Consumer trends. Ralf Matthaes managing director TNS Vietnam. AMCHAM October, 2008 Condensed version

Transcription

1 Consumer trends 2008 Ralf Matthaes managing director TNS Vietnam AMCHAM October, 2008 Condensed version

2 AMCHAM Consumer trends 2008 Key Consumer trends State of the nation Wealth Inflation Consumption Branding My Dreams Technology Financial Crisis Stock Market Media Rural Vietnam Product Retail

3 The state of the Consumer Nation

4 Vietnam Happiness Index Hanoi & HCMC only Very happy Quite happy Not happy Vietnamese consumers continue to be a very happy lot, indicating that not much has negatively impacted their lives 2006 Source: World value survey: 2008 source: TNS Vietcycle 2008

5 My standard of living Hanoi & HCMC only 2.2 VC Wealthy have reason to smile 52 9 VC VC Much lower than today Equal to today Much higher than today Somewhat lower than today Somewhat higher than today The rich are getting richer & 2/3 rd believe their lot will increase Source: TNS / Gallup - Voice of People Survey

6 Wealth Trends

7 GDP per capita evolution - USD 900 In USD GDP has doubled in 7 years Source: Vietnam Economic Times KINH TE Source: GSOVN

8 SEC Scale A = US $1,001 + B = US $1, C = US $ D = US $ E = US $ F = US $150 below An Urban Upper class is emerging Monthly declared household income % 20% 40% 60% 80% 100% SEC AB SEC CD SEC EF Over a 3 rd of urban households now earn more that US $500 / month, while less than 10% of households can not afford branded products Source: TNS VietCyle urban only

9 Impact of inflation

10 % GDP & Inflation impact on disposable income Source: Vietnam Economic Times KINH TE % Inflation % GDP Growth % Inflation is decreasing Disposable income

11 How Vietnamese Combat inflation (by Income) Buy less Hold off on buying more expensive big ticket items to be able to afford inflationary increase Switch to cheaper brands Use some of savings to pay for higher price Just buy what I usually buy and don't worry about the price increase Total Class CD Class AB Class EF Most consumers are buying less to combat inflation & holding off purchasing big ticket items Source: TNS Gallup 2008 Voice of the People Survey

12 Consumer Spend inflation Impact Total FMCG Total 4 key urban cities mil vnd plus 3.5 mil vnd 14.5 Below 3.5vnd All Households High Income Middle Income Low Income -4.5 % Value Change 06 vs. 05 % Value Change 07 vs High income earners are spending more, but middle income & low income earners are spending much less FMCG Trends % value Changes Source: TNS Worldpanel Asia

13 Consumption Trends

14 FMCG Growth in Asian countries (%) Vietnam is experiencing the second fastest FMCG growth in Asia. However, growth has dropped from 21% in 2006 to 11% in Urban Vietnam National China National Thailand National Taiwan National Malaysia National Korea National Philippines FMCG Trends % value Changes Source: TNS Worldpanel Asia

15 Consumers are Very Price-Conscious! 72% Price is the most important factor when grocery shopping 70% I always compare prices between brands before buying 63% I know the shelf prices of the products I want to buy Mini Life Style TNS Worldpanel Vietnam

16 fastest growing brands 17.0% 11.4% 10.3% 7.9% 7.7% 7.4% 6.4% 5.6% 5.1% 4.7% V V V V V Khong do Vinamilk Trang Tien Sting (Pepsi) Maggi C2 Twister (Pepsi) Vinh Hue Chinsu Aji-Ngon Five of the ten fastest growing brands were Vietnamese in 2007 Source: TNS Worldpanel

17 fastest growing brands 22% 21% 20% 17% 17% 14% 14% 13% 10% 10% V V V V Gillette (Razor) Wonderfarm (Vegtable juice) Pulppy (HandC2 (RTD Tea) Towel) Vinamilk (Drinking Yoghurt) Sting (Energy Drink) Gift (Glass cleaner) Maggi (Soy sauce) Trang Tien (Ice Cream) Cholimex (Ketchup Tomato) (D Share (%) gain in MAT Jun/08 vs. MAT Jun/07 Thus far in 2008, four of the fastest growing brands were Vietnamese and 8 were launched in the last 36 months Source: TNS Worldpanel 2008 (urban only)

18 My dreams

19 Top Desired Purchases All SEC House/Property Car LCD/Plasma TV Air conditioner Washing machine PC/Deskstop Motorbike VC 2008, n=857 VC 2004, n=1,315 VC 2001, n=1,232 Aspirational purchases are in decline as many consumers have already fulfilled their dreams Source: TNS VietCycle

20 Aspriational Purchasing the personal touch I will choose a mobile phone brand which can tell people that I m youthful, fashionable and proactive I want to be recognized as a wealthy and up-todate person, so I buy high quality brands I only buy brands that make me look more mature, sophisticated and confident Source: TNS FGD s

21 Brand impact

22 Advertising Brand Consumer Cycle Preference of Vietnamese brands SEC A SEC B SEC C SEC D SEC E SEC F Stage 5: Self-fulfillment Stage 4: Esteem Stage 3: Social recognition Stage 2: Upgraded needs Today s s Consumer Stage 1: Basic needs

23 Vietnamese brand perceptions are changing My children will be very intelligent and grow-up faster as I feed her by a good quality powder milk. I feel that I am a good mother People say that I am a modern mother because I choose good quality brands for my baby. It shows my great love for my children RECOGNITION I always choose the most expensive detergent which I think it has the best quality and good for my families clothes. I feel happy when my husband says to others that I am a good housewife Source: TNS FGD s

24 Vietnamese brand perceptions I usually buy brands on promotion I switch brands just to try Country of origin is more important than branding Vietnamese Brand perceptions are beginning to mirror more developed countries, further stressing brand strategy Source: TNS VietCyle Urban (HN - HCMC)

25 Summarizing branding Branding in Vietnam is critical because consumers Young Wealthier Aspirational Want what is popular Want what is reliable More sophisticated Still price sensitive The key today is social recognition

26 Technology Trends

27 Technology Embracers HCMC & Hanoi DVD player DVD Player Karaoke Player Karaoke machine Personal Computer Personal computer Mobile Phone Mobile phone VCD Player Video disk VCD Mobile Phone ownership increased by 33% in 2 years Source: VietCycle

28 Mobile music usage By country Global, n=13468 China, n=697 India, n=482 Indonesia, n=376 Thailand, n=457 Vietnam, n=245 USA, n=867 UK, n=485 Russia, n=500 Brazil, n=245 Mexico, n=299 Using digital MP3 player on phone Using AM/FM radio on phone Nett - Using mobile music Huge opportunities exist for Radio in Vietnam via Mobile Source: TNS 2007 GTI

29 Frequency of SMS usage By country Global, Idonesia, SMS marketing opportunities are enormous & need to be explored Source: TNS 2007 GTI

30 In-home Internet penetration In 9 years, In-home internet penetration increased by over 1000%, opening up new marketing & information avenues in Vietnam Source: TNS VietCyle HCMC & Hanoi

31 Financial Crisis!

32 Total Expenditure & Savings HCMC & Hanoi VC-2008, n= VC-2006, n= VC-2001, n= VC-1999, n= % 20% 40% 60% 80% 100% Total expenditures Saving Savings continue to drop, showing Vietnamese overall consumer confidence Source: TNS VietCycle

33 Bank loan this year Total Class AB Class CD Class EF Yes Only 6% have taken out loans in the last 12 months, while 14% of wealthier have classes have done likewise No Source: TNS Gallup 2008 Voice of the People survey

34 Purpose of loans Investing in business 43 Education 23 Repairing/ Upgrading my house Buying real estate Buying transportation Most loans have been invested back into businesses (43%). while home repair / real estate (37%) have been other big investments Source: TNS Gallup 2008 Voice of the People survey

35 Vietnam s s Stock Market

36 Investment in Stock market 370 index- Oct 15, Total Class AB Class CD Class EF Yes 5% of urban consumers have invested in the stock market, but 3 times as many wealthy consumers have No Source: TNS Gallup 2008 Voice of the People survey

37 Reasons for investment in Stock market 22% I don't earn much money and I want to earn additional money through investment 33% I have some free money and don't want the low interest rate of bank saving I see others people do it 45% An emerging trend of Monkey see, Monkey do is Impacting all facets of Vietnamese consumers lives Source: TNS Gallup 2008 Voice of the People survey

38 Satisfaction with profits from Stock market Fully satisfied 4% Not satisfied at all 19% A little satisfied 11% Not very satisfied 22% So-so 44% Only 15% of all investors are happy with their returns Source: TNS Gallup 2008 Voice of the People survey

39 Media Trends

40 Internet Highly under utilized (US $6 mil. / year) Captivated and young audience Radio 36% daily listenership fastest growing media medium in VN Radio & internet are becoming a genuine advertising opportunities Source: TNS Media Vietnam

41 Television Viewership F-T-A down Cable up growth at 16% in 08 vs. 20% in07 Print 713 daily and periodical publications 77% urban population read last week All major newspapers also online TV is over fragmented, while print is becoming more competitive Source: TNS Media Vietnam

42 Asia s s Media Spend Growth % growth as of Sept India Vietnam China Indonesia Malaysia Thailand Philippines Though ad spend is down from 2006, with the continuation of FDI & local success, the industry should continue to grow at about 20% Source: TNS AP offices

43 Vietnam s s Rural Consumer

44 The potential of Rural Vietnam 4 Key Urban Cities Population (%): 9.9 GDP (%): 25.6 Secondary Cities Population (%): 13.6 GDP (%): 11.9 Rural Locations Population (%): 76.5 GDP (%): /3 rd of GDP resides in Rural Vietnam, an untapped market Source: GSO VN

45 Consumers earning more than 1.5 m VND / Month 17,243,688 Urban vs. Rural Household Spend 11,906,356 4,958,760 4,105,640 1,546,280 1,279,680 2,132,800 1,231,692 Total available consumers 1.5mln - 3mln 3mln - 4.5mln > 4.5mln Urban Rural There are 3 times more available consumer in Rural Vietnam than Urban Vietnam Source: TNS Rural Monitor Pilot

46 Rural Durable Ownership 95% Color Television 92% 33% 32% Electronic Cooker Mobile Phone 30% 9% Radio/ Cassette 1% Refrigerator Internet Many household items are permeating Rural Households Source: TNS Rural Monitor Pilot

47 3 Major Product Trends

48 Vietnamese consumers are looking for indulgence health convenience

49 Consumers looking for convenience 80% said Time spent cooking is wasted

50 Consumers looking for health 88% said I am ready to pay a higher price for healthier foods Source: TNS Worldpanel Vietnam Mini Lifestyle 2007

51 Consumers looking for indulgence 89% said I buy brands that are of good quality, even more expensive Source: TNS Worldpanel Vietnam Mini Lifestyle 2007

52 Retailer Trends

53 2008 Vietnam tops A.T. Kearney s annual list of most attractive emerging market retail destinations

54 Retail environment in Asia T M Asia Vietnam Philippines Thailand China Taiwan Korea Traditional Trade Modern Trade Malaysia Though small, Modern trade will grow substantially in Vietnam Source: TNS Worldpanel Asia 2007

55 DISTRIBUTION Sales growth per channel (%) MODERN TRADE DIRECT SALES By 2009, modern trade will take off in Vietnam! ALL RETAILERS 11.8 STREET SHOPS 10.7 MARKET 8.9 SPECIALTY 0.8 Source: TNS Worldpanel: N = 2000 urban Households Excl. Gift MAT P1107

56 Modern Trade emergence 2008 growth MAT Jun/ MAT Jun/ MAT Jun/ Modern Trade Street Shops Wet markets Others Modern trade s value share grew by 26% in 2008 Source: TNS Worldpanel

57 More and more traffic 50%urban households go to shop in MT each month! Keeps growing Penetration per month TOTAL FMCG

58 lead by Supermarkets 30%Supermarkets 12% Cash & Carry 8% Hypermarkets 2% Minimarkets Average Penetration per month

59 What do consumers think of Modern Trade? Not true, actually 8% lower Quality of products 83% More expensive 70% Wide assortment 83% Innovation & promotion 82% Comfortable and Clean/Safe 76% Hard to carry 47% Little advice from staff 40% Far from home 34%

60 As you can see, Vietnam is changing a lot and unfortunately, so am I I Deputy Prime Minister Pham Gia Khiem Hanoi, Jan HCMC, Jan. 2008

61 Consumer trends 2008 synopsis Seven key elements which will impact consumerism Benchmarking or lack thereof Social Recognition key to premium product selection New media mediums Radio & Internet viable, underused Personalized products small but growing Pricing & segmentation essential for now and future Modern trade must have representation Consumer Indulgence, Convenience & Health

62 Thank You / Cam On ralf.matthaes@tns-global.com