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Vietnam Advertising industry 2009
Transcript of Vietnam Advertising industry 2009
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VIETNAM: UNDERSTANDING OUR OPPORTUNITY
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What youWhat youll see todayll see today
Summary
An overview of a nation
Economic growth
Population trends
Advertising spending and industry growth
Implications and observations
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SummarySummary
Vietnam is a young and developing market, displaying many of the signs ofstrong potential:
A young and vibrant population Industrial growth and a rising GDP
However, the economic environment has slowed growth from the optimisticpredictions of just a few years ago.
But the advertising/communications industry seems ripe for growth as thepopulation becomes more sophisticated in their buying behaviour andincreased penetration of new media.
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Source: Wikipedia
There is amazing potential hereThere is amazing potential here
With a population of over 86 million, Vietnam is the 13th most populouscountry in the world!
And with one of the youngest populations in Asia - more than half the
population under the age of 30, they have decades of spending to go Vietnam is also one of the worlds youngest markets in other ways havingonly begun economic reform in 1986
1 of the fastest growing IT markets and top ten globally - IDC
Vietnam is young, hungry for growth and exposed to the the progress in other
nations which only reinforces their desire for progress.
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Source: Susan J. Adams, PhD - college ofeconomics, Vietnam National University,
Hanoi
But the shine is starting to dullBut the shine is starting to dull
Vietnam will remain one of the fastest growing economies in the world, but will fallshort of its initial medium-term plans to grow 7-8 percent per year to achieve theMillennium Development Goals by 2015.
Vietnam was growing faster than the rest of the world, but now will see about 2-2.5 percentage points less of GDP growth in the next two years.
It is predicted that export growth will weaken. Vietnam was inflating at double digit rates, but the economic slowdown will enable
Vietnam return to single digit inflation. Trade and budget deficits are high but expected to drop in 2009
Due to the cash economy here (little reliance on credit), the global economic crisis has
been slower to Vietnam as weve needed to wait until MNCs reduced theirinvestment level to see an impact. As such, recovery is expected to follow thesame pattern.
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Source: TNS "Vietnam- Emerging Tiger"
report, 2009
A closer look at the populationA closer look at the population
While the population is still heavily rural (73%), GDP is growing at a rapidpace.
Since 2006, GDP has grown by over 25%
Growth in the highest income segments (A&B) has tripled between 2001and 2008
And socially, they are ready to grow
They are one of the worlds most optimistic populations and the first in Asia
And one of the worlds most literate populations - 94%
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Source: Nielsen Vietnam Business Barometer
2009
In the next 12 18 months, to what extent will you look to rural Vietnam areas to drive your companygrowth?
64% 64%
There is optimism about rural growthThere is optimism about rural growth
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A 1st world economy within decades?A 1st world economy within decades?
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Sources: Wage growth, 2007 Economic Intelligence Unit , 2008-9 HRBS Asia-Pacific Pay Increase Guide 2009 (Survey Period: Jan 6 toFeb 6, 2009) ; Consumer Confidence, Nielsen Global Online Survey 2007-8; GDP Growth ; Inflation, 2006-2007 data from IMF
And CIEC: 2008-2010 IMA Asia Brief December 2008; Unemployment , 2007 est. 2008 CIA. ; FMCG Growth, NielsenVietnam Retail Audit.
GDP Growth
+6.2%2008
+5%2009E
+ 8.5%2007
+8.5%2007
+23%2008
Inflation
+11%2009E
+ 11.22007
+42008
+102009
Wage Growth
Unemployment
5.1%2007
4.3 %2008
5 %2009
+102007
+ 42008
+ 92009 Feb
FMCG Growth
+22007
June 08
Consumer Confidence
Nov 08
-11
-9
118 points
106 points
Rank 9th globally
97 points
Despite inflation, Vietnam is enjoying growth!Despite inflation, Vietnam is enjoying growth!
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HOW IS THIS IMPACTINGCONSUMER BEHAVIOR?
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Source: TNS Consumer Confidence Poll
Jan. 09
Shifting prioritiesShifting priorities
Whether its the economy or a spending conscious environment, there is animpact on the populations outlook.
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Source: TNS Consumer Confidence Poll -
Jan. 09
Despite negative trends, consumers are positiveDespite negative trends, consumers are positiveabout their standard of livingabout their standard of living
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Source: TNS Consumer Confidence Poll
Jan. 09
Will you reduce spending this year?Will you reduce spending this year?
And yet, according to the General Statistics Office of Vietnam, In Q1 of thisyear, retail sales are up by 21.9% equivalent to 6.5% in real terms yr-on-yr
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Source: TNS Consumer Confidence Poll
Jan. 09
Where are spending decreases predicted?Where are spending decreases predicted?
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Food price increases is the biggest concern forFood price increases is the biggest concern forconsumersconsumers
Q40: To what extent are you concerned about the following?Base: All respondents (n= 300) HCM= HN= 150
Consumers General Concerns
Global economy
Saving
Low increase in salary
How to take care of my children
How to develop own business
Future of my children
Price increase in petrol
Pollution
Price increase in daily food
Nielsen Vietnam Omnibus 2009
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Source: Nielsen Vietnam Business Barometer
2009
Total(n=61)Do you anticipate that Vietnamese consumers will change theirpurchasing behaviour next 6 to 12 months?
Expected changes in consumers purchase behavior
Which industry do you think will be impacted the most?
Categories most affected
How are businesses feeling about the market?How are businesses feeling about the market?
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Source: Nielsen Vietnam Business Barometer
2009
Total Market Your IndustryOver the next 6 to 12 months, do you believe that business conditions in the total market & your industry aremore likely to improve or deteriorate?
But businesses are expressing confidence inBut businesses are expressing confidence inthemselves!themselves!
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Source: Nielsen Vietnam Business Barometer
2009
Note: IA = Industry Average
*
Company versus Industry average growth rate (next 12 months)
Manufacturers are showing optimism aboutManufacturers are showing optimism aboutgrowthgrowth
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Source: Nielsen Vietnam Business Barometer
2009
Over the next 6 to 12 months, how do you anticipate your company's hiring of staff to change?
27% 27%
And their hiring plans will help spur economicAnd their hiring plans will help spur economicgrowth!growth!
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INDUSTRY FORECAST
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Advertising spend breakdownAdvertising spend breakdown
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Advertising is a growing industry here!Advertising is a growing industry here!
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Online spending (000) is growing!Online spending (000) is growing!
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Source: Nielsen Vietnam Business Barometer
2009
Over the next 6 to 12 months, how do you anticipate your company's spend on advertising tochange?
39% 39%
Businesses have mixed opinions on advertisingBusinesses have mixed opinions on advertisinggrowth thoughgrowth though
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Implications and observationsImplications and observations
While Vietnam continues to be seen as a high-potential growth market,businesses are displaying caution.
Unwilling to risk larger investment the way they did a few years ago
Wary of financial commitments
But at the same time, this caution is allowing new entrants into the market suchas Beeline (a new mobile telecom) and Zest ( a wireless internet provider)who are aggressively marketing themselves. I believe this will also spur themarket as advertising standards of quality grow and push many of the low
end competitors out of contention.
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THANK YOU