1Prepared by:Infocus Mekong Research

Vietnam Consumer Behavior and the Impact of COVID-19

As of December, 1, 2020, there were 1,343 COVID Cases and 35 deaths in

Vietnam, and only 164 active cases

Eurocham: Wednesday December 2, 2020 – Sofitel HCMC

82%

63%

70%

13%

14%

12%

5%

9%

6%

14%

12%

2

Before COVID

After COVID – May

After COVID - July

EMPLOYMENT STATUS

EMPLOYMENT STATUS

Prior to COVID -19, 82% of respondents were employed full-time, while in May only 63% were employed full-time,Increasing to 70% full-time employment by July, is still substantially below pre-COVID levels, Indicating at least 12% ofthe population with less income than before.

Which of the following best describes your present employment status?

45+ year old consumers were the hardest hit with

unemployment spiking 7pts from 8% to 15% (Jan

- July )

Base: n=1,019

Younger consumers (18-24) saw limited change in terms of job loss (full-time

employment only dropping 2pts), however underemployment spiked

to 13pts from Jan.

3

Consumer Confidence

6851

92 92 91 84

22 27

2012 2014 2016 2018 2019 2020 Jan 2020 May 2020 July

4

IFM CONSUMER CONFIDENCE INDEX

Base: All

2020 CONSUMER CONFIDENCE

Index: The index is based on 11 spend categories in terms of spending more – same – less than

previous year . (More + Same) Minus (less of 11 Categories

average) = Index

Before COVID-19 Outbreak

Post COVID-19 Outbreak

Consumer Confidence has dropped to its lowest levels in over 20 years, from January 2020 pre-COVID, 84 Index to only 22 Index in Mayof 2020, and only risen by a mere 5% in two months, indicating a slow recovery, as Consumers spend cautiously.

5

5%

6%

16%

70%

85%

19%

12%

22%

22%

11%

76%

82%

62%

8%

4%

2020 July

2020 May

2020 March

2020 Jan

2019

Better Same Worse

VIETNAM CONSUMERS

What is your view of the overall economy in 2020 as compared to 2019? – (Better – Same – Worse)

VIETNAM ECONOMIC OUTLOOK FOR 2020 – POST CORONA OUTBREAK

3,567

2,964

502

1,023

1,019

Sample size

Before COVID-19 Outbreak

During / After

COVID-19 Outbreak

As expected COVID-19 has had a hugely negative impact on consumers economic outlook for 2020, falling from 70% positive in January 2020 to only 6% in May of 2020. Confidence has slightly improved in July but not significantly.

8,056

6Q.4 what is your single largest fear/ reservation for 2020? (select the top 1 only)

Negative impact of COVID on my business

Unemployment Being infected byCorona Infection

25%TOP THREE FEARS - July 2020

21% 17%

Jan 2020 March 2020 July 2020

Environmental pollution Negative impact of COVID

on my Business Negative impact of COVID

on my Business 26% 25% 25%

Increased inflation Infection of COVID-19 Infection of COVID-1916% 22% 21%

Unemployment Slow down of Vietnam economy Unemployment

11% 12% 17%

Increased Interest rates Global economic slowdown Slow down of Vietnam economy

9% 10% 9%

Base: n=3,987

Consumer concerns have moved from the societal to

personal

7

63%58% 57%

53%50%

31%

39% 37%

23%

64% 63% 61% 61%

47%

41%

31%

25% 25%

Urban Rural

Negative

impact of

Corona Virus

on my

business

Being infected

by Corona

Vietnam

economic slow

down

Unemploymen

t

Global

economic

down turn

Environmental

pollution

Lose by

business /

Bankruptcy

Increased

Inflation

Reduction in

health /

education

services

CONSUMER SENTIMENT URBAN VS RURAL

▪ BIGGESST FEARS FOR 2020

Both Urban and Rural consumers largely have the same concerns for 2020 – the impact of Corona virus.Urbanites are more concerns about Inflation, while Rurals are more concerned about the environment

Date July 2020

8

Purchase behavior

9

2020 CONSUMER SPEND IN TERMS OF GROWTH

Outside of Bank Loans and Utility spend, all other sectors are down substantially from pre-COVID spend. Food&beverage has stayed buoyant over the past few months, while some sectors show mild signs of recovery. Thepurchase of all electric devices continues to fall, as consumer only worry about essential spend.

Base: n=3,987

10Now, considering the impact COVID-19 has had on your business / personal financing, how likely are you going to Purchase the same item in 2020 (MA -1 = Definitely would NOT purchase, 3 = May purchase, may not purchase, 5 = Definitely would purchase)

COVID -19 IMPACT ON BIG (over 50 mil VND) TICKET PURCHASE ITEMS

Every big ticket purchase item has seen a decline in purchase intent since January 2020. Purchase intent has further eroded in July save for Domestic Holidays which held constant, indicating and overall trend of reduction on most expensive purchases

W2: Base: n=1,019; W1: Base: n=1,023

BIG TICKET ITEMS CONSUMERS ORIGINALLY PLANNED TO

PURCHASE IN 2020 %

LIKELIHOOD TO PURCHASE POST-

COVID (AMONG THOSE

WHO ORIGINALLY PLANNED TO BUY)

46% 37% 32% 27% 23% 18% 16% 14% 13% 10% 6%

Domestic Holiday

Motorbike InsuranceNew

BusinessOverseas Holiday

House New Car ApartmentInvest in

Stock Market

Used CarOverseas Education

48%42%

63%

48%

26%

40%45% 42%

60%

38%

57%

48%

33%

54%

40%

13%

27%23% 23%

37%

24%17%

(T2B%)

11

Shopping behavior SHOPPING BEHAVIOR WAVE 1 VS. WAVE 2

During COVId-19’s Social Distancing campaign, On-line usage Peaked at 33% growth in 6 weeks. However, July findings show more and more consumers less likely to use each shopping channel, indicating more bulk shopping and less frequency and less window shopping.

11

Once COVID-19 is finished with no more ill effects, which of the following channels will you use more - less or the same for FMCG products compared to before the Covid -19 outbreak (SA by attribute)

Base: n=1,019

21% 22% 22%

28% 29%

52%

16%13%

16%

22% 23%

41%

Traditional streetstore

Specialized stores Wet market Convenience stores Hyper / Supermarket On-line

Shopping frequency May -JulyWill shop more

May July

42%

27% 24%16% 13%

62%

30%34%

29%21%

58%

30% 31%26%

21%

Eat at home/ Home cooked meal Order Food Delivery Taking vitamins/ nutritionalsupplements

Working remotely/ from home Stocking up OTC medicines/medical devices

63%56%

51%47%

20%

31%

40%

30%

20%

5%

32%37%

30%22%

4%

Eating / Dining outside Shopping at physical stores Out-of-home Entertainment Travelling – Domestic Travelling – International

Increased / New

behaviors

Declining Behaviors

Activities done before & after COVID %

(N= 2042)

KEY BEHAVIORAL CHANGES

New Post COVID behaviors are driven by Eating at Home and Working remotely. Behaviors which are in decline include;Dining and entertaining out, Physical shopping, all forms of travel. Until consumer confidence returns, only mild changesare expected in the new behavioral patterns

Which of the following activities did you do before COVID-19?Which of the following activities did you do during COVID-19?Which of the following activities have you done after COVID-19?

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ENCOURAGEMENT REQUIRED TO INCREASE BIG TICKET ITEM PURCHASES

VEHICLE HOUSING DOMESTIC HOLIDAY INVESTMENT

Car / motorbike manufactures lower

prices45%

I am confident my job is secure

39%More Government

reassurance COVID is over

46%Salary is increased

to its pre-COVID level34%

I am confident my job is secure

44%Confidence house / apartment value has

increased34%

Salary is increased to its pre-COVID level

40%More Government

reassurance COVID is over

40%

Job security, salary increase and more assurance from the Government are key Triggers required to give consumers confidence to spend on big ticket items.

D7C What could help you change your mind and decide to purchase DOMESTIC HOLIDAY / VEHICLE / HOUSING / INVESTMENT this year? (VEHICLE N=432; HOUSING N= 231; DOMESTIC HOLIDAY N=239; INVESTMENT N291)

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COVID-19 Financial Impact

29%

41%

52% 54%59%

63%

2015 2017 2018 Jan-20 May-20 Jul-20

15

Intention to take out loan in next 6 months %

Base: AllIn the next 1- 6 Months will you take out a loan of any kind from a bank, lending institution or borrows from Friends / family? [SA]

COVID-19 IMPACT ON LOANS

If Interest rates stay low, Loans from all sources should see an increase in the coming months, to deal with the ravages of COVID-19.

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CORONA VIRUS REVENUE IMPACT FOR 2020 GROWTH

How much do you think the Corona Virus outbreak, is going to impact your Job - business in 2020? (SA with 1=Very Positive Impact / 5=Neutral /10= Major negative impact)

Three quarters of all surveyed see a negative to very negative impact from COVID-19 on the growth of 2020 business, matching with present low consumer confidence levels . Rural dwellers showed more positive sentiment during the same period ( 5% Plus vs Urban)

18% 9% 73%

Base: w2 n=1,019; w1: 1,023

16% 11% 73%

JULY 2020MAY 2020

Extreme POSITIVE Mild NEUTRAL Mild NEGATIVE Extreme4% 2% 4% 3% 2% 8% 20% 25% 12% 21%

8% 4% 3% 3% 5% 11% 12% 12% 6% 35%

Urban: 58%Rural: 53%

Urban: 10%Rural: 15%

MEDIA BEHAVIOR POST COVID VIETNAM

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18

MEDIA PERCEPTIONS AND USAGE URBAM VS RURAL

34%

53%

22%

19%8%

7%

9%

4%8%

4%3%

2%3%

2%13% 9%

Urban Rural

Others

Radio

PRINT Newspapers

Company websites

International Online News

Facebook

VN Online News

TV

37%45%

20%

30%

17%

14%

5%

2%

5%

2%

4%

2%12%5%

Urban Rural

Others

Outdoor

International Online News

VN Online social media

VN Online News

TV

Facebook

Most used Most trusted

Facebook and TV most widely used, particularly in Rural Areas. In terms of trust, 1 in 2 rural consumers trust TVthe most, followed by VN online news.

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MOST USED MOST TRUSTED MOST ENTERTAININGMOST LIKELY TO PAY ATTENTION TO ADS

56% 31% 45% 34%

27% 26% 30% 29%

9% 10% 12% 13%

SOCIAL MEDIA FOCUS – ‘MOST’ LIKELY TO

Facebook the ‘go to’ page across key social media activities. However, Zalo and Youtube are becoming increasingly popular.

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What to do?

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YEAR END PREDICTION

Confidence & economic outlook▪ Continued slight increase in confidence to end of Year▪ 75% see economy as being worse than in January 2020,▪ Due to unemployment being 12% lower 6 months after COVID’s arrival.

Risk perceptions▪ Still very high▪ But- shifting from infection to negative impact on business and

unemployment as economic woes continue

Present levels of reduced consumerism too continue until at least the end of the year Marginal improvements in some sectors, while others continue to decline.

9184

2227

2019 Jan-20 May-20 Jul-20

Consumer Confidence Index

▪ Based on 6 months of tracking consumer Behavior

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Five P’s Recommendations

People

▪ Consumers require reassurances in terms of alleviating fears, unemployment, financial stability to increase confidence

▪ Increase on-line entertainment value as consumers go out less and spend more time at hone and one line

Product

▪ Require more guarantees, free sampling, preventative efficacy , smaller SKU’s pack types, value savings on large pack types

▪ New alternatives – delivery service / on-line exercise / etc

▪ Products that can save now and secure future – different payment plans with low interest rates

Place

▪ Focus is on security, convenience and less entertainment value and more savings value

▪ Hence Modern trade such as Supermarkets, convenience, specialty stores are key

▪ On-line is a given for most categories – but require guarantees and more product information

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Five P’s Recommendations

Price ▪ Discounts / value to volume savings

▪ Reduced payment terms / reduced credit rates

Promotion ▪ Promotions less effective unless they provide savings or volume increases

▪ Facebook beginning to loss trust from consumers

▪ Need to….▪ become much more target specific on-line as the medium is very cluttered

▪ maximize internet optimization to stand out

▪ have relevant messaging, with good dose of entertainment to stand out

▪ focus on product functionality and guarantees

▪ fish where the fish are – On-line – On Mobile

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2021 PREDICTIONS

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2021 PREDICTIONS

Proprietary Questions Fare USD Single answer 2585-point scales 345

Multiple answer 345Ranking 386Max Diff 386

Multivariate 515Open ended 645

RATE CARD

# Module Options Fare USD

1 Consumer Confidence IDX 345

2 Covid-19 Behavior Tracker 345

3 Pre -Tet purchase behavior 345

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Ralf Matthaes | Managing DirectorTel: +84-8 2262-7627Mobile: +84-903-949-531Website: www.ifmresearch.comifmpanel website: www.ifmpanel.com

Email: Ralf.matthaes@infocusmekong.com4th Floor, 21 Phung Khac Khoan Street, D.1HCMC, Vietnam