWING CATEGORIES
Top 10 biggest categories – Value % Share Top 10 fastest growing category - value % Chg vs. YA
MATTY

27
S
Source: Nielsen VN Retail Audit Tracking, ended period Jun2010

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Vietnamese Consumer Insights

•67% of total consumers expenditure is on Fresh Food

•Most of consumers (64%) are aware of price changes and are looking
for more promotions while rarely looking for new things. s

•“Vietnamese people use Vietnamese products” campaign might have


created an advantage for local products to firm up better share position

28

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Fresh food still represents the major spend bucket, consistent across
income levels

Average Monthly Spending on Food, Grocery & Personal


Care vs. Fresh Food by social class

Total Expenditure ('000 Dong) Fresh Food ('000 Dong)


3,839

3 154
3,154 3,243
,
66%
67% 63%
2,587
2,411 67%
2,098 2,180

1,549

Total Low Medium High

29
S
Source: Sh
Shopper T
Trends
d 2010

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Dynamic changes in Vietnam are afoot. After ‘premium trade-up’ &
‘promotional-junkies’, a ‘purchase Vietnamese’ trend is expected.
Do you anticipate that Vietnamese consumers will change their purchasing
behavior next 6 to 12 months?

2009 1st half 2009 2nd half 2010 1st half


Purchase more
Trade up to more Purchase more on local/ Vietnamese 49
premium/indulgent 57 48 brands
promotion
products
Buy bigger packs
Change channel to Trade down to to save money 44
save moneyy 54 cheaper
p products
p 31

Buy smaller packs Purchase more on


Not buy some 'non- 41
of the same 51 27 promotion
products essentials'

Buy bigger packs Change channel to


39 Buy bigger packs 37
save money
to save moneyy 24
to save money

Purchase more on Buy less / smaller Not buy some 'non-


36 22
promotion essentials'
packs of the same 21
products
Trade down to Trade up to more
cheaper
p products
p
23 Change
g channel to premium/indulgent 22
16 d t
products
save money
Not buy some 'non-
essentials'
5 Trade up to more Trade down to
22
cheaper products
premium/indulgent 16
products
30
Source: Nielsen Business Barometer

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


As already evidenced by strong share gains amongst some Vietnamese
brands

Fastest Volume % Share Gain – 6 cities-TT


(+/- Volume % Share Change YA – MATTY)

Dr. Thanh Vinamilk Fresh Milk Diana Sieu Tham Vinh Hao
(Ready to Drink Tea) (Liquid Milk) (Napkin) (Carbonate Soft drink)

+7.3 pts +6 pts +3 pts +2.4 pts

31
S
Source: Ni l
Nielsen VN Retail
R t il A
Audit
dit –latest
l t t period
i d JJun10
10

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Highly aware of price, Vietnamese consumers remain fairly loyal to their
favorite brand, but are attracted to in-store promotions & new items.

Shopping Dynamics

PROMOTION PRICE
ADOPTION
SENSITIVITY AWARENESS

11% Changes stores based on best 64% Vietnamese consumer are 20% seldom tryy new things
g
promotion offered aware off price
i changes
h
65% try new brands/things but
usually stick to my favorite
55% Seldom change stores but when
shopping, actively searching for
promotions

32
S
Source: Nielsen Shopper
S Trend 2010

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


However consumers behave differently in different regions

HCMC Hanoi

Promotion • Saigonese consumer favor multiple • The role of advertising is more critical.
promotion types Hanoians also claim to respond better to
in store promotions and after sales
service

Price • Price promotions alone won’t appeal to • Hanoian strongly prefer one type of
Saigonese promotion: PRICE

Adoption • Saigonese are early adopters (1 in 5 • Hard to build initial trial (1 in 10 people
people from HCMC are early adopters from HN are early adopters)

33
S
Source: Nielsen HCMC
C C & HN consumer differences
ff Jun09

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Emerging Trends

34

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Emerging trends in summary

Getting Getting
sophisticated Connected

Convenience
(4)

Private
Label
(3)
Health &
Refill Beauty
(2)

Big Pack
(1)

35

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Smart shopping:
(1) Consumers are upsizing
Do you anticipate that Vietnamese consumers will Total 6 cities_TT
change their purchasing behavior in next 6 to 12
months?
+/- Volume % Share vs. YA - MATTY

Purchase more
local/ Vietnamese 49
brands Fabclean
Buy bigger packs >2Kg
to save money 44 Granules
>300gm
Purchase more on
promotion
41 +3% pts
Change channel to
+2.1% pts
37
save money

Not buy some 'non-


22 Skin Cleaning
essentials'
>400ml
Trade up to more
premium/indulgent 22
products

Trade down to
+7.4%
7 4% pts
22
cheaper products

36
Source: Business Barometer Wave 3 (Q2(Q2.2010),
2010) Nielsen VN Retail
Audit – latest period Jun10

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Smart Shopping:
(2) Consumers buy more refill for money-saving purposes

Total 6 cities_TT
+/- Volume % Share vs. YA - MATTY

Fabric Softener

+4.8% pts Dishwashing


Liquid

+0 4% pts
+0.4%
Floor Cleaner

+4.2% pts

37
Source: Nielsen VN Retail Audit, latest period Jun10

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Smart Shopping:
(3) Consumers’ awareness to Private Labels goes up, driven by Coop-
mart and Wow
Awareness level of Private Labels

% Awareness

C
Coop M
Martt 28

Wow (Big C) 25

eBon (Big C) (Food products) 13

Metro Quality 8

Comi (Metro SPM, milk) 6

Casino ((Big
g C)) 6

Aro (Metro) 3

Tarrington House (Metro) 1

Metro (Metro SPM


SPM, rice/dishwashing liquid/laundry
1
detergent,etc.)

Fivimart (Food products) 1

Base: Hypers/Supers (n=1466)


0 5 10 15 20 25 30
38
S
Source: Sh
Shopper trend
d 2010

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Smart Shopping:
(4) Ease of access and consumption is driving channel and product
choices

Choice of Choice of
place
p product
p

Derived Importance Ranking of Package Contribution – Ready to


Supermarket Store Attributes Drink Beverage

Convenient
0.52
to get to

Wide range
of fresh meat 0.40
& fish

High
Hi h quality
li
0.38
fresh food

39
Source: Nielsen Shopper Trend 2010
2010, Nielsen VN Retail Audit –
latest period Jun10

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Getting Sophisticated:
At the same time, consumers show more interest in personal care by
using more advanced products
Value % Growth (Volume % Growth)
Total 6 cities_TT - MAT TY

Deodorant 29% (17%)

Lotion 39% (32%)

Hair 18% (17%)


Treatment

40
Source: Nielsen VN Retail Audit, latest period Jun10

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Getting Sophisticated (continued):
Consumers also start seeking specific product benefits
Specific
products for
male
Feminine Protection Deodorant Shampoo

41
Source: Nielsen VN Retail Audit
Audit, latest period Jun10

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Getting Sophisticated (continued):
More products are becoming non-exclusive. No matter what industry
you’re
you re in
in…Tickle
Tickle women with a price discount and assure men of
quality Important shopping considerations

Product 78
quality 70

59
Life Insurance Durability
Lipcare 48
p p
Laptop/PC Body 40
Credit cards cream/ Functions
25
Anti-shadow
lotion
Cigarettes TVs Toothpaste eyes cream
Vietnamese 9

Beer
Mobile phones Bar brand 19
Moisturizer
Wine Shampoo Soap
After sale 6
Sun block
Males
Razors Deodorants Hygiene
Beer
services 15
Females
Shower gel Facial wash Discounted 6
Hair Cleanse price 31
Conditioner r
Milk
2
Promotions
17

42
Source: Nielsen Study on Gender Difference Jun10

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Getting Connected (continued):
Vietnamese consumers are the savviest on technology products

% of respondents who spend on new technology products

Question: Once you have covered your essential living expenses, which of the
following statements best describes what you do with your spare cash: I spend on
% 47
41
37 36 35 33
28 28 27
24
19 18
15 13
8

VN CN ID IN PH SG TH HK MY TW AU NZ JP KO AP
g
Average

Base : All respondents n=7014

43
Source: Nielsen Global Omnibus study

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Getting Connected (continued):
Internet and social networks are very important for the younger
generation

% Access Internet

64

41

HCM+HN 18-25 years


old

44
Source: Nielsen Omnibus April09
April09, Nielsen Gen V Study Oct 2009

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Getting Connected (continued):
The internet could be the next media platform apart from other traditional
media forms
Over the next 6- 12 months, how do you anticipate your company's
spending on the following media channels for advertising?
100% 2 4 2 2 2
5 4 7
11 11 Increase significantly

29 20
27 30
80%
34 34 25 Increase Somewhat
36

60% 32 2 2
2 Remain the same
30
43 39 Reduce somewhat
30
40% 9
11 36 2
Reduce significantly
2 59 2 59
2
20% 5
18
7 34 No spending on this
27 25 channel
4 20 2
7 9
0%
TVC Point-of-Sale- Outdoor posters In-store Print Radio Internet Mobile Phone
Materials banners/posters Publications
45
Source: Nielsen Barometer Wave 3

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Health & Beauty:
Health continues to be a key concern for Vietnamese consumers

Top 5 consumer concerns Major Concerns over the next 6 months


Health - Top 10

1) Health
Biggest concern Second biggest concern

2) Increasing food prices


%

$ 3) Increasing utility bills


(gas, electricity, water…) 13
16 14 15 14 14 10 13 12 15
24
4) J
Job
b security
it 15 15 13 14 13 16 12 12 9

VN CN CZ HK PL RU IL HU UA BR
5) Increasing fuel / petrol prices

Which of the following issues concern you in terms of the impact they may
have on your business? Rank the top three issues that concern you where
1=most concern, 2=second most concern, etc...
46
Source: Nielsen Business Barometer,
Barometer Nielsen Consumer Confidence

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Health & Beauty (continued):
Vietnam is ranked as most concerned country when it comes to air
pollution and use of pesticides
% of global consumers concerned % of global consumers concerned
about air pollution about use of pesticides

100 100

21 22 15
24 27
80 34 28 31 30 80
39 37 39 32
45 44 23
43 31
43
60 60 43 46 40
46 51

40 77 76 81 40
73 70 68
64 65 66 59 62
58 60 57 51
51 52 47
20 20 44 40 41
36 35 30

0 0
ID PH GR HK MY CO VE VN CL VN SG TH RO MX GR FR TH VN VE PH LT MX AT ES

Very concerned Quite concerned

47
Source: Nielsen 2H 2009 Global Omnibus Study

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Health & Beauty (continued):
Vietnamese consumers seek natural and safe products

Toilet
o et CCleaner:
ea e Fabcon:
abco Bar
a soap
soap: Green Tea Ingredients
Vim killing germs Comfort Antibac Lifebuoy killing
bacteria

L'occitane

Instant noodles: Instant noodles: Cooking Oil:


Omachi made by Tien Vua good for De Nhat good
potato health for health

Natural Products 48

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Health & Beauty (continued):
Most companies’ corporate social responsibility programs are geared
towards supporting consumer health
health.

Does your company currently have any Which social responsibilities initiatives does your company
initiatives relating to social responsibilities such prioritize?
as: the environment,, local charities,,
education...?
67
63
11%
53
45
39
29

Top 3 Box Priority

Control/reduce carbon-dioxide emission Environmentally- friendly packaging


89%
Energy saving Education
Ch it
Charity C
Consumer h
health
lth b
benefits
fit
Yes No

49

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Vietnam Topline
1st 2nd 1st 2nd
Half Half Half Half
2009 2009 2010 2010
Nielsen Market Index Volume growth records high & stable levels
Volume*
Nielsen Market Index Value growth remains high
Value**
MFR outlook of the Manufacturers continue to see Vietnam as a
market growing market
MFR outlook of own
Own industry will also experience growth
industry

Advertising Spend Advertising levels are expected to pick up

Most manufacturer’s plan to significantly


Hiring levels
increase their hiring levels
Modern Trade
MT contribution expected to increase in 2010
importance
Ni l
Nielsen Vi
Vietnam
t Consumer confidence
C fid h
has b
bounced
dbback
k tto
Consumer top 3 countries
Confidence^
Very Strong Growth: >= +5% Negative: between -1% and -4%
Neutral: between -1 and +1% 50
Growth: between +1 and plus 4% Very Negative: <= -4%
%

* Nielsen Market Index Volume defined as unit change vs. YAGO


** Nielsen Market Index Value defined as dollar change vs. YAGO
^ Nielsen Global Consumer Confidence measure is from 10/08 & is benchmarked vs. the Global Confidence avg. of 84
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Food for thought…

Growth is still on the radar for Vietnam with a number of


areas to keep in mind:

• The younger generation will become an increasingly


important group: wealthier, more sophisticated and
responding to different marketing / promotional strategies
• FMCG growth is still positive and fueled by rebounding
consumer and business leaders confidence
• Both Off & On
On-Premise
Premise increase store numbers & sales
sales,
translating into increasing future in/out home consumption
occasions
• The development
p of modern trade will influence the wayy
people shop and create new category opportunities

51

Page 51
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Food for thought…
Targeted
T t d trade
t d strategies
t t i are needed d d in
i Vi
Vietnam
t
• Modern trade and specific convenience management
systems will need fast development
• Maximizing portfolio efficiency in store will be key to
succeed in the still dominant traditional trade channel
• Rural strategies must be part of long term planning in
Vietnam
Consumers’ needs constantly evolve and one strategy does not fit
all. Marketing strategies will need to stand out as consumers are
bombarded with new messages
• Understand package trends and meet demands of quality and
price conscious consumers
• Invest in NDP to ppropose
p sophistication
p and convenience in
products benefits
• Know the segments in your consumer base (geographies, age…)
52

Page 52
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Thank you

53

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Appendix

54

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


All Country Index

Japan (JP) UK (GB)


Australia (AU)
South Korea (KO) U S (US)
Austria (AT)
Malaysia (MY) Czech Republic (CZ)
Belgium (BE)
Mexico (MX) Hungary (HU)
Brazil (BR)
Netherlands (NL) UAE (AE)
Canada (CA)
New Zealand (NZ) Argentina (AR)
Chile (CL)
Norway (NO) Vietnam (VN)
China (CN)
Philippines (PH) Estonia (EE)
Denmark (DK) Latvia (LV)
Poland (PL)
Finland (FI) Portugal (PT) Lithuania (LT)
France (FR) Russia (RU) Romania (RO)
Germany (DE) Singapore (SG) Egypt (EG)

Greece (GR) South Africa (ZA) Pakistan (PK)

Hong Kong (HK) Spain (ES) Columbia (CO)

India (IN) Sweden (SE) Israel (IL)

Switzerland (CH) Venezuela


e e ue a ((VE))
Indonesia (ID)
Taiwan (TW) Saudi Arabia (SA)
Ireland (IE)
Thailand (TH) Ukraine (UA)
Italy (IT)
Turkey (TR)
55

Copyright © 2010 The Nielsen Company. Confidential and proprietary.


Nielsen’s commitment to deliver you the Bigger Picture in
Vietnam

Senior Leaders of manufacturers in Understanding consumer differences


• Conducted July 2010
Vietnam •Total sample N = 600
• Global online study in 55 countries
• Total sample •Period: May 2nd to 15th 09
p N=57
•ABC
ABC HIB,
HIB males
l & ffemales,
l 20 tto 45 yo
• Period: July 2010

Nielsen Others source of information:


Retail
Audit •Macro Economic data
•Nielsen Omnibus April 2009
•City coverage: HCMC, Hanoi, Danang, •City coverage: 6 cities •Nielsen Global Omnibus
Cantho traditional trade (HCMC, •Vietnam Govt. Statistics Office
• Target respondent: Males/Females Hanoi, CanTho, Nhatrang, •Nielsen Vietnam Census 2009
aged 18-65 years Danang, Haiphong)
• Methodology: face to face interview • Ended period: June 2010
•Total sample N=1500 • Covered 43 FMCG
•Period: 15th Oct to 15th Nov09 categories
56

Copyright © 2010 The Nielsen Company. Confidential and proprietary.