Vietnam Business Outlook

Vietnam Business Outlook

Vietnam Grocery Report

August 2010

2

Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Agenda

1. Vietnam Heating UpA young country with positive economic indicators

2. Retail LandscapeHigh sales & store growthFMCG Snapshot

3. Vietnamese Consumer InsightsCapturing different consumer shopping behaviors

4. New TrendsAs the competitive market is always changing, new trends emerging

3


Senior Leaders of manufacturers in Vietnam• Total sample N=57• Period: July 2010

• Conducted July 2010• Global online study in 55 countries

Understanding consumer differences•Total sample N = 600•Period: May 2nd to 15th 09•ABC HIB, males & females, 20 to 45 yo

•City coverage: HCMC, Hanoi, Danang, Cantho• Target respondent: Males/Females aged 18-65 years• Methodology: face to face interview•Total sample N=1500•Period: 15th Oct to 15th Nov09

Others source of information:

•Macro Economic data•Nielsen Omnibus April 2009•Nielsen Global Omnibus•Vietnam Govt. Statistics Office•Nielsen Vietnam Census 2009

•City coverage: 6 cities traditional trade (HCMC, Hanoi, CanTho, Nhatrang, Danang, Haiphong)• Ended period: June 2010• Covered 43 FMCG categories

NielsenRetail Audit

Research Design

4


Executive Summary• Vietnam to continue displaying great promise:

– Young population (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 Vietnamese consumer needs

– Senior business leaders predict dynamic changes within Vietnam– Moving from a ‘premiumization’ trend to ‘promotional-junkie

behavior’ within 2009– Now a ‘buy Vietnam products’ trend is occurring

5


1. 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

•Key concerns of businesses center around price increases/ inflation and labor shortage

7


118 106 97 85109 101

119

2007 1st Half'08

2nd Half'08

1st Half'09

2nd Half'09

1st Half'10

2nd Half'10

▼12pt

▼9pt

▼12pt

▼8pt

▲24pt

In Vietnam, growth is seen across measurable facts

•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.

GDP Growth

+6.2%2008

+5.3%2009

+ 8.5%2007 +8.5%2007

+23%2008

Inflation

+6.9%2009

+11.22007

+42008

+102009

Wage GrowthUnemployment5.1%2007

4.3 %2008

2.9 %2009

+5.5%2010E +10%2010E

Consumer Confidence

<5 %2010E +12.32010E

FMCG Volume Growth

10%

4%

13%15%

2007 2008 2009 MAT Jun10

+

+

+ +

▲18pt

8


113108 105

101 99 98 98 98 97 97 97 94 93 92 9288 88

79 78 7873 73

69 6863 61

119119113 112109 107

102 101

6559

5556 52

129

88 87 8785 84 84 81

71

0

20

40

60

80

100

120

140

160

IN ID VN PH NO SG CN AU BR CO CA HK AE MY NZ DK IL SE 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

Global average

Changes 2H10 vs.1H10

2H 2010 Nielsen Consumer Confidence Index

Vietnam shows sharp consumer confidence re-gains and is ranked #2 top confident country in Q2.2010

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▲ ▲ ▲ ▲ ▼ ▲ ▲ ▼ ▼ ▲ ▲ ▲ ▼ ▲ ▲▲▲▲ ▲ ▲ ▲ ▼ ▲ ▲ ▲▲▲ ▲ ▼ ▼ ▼ ▲▲ ▼ ▼ ▼ ▲ ▼ ▼ ▲▲ ▼ ▼ ▲ ▲ ▲

Base : All respondents n=26995

Vietnam, 2nd most confident

93

9


So far in 2010, manufacturers have mostly performed at least on parity with their targets. Significantly stronger than 2nd half of 2009 ~ 70% vs. 86%.

4 2

25

12

30

40

26

14

23

23

0%

20%

40%

60%

80%

100%

2009 2nd half 2010 1st half

Significantly better

Somewhat better

On par with target

Somewhat worse than target

Significantly worse than target

Business performance compared to overall target

Q5: Looking back at the first few months of the year, how well do you think your business has been doing compared to your overall targets?

10


Business conditions in Vietnam have been improving well since 1 year ago.

113 2

49

24

9

15

30

30

21

54

4 5

41

3

0%

20%

40%

60%

80%

100%

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

Improved significantly

Improved somewhat

Remained the same

Deteriorated somewhat

Deteriorated significantly

Business Conditions in Vietnam (Now vs Year Ago)

Q6a: Compared to the same time last year, do you think business conditions in Vietnam have improved or deteriorated?

11


Source: Nielsen Business Barometer

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 months?What do you think your industry growth rate will be for the next 12 months?

5.0

10.2

11.3

5.7

13.6

4.9

0

2

4

6

8

10

12

14

Est. Next 12 months GDPgrowth rate

All industry est growth rate

%

2010 1st half

2009 1st half 2009 2nd half

4 5

17 14

1712

20

17

2131

23

11

0%

20%

40%

60%

80%

100%

2009 2nd half 2010 1st half

25%+

21% - 25%

16% - 20%

11% - 15%

6% - 10%

Less than 5%

What do you think your company growth rate will be for the next 12 months?

12


Therefore businesses will continue to spend…

122

21

11

29

43

32

7

43

2

0%

20%

40%

60%

80%

100%

2009 1st half 2010 1st half

Increasesignificantly

Increasesomewhat

Remain thesame

Reducesomewhat

Reducesignificantly

Over the next 6 to 12 months, how do you anticipate your company's spending on advertising to change?


13


What are the top concerns of senior leaders?

Source: Nielsen Business Barometer Base: All respondents

8) Foreign Investment Slowdown (12%)

Q12: Which of the following issues concern you in terms of the impact they may have on your business? Rank the top three (3) issues that concern you where 1=most concerned, 2= second most concern and so on.

7) Wage Growth (13%)

6) Labor force skill shortage (18%)

5) Inflation (24%)

4) Low GDP Growth (33%)

3) Price increases (37%)

2) Global Economic Crisis (38%)

1) Competitive pressure / activity / growth (40%)

2009 2nd half2009 1st half1) Competitive pressure /

activity / growth (68%)

2) Ability to pass on price increase (45%)

3) Inflation (42%)

4) Low GDP growth (31%)


6) Labor force skill shortage (24%)

7) Petrol prices (16%)

8) Others (Exchange rate, policies…) (13%)

2010 1st half 2010 1st half

1st Half 2010

3) Inflation (56%)


4) Labor force/ skill shortage (29%)

1) Competitive pressure/activity / growth (68%)

2) Ability to pass on price increase (59%)

8) Others (Government regs, currency depreciation (10%)

6) Wages growth (12%)

5) Petrol prices (22%)

14


Labor shortage is definitely a concern of businesses in Vietnam

1 211 2

53

30

31

4

46

11

0%

20%

40%

60%

80%

100%

2009 1st Half 2010 1st Half

Increasesignificantly(5)

Increasesomewhat (4)

Remain thesame (3)

Reducesomewhat (2)

Reducesignificantly(1)

Over the next 6 to 12 months, how do you anticipate your company's work force numbers to change?


15


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

General Economy: PopulationSource: U.S. Central Bureau, International Database

0 1,000 2,000 3,000 4,000 5,000

0 - 4 5 - 9

10 - 1415 - 1920 - 2425 - 2930 - 3435 - 3940 - 4445 - 4950 - 5455 - 5960 - 6465 - 6970 - 7475 - 79

80+

010002000300040005000

FemaleMale Vietnam 2009Total Vietnam Population

Population under 30 years old: 56%

16


0

10,000

20,000

30,000

40,000

50,000

60,000

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

Labor force ('000 individuals)

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

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

402 440552

725835

1,0241,074

1,200

2000 2002 2004 2006 2007 2008 2009 Expected2010

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

17


2. 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

18


Retail Structure Change

19


Page 19Page 19

National FMCG Retail Market Structure

The leading 6 cities account for 39% 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

7461

46

27

5

5

4

14

7

9

11 22

1425

39 37

0

20

40

60

80

100

Population 2007 Store 2009 FMCG ACV 2009 Retail SalesEstimated

6 CITIES

30 CITIES

53 CITIES

RURAL

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 2006

20


Business leaders also plan to expand their business to rural areas

4 2

32

2526

51

53

1318

58

17

0%

20%

40%

60%

80%

100%

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

Increase significantly

Increase somewhat

Neither increase nor decrease

Decrease somewhat

Decrease significantly

In the next 12 – 18 months, to what extent will you look to rural Vietnam areas to drive your company growth?


21


2009OFF PREMISE

Store Number

% Store growth vs. YA

% ACV growth vs.

YA

Modern Trade 752 45 63

Trad. Grocery 501,135 6 16

Street Vendor 10,717 -23 -19

Personal Store 19,055 3 4

Market Stall 83,700 -4 0

Cosmetic Store 893 -9 -4

Beverage Store 19,327 6 0

MBS 1,566 -36 -24

Cigarette Kiosk 20,602 -14 -29

Pharmacy 15,518 0 9

Other 6,130 1 3

2009ON PREMISE

Store Number

% Store growth vs. YA

% ACV growth vs.

YA

Café 241,478 4 3

Eatery 171,673 4 8

Sidewalk Eatery 10,068 -3 -1

Res. Vietnamese 9,826 -2 0

Billiard Centre 11,659 -27 -22

Karaoke 6,537 -15 -4

Others 52,802 -4 -1

Store number and ACV growth by channels in Off and On channel in Vietnam

Source: Nielsen Retail Census 2009

Modern Trade grows fast through store numbers and overall sales per store, while Traditional Trade is still dominating

Note: ACV = All Commodity Value (Store turnover)

22


Average Frequency of Visits per month

3.3

28.1

1.2

25.2

3.3

1.4Hypermarkets

Supermarkets

Wet Markets

2008 2009

Consumers have increased spend per visit in the MT channel

2

21

77

5

43

51

Hypermarkets

Supermarkets

Wet Markets

Trade Sectors Where Shoppers Spend the Most Money

Source: Nielsen Shopper Trend 2010

23


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

4 2 2 8 7 134

15 1619 17 17

24 32

56

29

63 60

277

78 81 81

4 4 1 4 1 61

5453

1819

60

5 2 2 11 2 2

0

20

40

60

80

100

Fruit &vegetables

Meat orpoultry

Fish orseafood

Snack CSD Dairyproducts

AlcoholicProducts

Personalcare

products

Householdcleaningproducts

Others

Confectionery Shops

Wet market

Liquor Stores

Traditional Grocery

Supermarkets

Hypermarket


Supermarket Cont. % (2008 report)

Place of Most Often Purchased by Category

7% 9% 7%

24


Modern Trade Contribution to Sales RevenueQuestion: 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?


This can explain why 2010 seems to be the year when manufacturers look for more contribution from Modern Trade

Less than 5% (2.5) 5% - less than 10% (7.5)

10% - less than 20% (15) 20% - less than 30% (25)

30% or greater (35)

26 20

2530

23 21

13

13 15

15

Now End of '09

2009 2nd half

22 17

1215

46

29

15

210

27

Now End of '10

2010 1st half

Mean score 13.8% 14.8% 13.3% 16.4%

25


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

89

48 4335

9

5145

36

10

91

51 48 4637

1011

46

90

48

Singapore M alaysia Thailand Phil ipp ines Indonesia V iet nam

Share of trade for modern self-service outlets

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

26


FMCG Snapshot

27


Nielsen Vietnam Tracked Categories

PERSONAL CARE

Hair Conditioner

Personal Wash

Shampoo

Deodorants

Toothpaste

Facial Care Products

Repellent

Body Cream Lotion

Toothbrush

Feminine Protection

BEVERAGE

Energy Drink

Ready ToDrink Tea

Soft Drink

Tonic FoodDrink

Fruit Juice

PackagedWater

Tea Bag

HOUSEHOLD CARE

Fabric Softener

Laundry Product

Household Insec. Aerosol

Dishwashing Liquid

Household Cleaners

Household Insec. Coil

Tissue

FOOD

Gums

Biscuits

MSG-Bouillon

Instant Noodles

Cooking Oil

Sauces

Snack

MILK BASEDPRODUCTS

Milk Powder

SweetenedCondensed Milk

Ready ToDrink Milk

CIG

Cigarette

28


Value consumption increases across super groups with a positive picture from Beverage products

FMCG VALUE CONTRIBUTION - 6 CITIES TT

MAT JUN09 MAT JUN10

Source: Vietnam Retail Audit Tracking, ended period Jun2010

MATLY MATTY

Value % Chg YA

Volume % Chg YA

Total FMCG 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

29


Beverage and Food categories are dominating both importance and growth

Top 10 biggest categories – Value % Share Top 10 fastest growing category - value % Chg vs. YAMATTY

TOP FASTEST GROWING CATEGORIES

Source: Nielsen VN Retail Audit Tracking, ended period Jun2010

30


3. Vietnamese Consumer Insights

•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

31


Dynamic changes in Vietnam are afoot. After ‘premium trade-up’ & ‘promotional-junkies’, a ‘purchase Vietnamese’ trend is expected.

5

23

36

39

51

57

54

Not buy some 'non-essentials'

Trade down tocheaper products

Purchase more onpromotion

Buy bigger packsto save money

Buy smaller packsof the same

products

Change channel tosave money

Trade up to morepremium/indulgent

products

Do you anticipate that Vietnamese consumers will change their purchasing behavior next 6 to 12 months?

16

16

21

24

27

48

31


products


Buy less / smallerpacks of the same

products





2009 2nd half2009 1st half

22

22

22

37

41

49

44



products





Purchase morelocal/ Vietnamese

brands

2010 1st half


32


As already evidenced by strong share gains amongst some Vietnamese brands

Source: Nielsen VN Retail Audit –latest period Jun10

+7.3 pts +6 pts

Dr. Thanh

(Ready to Drink Tea)

Vinamilk Fresh Milk

(Liquid Milk)

+3 pts

Diana Sieu Tham

(Napkin)

Vinh Hao

(Carbonate Soft drink)

+2.4 pts

Fastest Volume % Share Gain – 6 cities-TT

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

33


PROMOTIONSENSITIVITY

PRICEAWARENESS ADOPTION

11% Changes stores based on best promotion offered

55% Seldom change stores but when shopping, actively searching for promotions


64% Vietnamese consumer are aware of price changes

20% seldom try new things

65% try new brands/things but usually stick to my favorite

Shopping Dynamics

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

34


• 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

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

HanoiHCMC

Promotion

Price

Adoption

• Saigonese consumer favor multiple promotion types

• Price promotions alone won’t appeal to Saigonese

• Saigonese are early adopters (1 in 5 people from HCMC are early adopters

Source: Nielsen HCMC & HN consumer differences Jun09

However consumers behave differently in different regions

35


4. Emerging Trends

36


Emerging trends in summary

Health &Beauty

Getting sophisticated

Getting Connected

Big Pack(1)

Refill(2)

PrivateLabel

(3)

Convenience(4)

37


Smart shopping:(1) Consumers are upsizing

Do you anticipate that Vietnamese consumers will change their purchasing behavior in next 6 to 12 months?

22

22

22

37

41

49

44



products





Purchase morelocal/ Vietnamese

brands

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

Fabclean>2Kg

+3% pts

Granules>300gm

+2.1% pts

Skin Cleaning >400ml

+7.4% pts

Total 6 cities_TT

+/- Volume % Share vs. YA - MATTY

38


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

Source: Nielsen VN Retail Audit, latest period Jun10

Fabric Softener

+4.8% pts DishwashingLiquid

+0.4% pts

Floor Cleaner

+4.2% pts

Total 6 cities_TT

+/- Volume % Share vs. YA - MATTY

39


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

1

1

1

3

6

6

8

13

25

28

0 5 10 15 20 25 30

Fivimart (Food products)

Metro (Metro SPM, rice/dishwashing liquid/laundrydetergent,etc.)

Tarrington House (Metro)

Aro (Metro)

Casino (Big C)

Comi (Metro SPM, milk)

Metro Quality

eBon (Big C) (Food products)

Wow (Big C)

Coop Mart

% Awareness

Base: Hypers/Supers (n=1466)

Source: Shopper trend 2010

Awareness level of Private Labels

40


0.52

0.40

0.38

Convenientto get to

Wide rangeof fresh meat

& fish

High qualityfresh food

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

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

Derived Importance Ranking of Supermarket Store Attributes

Choice of place

Choice of product

Package Contribution – Ready to Drink Beverage

41


Getting Sophisticated:At the same time, consumers show more interest in personal care by using more advanced products

Deodorant

Lotion

Hair Treatment

29% (17%)

Value % Growth (Volume % Growth)Total 6 cities_TT - MAT TY

39% (32%)

18% (17%)


42


Getting Sophisticated (continued):Consumers also start seeking specific product benefits

Feminine Protection


Specific products for

maleDeodorant Shampoo

44


4741

37 36 3528 28 27

2419 18 15 13

8

33

VN CN ID IN PH SG TH HK MY TW AU NZ JP KO APAverage

%

Base : All respondents n=7014

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

Source: Nielsen Global Omnibus study

% 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

45


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

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

% Access Internet

41

64

HCM+HN 18-25 yearsold

46


Getting Connected (continued):The internet could be the next media platform apart from other traditional media forms

27

7

3420

9

59

25

592

4

2

2

2

2

11

7

9

5 18

2

2

230

32

43 39

34

30

25

29 2027 30

4

34

112

114 5 2 2 7 2

36

36

0%

20%

40%

60%

80%

100%

TVC Point-of-Sale-Materials

Outdoor posters In-storebanners/posters

PrintPublications

Radio Internet Mobile Phone

Increase significantly

Increase Somewhat

Remain the same

Reduce somewhat

Reduce significantly

No spending on thischannel

Over the next 6- 12 months, how do you anticipate your company's spending on the following media channels for advertising?

Source: Nielsen Barometer Wave 3

31%T2B (increase): 47% 24% 32% 32% 6% 41% 13%

13% 11% 11% 5% 20% 2% 4% 4%

47


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

Source: Nielsen Business Barometer, Nielsen Consumer Confidence

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...

Top 5 consumer concerns

1) Health

2) Increasing food prices

3) Increasing utility bills (gas, electricity, water…)

4) Job security

5) Increasing fuel / petrol prices

$24

15 15 14 13 16 12 12 9

1316 14 15 14 14 10 13 12 15

13

VN CN CZ HK PL RU IL HU UA BR

%

Biggest concern Second biggest concern

Major Concerns over the next 6 monthsHealth - Top 10

48


Health & Beauty (continued):Vietnam is ranked as most concerned country when it comes to airpollution and use of pesticides

Source: Nielsen 2H 2009 Global Omnibus Study

77 7664 58 60

73 7081

6857 51

6552

66

21 2234 39 37

24 2715

2839 45

3144

30

0

20

40

60

80

100

ID PH GR HK MY CO VE VN CL VN SG TH RO MX

% of global consumers concerned about air pollution

5947 44

62

40 3651

41 35 30

3243 43

23

43 4631

40 46 51

0

20

40

60

80

100

GR FR TH VN VE PH LT MX AT ES

Very concerned Quite concerned

% of global consumers concerned about use of pesticides

49


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

Toilet Cleaner:Vim killing germs

Fabcon:Comfort Antibac

Bar soap:Lifebuoy killing bacteria

Green Tea Ingredients

Natural Products

L'occitane

Instant noodles:Omachi made by potato

Instant noodles:Tien Vua good for health

Cooking Oil:De Nhat good for health

50


2939

45

5363 67

Top 3 Box Priority

Control/reduce carbon-dioxide emission Environmentally- friendly packaging

Energy saving Education

Charity Consumer health benefits

Z

Does your company currently have any initiatives relating to social responsibilities such as: the environment, local charities, education...?

Which social responsibilities initiatives does your company prioritize?

89%

11%

Yes No

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

51


Vietnam Topline1st

Half 2009

2nd

Half 2009

1st

Half 2010

2nd

Half 2010

Nielsen Market Index Volume*

Nielsen Market Index Value**

MFR outlook of the market

MFR outlook of own industry

Advertising Spend

Hiring levels

Modern Trade importance

Nielsen Vietnam Consumer

Confidence^

* 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

Very Strong Growth: >= +5%

Growth: between +1 and plus 4% Neutral: between -1 and +1%

Negative: between -1% and -4%

Very Negative: <= -4%

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

MT contribution expected to increase in 2010

Most manufacturer’s plan to significantly increase their hiring levels

Consumer confidence has bounced back to top 3 countries

Advertising levels are expected to pick up

52


Key observations• Despite senior business leaders believing Vietnam has now stabilized,

growth is definitely still there to capture • Your competitors & peers are gearing up to attack

– Adding skilled people to their workforce– Using integrated marketing campaigns which utilizes both traditional & newer media

platforms– Looking beyond the more saturated markets of HCMC & Hanoi, and instead now see

the next frontier of growth as Rural Vietnam– Investing and focusing more on Modern Trade outlets

• However, timely reaction to current trends is also vital for success – Consumers now purchase more Vietnamese products

– Need to defend or need to leverage– Effectively control ever-increasing costs by offering innovative & relevant value to

consumers

• To enjoy both growth & to capture market share, aggressive & informed decisions need to be made now

53


Page 53

Foods 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

• The development of modern trade will influence the way people shop and create new category opportunities

54


Page 54

Foods for thought…Targeted trade strategies are needed 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 arebombarded with new messages• Understand package trends and meet demands of quality and

price conscious consumers• Invest in NDP to propose sophistication and convenience in

products benefits• Know the segments in your consumer base (geographies, age…)

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Vietnam Business Outlook

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Transcript of Vietnam Business Outlook