Vietnam Grocery Report. Vietnam Grocery Report

Transcription

1 Vietnam Grocery Report Annual Update August 2010 Vietnam Grocery Report

2 Executive Summary Vietnam to continue displaying great promise over the next 10 years Young gpopulation p (56% under 30) will join 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 growth in recent years 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, 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 to cover the dynamic and discriminate i i Vietnamese consumer needs Rural would be a mystery land to explore the potential expansion 2

3 Agenda Vietnam Heating Up A young country with positive economic indicators Retail Landscape High sales & store growth FMCG Snapshot Vietnamese Consumer Insights Capturing different consumer shopping behaviors New Trends As the competitive market is always changing, new trends emerging 3

4 Vietnam Heating Up 56% of total population is under 30 years old GDP grows in both urban & rural Vietnam re-gains confidence index in Q and ranked # 2 top confident countries in Q Business leaders show high expectation to their business conditions 4

5 Vietnam country facts Vietnam Notes Population millions Male millions (49.5%) Female millions (50.5%) 5%) Urban 2009 Rural % 70.4% Population growth rate ,06% GDP growth rate 2008 GDP growth rate % 5.3% Inflation rate % Hanoi Haiphong Danang Nhatrang Key cities: Ho Chi Minh (Economic capital) Hanoi (Political capital) Haiphong Danang (the bridge ) Nhatrang Cantho Source: Statistical Handbook of Vietnam 2009 Cantho Ho Chi Minh 5

6 In Vietnam, growth is seen across measurable facts GDP Growth Inflation Wage Growth Unemployment % % % % % % % % 2.9 % E +5.5% 2010E +10% <5 % 2010E E + 10% FMCG Volume Growth + 13% + 15% 118 Consumer Confidence % MAT Jun st Half '08 2nd Half '08 1st Half '09 2nd Half '09 1st Half '10 12pt 9pt 12pt 24pt 8pt 2nd Half ' pt Sources: Wage growth, 2007 Economic Intelligence Unit, 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 ; GDP Growth ; Inflation, data from IMF; And CIEC: IMA Asia Brief December 2010; Asia Development Bank Outlook 2010, 2010E by Vietnam government; ; FMCG Growth, Nielsen; Vietnam Retail Audit.

7 Vietnam shows sharp consumer confidence re-gains and is ranked #2 top confident country in Q H 2010 Nielsen Consumer Confidence Index Vietnam, 2nd most confident 160 Changes 2H10 vs.1h Global average IN ID VN PH NO SG CN AU BR CO CA HK AE MY NZ DK IL SE 0 NL CH PK AR TH MX ZA PL RU FI US AT BE TW DE UA GB EG CZ TR IT ES IE HU FR EE LV KO JP LT Base : All respondents n=

8 A young population means an increase in purchasing power as it joins and progresses in the workforce Total Vietnam Population Male Vietnam 2009 Female Population under 30 years old: 56% General Economy: Population Source: U.S. Central Bureau, International Database 0 1,000 2,000 3,000 4,000 5,000 8

9 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 20, , Expected 2010 Labor force ('000 individuals) Source: Government s General Office of Statistics ( gov vn) 9

10 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? st half nd half st half % % 60% 40% 20% %+ 21% - 25% 16% - 20% 11% - 15% 6% - 10% Less than 5% 0 Est. Next 12 months GDP growth rate 0% 4 5 All industry est growth rate nd half st half Source: Nielsen Business Barometer 10

11 The workforce numbers and advertising spending are expected to increase to a good degree Over the next 6 to 12 months, how do you anticipate your company's work force numbers to change? Over the next 6 to 12 months, how do you anticipate your company's spending on advertising to change? 100% 80% 60% Increase significantly (5) Increase somewhat (4) Remain the same (3) 40% 53 Reduce somewhat (2) 20% 0% st Half st Half Reduce significantly (1) 100% 80% 60% 40% 20% 0% Source: Nielsen Business Barometer st half st half Increase significantly Increase somewhat Remain the same Reduce somewhat Reduce significantly 11

12 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

13 Retail Structure Change 13

14 The leading 6 cities account for 37% of Vietnam FMCG sales. Rural areas provide greater FMCG contribution to total Vietnam s sales as this is where a majority of the population lie National FMCG Retail Market Structure CITIES CITIES CITIES 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 (FMCG sales + Other retail sales such as Durable goods) from Government Statistics Page 14

15 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 145% 151% 157% Urban Rural 100% 100% 104% 102% 109% 106% 114% 109% 119% 113% 127% 117% 136% 120% 123% 127% 137% Growth rate is calculated based on constant prices 1994 excluding inflation E Source: Government Statistics Offices 15

16 Business leaders also plan to expand their business to rural areas In the next months, to what extent will you look to rural Vietnam areas to drive your company growth? 100% Increase significantly 80% Increase somewhat 60% Neither increase nor decrease 40% Decrease somewhat 20% Decrease significantly 0% st half nd half st half Source: Nielsen Business Barometer 16

17 Within channel types, Off-Premise continues increasing both in store numbers and sales especially in urban cities, which indicates an opportunity for in-home consumption products Store number (000s) by tier FMCG Value % Contribution by tier Off Premise +3% On Premise +14% +3% % 47% +12% 46% -1% % +15% 4% 11% +14% 9% +3% +5% 38% 41% +19% +8% Off Premise On Premise 6 Cities 30 Cities 53 Cities Rural VN Source: Nielsen Retail Census 2009 % Growth vs. YA 17

18 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. Store number and ACV growth by channels in Off and On channel in Vietnam 2009 Store % Store growth % ACV growth vs Store % Store growth % ACV growth vs. OFF PREMISE Number vs. YA YA ON PREMISE Number vs. YA YA Modern Trade Café 241, Trad. Grocery 501, Eatery 171, Street Vendor 10, Sidewalk Eatery 10, Personal Store 19, Res. Vietnamese 9, Market Stall 83, Billiard Centre 11, Cosmetic Store Karaoke 6, Beverage Store 19, Others 52, MBS 1, Cigarette Kiosk 20, Note: ACV = All Commodity Value (Store turnover) Pharmacy 15, Other 6, Source: Nielsen Retail Census

19 In 2009 shoppers only slightly increased their store repertoire Number of Supermarket/ Hypermarket Used Stores Used in Past 4 Weeks store stores stores stores stores 1 1 Average/(shops) Base: All Supermarket/Hypermarket shoppers (2008 n=1494, 2009 n=1466) Source: Nielsen Shopper Trend

20 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 Hypermarkets Hypermarkets 2 5 Supermarkets Supermarkets Wet Markets Wet Markets Source: Nielsen Shopper Trend

21 The increased spend probably comes from a higher % of fresh foods being purchased from Modern Trade versus last year Supermarket Cont. % (2008 report) % (2008 report) 7% 9% 7% Place of Most Often Purchased by Category Others Confectionery Shops Wet market Liquor Stores Fruit & vegetables Meat or poultry Fish or seafood Snack CSD Dairy products Alcoholic Products Source: Nielsen Shopper Trend 2010 Personal care products Household cleaning products Traditional Grocery Supermarkets Hypermarket 21

22 This can explain why 2010 seems to be the year when manufacturers look for more contribution from Modern Trade nd half 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? st half Now End of '09 Now End of '10 Less than 5% Less than 10% Less than 20% Less than 30% 30% or greater Source: Nielsen Business Barometer 22

23 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 Singapore M alaysia Thailand Philippines Indonesia Vietnam Source: Nielsen Retail Audit - all FMCG, Vietnam Yearly census 23

24 FMCG Snapshot 24

25 Nielsen Vietnam Tracked Categories BEVERAGE HOUSEHOLD CARE PERSONAL CARE FOOD MILK BASED PRODUCTS CIG Ready To Drink Tea Soft Drink Packaged Water Energy Drink Fruit Juice Tonic Food Drink Laundry Product Household Insec. Aerosol Household Insec. Coil Fabric Softener Household Cleaners Dishwashing Liquid Hair Conditioner Personal Wash Toothbrush Body Cream Lotion Shampoo Deodorants Toothpaste Facial Care Products Biscuits Gums Instant Noodles Cooking Oil Sauces MSG-Bouillon Snack Sweetened Condensed Milk Milk Powder Ready To Drink Milk Cigarette Tea Bag Tissue Repellent Feminine Protection 25

26 Value consumption increases across super groups with a positive picture from Beverage products MATLY FMCG VALUE CONTRIBUTION - 6 CITIES TT MATTY MAT JUN09 MAT JUN10 Value % Chg YA Volume % Chg YA TtlFMCG Total Personal care 10 3 Household care 13 5 Milk Based Product 6 8 Food Beverage (excluding Beer) Cigarette 16 8 Source: Vietnam Retail Audit Tracking, ended period Jun

27 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 Source: Nielsen VN Retail Audit Tracking, ended period Jun

28 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

29 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, ,154 3,243 67% 63% 2,411 2,098 67% 2,180 66% 2,587 1,549 Total Low Medium High Source: Shopper Trends

30 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? st half nd half st half Trade up to more premium/indulgent products Change channel to save money Purchase more on promotion Trade down to cheaper products Purchase more local/ Vietnamese brands Buy bigger packs to save money Buy smaller packs of the same products 51 Not buy some 'nonessentials' 27 Purchase more on promotion 41 Buy bigger packs to save money 39 Buy bigger packs to save money 24 Change channel to save money 37 Purchase more on promotion Trade down to cheaper products Not buy some 'nonessentials' Buy less / smaller packs of the same products Change channel to save money Trade up to more premium/indulgent products Source: Nielsen Business Barometer Not buy some 'nonessentials' Trade up to more premium/indulgent products Trade down to cheaper products

31 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 Source: Nielsen VN Retail ilaudit latest t period Jun10 31

32 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 SENSITIVITY PRICE AWARENESS ADOPTION 11% Changes stores based on best 64% Vietnamese consumer are promotion offered 55% Seldom change stores but when shopping, actively searching for promotions aware of price changes 20% seldom try new things 65% try new brands/things but usually stick to my favorite Source: Nielsen Shopper Trend

33 However consumers behave differently in different regions HCMC Hanoi Promotion Price Saigonese consumer favor multiple promotion types Price promotions alone won t appeal to Saigonese The role of advertising is more critical. Hanoians also claim to respond better to in store promotions and after sales service Hanoian strongly prefer one type of promotion: PRICE Adoption Saigonese are early adopters (1 in 5 people from HCMC are early adopters Hard to build initial trial (1 in 10 people from HN are early adopters) Source: Nielsen HCMC & HN consumer differences Jun09 33

34 Emerging Trends 34

35 Emerging trends in summary Getting sophisticated Getting Connected Convenience (4) Private Label (3) Refill (2) Health & Beauty Big Pack (1) 35

36 Smart shopping: (1) Consumers are upsizing Do you anticipate that Vietnamese consumers will change their purchasing behavior in next 6 to 12 months? Total 6 cities_tt +/- Volume % Share vs. YA - MATTY Purchase more local/ Vietnamese brands Buy bigger packs to save money Purchase more on promotion Fabclean >2Kg +3% pts Granules >300gm Change channel to save money % pts Not buy some 'nonessentials' Trade up to more premium/indulgent products Trade down to cheaper products Skin Cleaning >400ml +7.4% 74% pts Source: Business Barometer Wave 3 (Q2.2010), 2010) Nielsen VN Retail Audit latest period Jun10 36

37 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 Floor Cleaner +0.4% pts +4.2% pts Source: Nielsen VN Retail Audit, latest period Jun10 37

38 Smart Shopping: (3) Consumers awareness to Private Labels goes up, driven by Coop- mart and Wow Awareness level of Private Labels % Awareness Coop Mart 28 Wow (Big C) 25 ebon (Big C) (Food products) 13 Metro Quality 8 Comi (Metro SPM, milk) 6 Casino (Big C) 6 Aro (Metro) 3 Tarrington House (Metro) Metro (Metro SPM, rice/dishwashing liquid/laundry detergent,etc.) Base: Hypers/Supers (n=1466) Fivimart (Food products) Source: Shopper trend

39 Smart Shopping: (4) Ease of access and consumption is driving channel and product choices Choice of place Choice of product Derived Importance Ranking of Supermarket Store Attributes Package Contribution Ready to Drink Beverage Convenient to get to 0.52 Wide range of fresh meat & fish 0.40 High quality fresh food 0.38 Source: Nielsen Shopper Trend 2010, Nielsen VN Retail Audit latest period Jun10 39

40 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 Source: Nielsen VN Retail Audit, latest period Jun10 40

41 Getting Sophisticated (continued): Consumers also start seeking specific product benefits Feminine Protection Specific products for male Deodorant Shampoo Source: Nielsen VN Retail Audit, latest period Jun10 41

42 Getting Sophisticated (continued): More products are becoming non-exclusive. No matter what industry you re in Tickle women with a price discount and assure men of quality Important shopping considerations Product quality Cigarettes Beer Razors Wine Life Insurance Laptop/PC p Credit cards TVs Toothpaste Mobile phones Bar Shampoo Soap Deodorants Beer Shower gel Facial Hair Cleanse Conditioner Milk r Lipcare Body cream/ lotion Anti-shadow eyes cream Moisturizer Sun block Hygiene wash Durability Functions Vietnamese brand After sale services Discounted price Promotions Males Females 59 Source: Nielsen Study on Gender Difference Jun10 42

43 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 VN CN ID IN PH SG TH HK MY TW AU NZ JP KO AP Average Base : All respondents n=7014 Source: Nielsen Global Omnibus study 43

44 Getting Connected (continued): Internet and social networks are very important for the younger generation % Access Internet HCM+HN years old Source: Nielsen Omnibus April09, Nielsen Gen V Study Oct

45 Getting Connected (continued): The internet could be the next media platform apart from other traditional media forms 100% 80% 40% Over the next 6-12 months, how do you anticipate your company's spending on the following media channels for advertising? Increase significantly Increase Somewhat 60% Remain the same 20% 0% TVC Point-of-Sale- Materials Outdoor posters In-store banners/posters Print Publications 59 Source: Nielsen Barometer Wave Radio Internet Mobile Phone Reduce somewhat Reduce significantly No spending on this channel 45

46 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 ) 4) Job security ) Increasing fuel / petrol prices VN CN CZ HK PL RU IL HU UA BR 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... Source: Nielsen Business Barometer, Nielsen Consumer Confidence 46

47 Health & Beauty (continued): Vietnam is ranked as most concerned country when it comes to air pollution and use of pesticides % of global consumers concerned about air pollution % of global consumers concerned about use of pesticides ID PH GR HK MY CO VE VN CL VN SG TH RO MX 0 GR FR TH VN VE PH LT MX AT ES Very concerned Quite concerned Source: Nielsen 2H 2009 Global Omnibus Study 47

48 Health & Beauty (continued): Vietnamese consumers seek natural and safe products Toilet oetceae Cleaner: Fabcon: Bar soap: Vim killing germs Comfort Antibac Lifebuoy killing bacteria Green Tea Ingredients 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

49 Health & Beauty (continued): Most companies corporate social responsibility programs are geared towards supporting consumer health. Does your company currently have any initiatives relating to social responsibilities such as: the environment, local charities, education...? 11% Which social responsibilities initiatives does your company prioritize? Z Top 3 Box Priority Yes No 89% Control/reduce carbon-dioxide emission Environmentally- friendly packaging Energy saving Education Charity Consumer health benefits 49

50 Vietnam Topline Nielsen Market Index Volume* Nielsen Market Index Value** MFR outlook of the market MFR outlook of own industry Advertising Spend 1 st 2 nd 1 st 2 nd Half Half Half Half Volume growth records high & stable levels Value growth remains high Manufacturers continue to see Vietnam as a growing market Own industry will also experience growth Advertising levels are expected to pick up Hiring levels Modern Trade importance Nielsen Vietnam Consumer Confidence^ Most manufacturer s plan to significantly increase their hiring levels MT contribution expected to increase in 2010 Consumer confidence has bounced back to top 3 countries Very Strong Growth: >= +5% Negative: between -1% and -4% Neutral: between -1 and +1% Growth: between +1 and plus 4% Very Negative: <= -4% 50 * 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

51 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-Premise increase store numbers & sales, translating into increasing future in/out home consumption occasions The development of modern trade will influence the way people shop and create new category opportunities 51 Page 51

52 Food for thought Targeted trade strategies t are needed d in Vietnam 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 propose p sophistication and convenience in products benefits Know the segments in your consumer base (geographies, age ) 52 Page 52

53 Thank you 53

54 Appendix 54

55 All Country Index Australia (AU) Austria (AT) Belgium (BE) Brazil (BR) Canada (CA) Chile (CL) China (CN) Denmark (DK) Finland (FI) Japan (JP) South Korea (KO) Malaysia (MY) Mexico (MX) Netherlands (NL) New Zealand (NZ) Norway (NO) Philippines (PH) Poland (PL) Portugal (PT) UK (GB) U S (US) Czech Republic (CZ) Hungary (HU) UAE (AE) Argentina (AR) Vietnam (VN) Estonia (EE) Latvia (LV) 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) Indonesia (ID) Ireland (IE) Italy (IT) Switzerland (CH) Taiwan (TW) Thailand (TH) Turkey (TR) Venezuela e a( (VE) Saudi Arabia (SA) Ukraine (UA) 55

56 Nielsen s commitment to deliver you the Bigger Picture in Vietnam Senior Leaders of manufacturers in Vietnam Total sample N=57 Period: July 2010 City coverage: HCMC, Hanoi, Danang, Cantho Target respondent: Males/Females aged years Methodology: face to face interview Total sample N=1500 Period: 15 th Oct to 15 th Nov09 Conducted July 2010 Global online study in 55 countries Nielsen Retail Audit City coverage: 6 cities traditional trade (HCMC, Hanoi, CanTho, Nhatrang, Danang, Haiphong) Ended period: June 2010 Covered 43 FMCG categories Understanding consumer differences Total sample N = 600 Period: May 2nd to 15th 09 ABC HIB, males & females, 20 to 45 yo Others source of information: Macro Economic data Nielsen Omnibus April 2009 Nielsen Global Omnibus Vietnam Govt. Statistics Office Nielsen Vietnam Census