Vietnamese consumer market review

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Vietnamese consumer market review - Người Tiêu Dùng Việt Nam - from TNS

Vietnamese consumer market review - Người Tiêu Dùng Việt Nam - from TNS

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  • 1. Ralf MatthaesManaging Director TNS Indochina October 8, 2009 Hilton Hotel Hanoi
  • 2. Consumer Trends Agenda § Poor Children of Ninh Thuan Province § Half year 2008 vs half year 2009 § Wealth § Consumption § Consumer concerns § Branding § Media § Environment
  • 3. 2008 vs 2009
  • 4. Half year 2008 vs half year 2009 Comparison 2008 2009 GDP growth = 8.5% q GDP growth = 3.9% FDI (US Billion) = $18 Billion q FDI (US Billion) = $2.8 Billion Inflation (CPI) = 28% q Inflation (CPI) = 3.4% Exports** = 47.7 Billion q Exports** = 41.7 Billion Consumer confidence = 94% q Consumer confidence = 86% (economy same/ better in next 12 months) (economy same /better in next 12 months) Ad expenditure growth = 16% q Ad expenditure growth = 23% FMCG growth* = 20% q FMCG growth* = 8% Modern trade growth* = 27% q Modern trade growth* = 10% Internet users growth = 23% q Internet user Growth = 25% Car sales^ = 30% q Car sales^ = -19%** Overseas remittance = 8 Billion q Overseas remittance = 6.7 Billion Overall growth spend at half year is down by 25% compared to 2008 While economic indices show a decline of over 50% in growth Source: GSO /TNS * Value growth / TNS Worldpanel ^VAMA – end of August **Exports = End of September 09
  • 5. Vietnam by the numbers – 2008 vs 2009 Inflation is down by 88% from half year 2008 Ad spend growth is up by 23% from half year 2008 Internet growth is up by 25% from September 2008 GDP at half year is less than half of 2008 FDI is down by 87% compared to September 2008 Exports are down by 6% compared to years end 2008 estimate FMCG growth is down by 12% from half year 2008 Modern trade growth is down by 17% from half year 2008 Car sales are down by 19% from half year 2008As FDI & Exports accounted for US $120 Billion of the VN economy in 2008, VN will struggle moving forward, with only US $65 Billion in 2009 (est.)
  • 6. Wealth Trends
  • 7. GDP per capita evolution - USDIn USD 1,200 1,024 1,024 1,075 1,000 835 800 725 600 552 402 440 400 289 200 0 1995 2000 2002 2004 2006 2007 2008 2009 Est. Vietnam’s GDP has doubled in 4 years, but only by 5% in 2009 Source: GSOVN
  • 8. HCMC Declared Monthly Household Income2008 5 14 26 12 32 3 8 SEC Income Scale A1 = US $1,200 + A = US $801 -1,2002006 7 27 31 11 18 2 4 B = US $401 - 800 C = US $400 - 276 D = US $181 - 275 E = US $126 - 180 F = US $ 45 - 1252004 20 37 20 5 12 4 22001 24 34 20 6 11 51999 30 27 23 12 5 3 0% 20% 40% 60% 80% 100% SEC F SEC E SEC D SEC C SEC B SEC A SEC A+ A-B-C SEC has more than doubled in the last 4 years (+59%) Source: TNS VietCycle: 1999-2008 Base: N = 1,000
  • 9. Hanoi Declared Monthly Household Income2008 1 7 35 23 31 12 SEC Income Scale A1 = US $1,200 + A = US $801 -1,2002006 6 26 38 10 18 02 B = US $401 - 800 C = US $400 - 276 D = US $181 - 275 E = US $126 - 1802004 26 44 20 4 5 1 F = US $ 45 - 1252001 46 36 11 3 311999 40 37 14 5 31 0% 20% 40% 60% 80% 100% SEC F SEC E SEC D SEC C SEC B SEC A SEC A+ A-B-C SEC has almost doubled in the last 2 years Source: TNS VietCycle: 1999-2008 Base: N = 1,000
  • 10. Consumption Trends
  • 11. FMCG Growth in Asian countries (%) - 2008 19 16 11 10 8 8% 3 Vietnam China Malaysia Thailand Philippines Taiwan Vietnam July 09 Vietnam experienced the fastest FMCG growth in Asia in 2008 FMCG Trends % value Changes – Source: TNS Worldpanel Asia
  • 12. FMCG value growthHalf year 2008 vs. half year 200925% 22%20%15% 14%10% 8% 8% 8% 7% 5% 4% 0% 0% TOT HH TOT TOT FOOD TOT FMCG TOT TOT NON TOT TOT PRODUCTS BEVERAGES GROCERY FOOD CHILLED PERSONAL FOOD CARE Personal care products have suffered the most from the recent recession, as consumers are more concerned with filling their stomachs and keeping their castles clean, as they are going out less Source: TNS Worldpanel
  • 13. Growth of FMCG Sector half year 2008 vs 2009 53 6.5 mil vnd + 20 3.5 mil - 18 6.5 vnd Below 8 3.5 vnd 10 7 2008 3 2009 All HouseHolds Low income Middle income High income -6 % Value Change YTD P608 vs. P607 % Value Change YTD P609 vs. P608Vietnam’s wealthier consumers have reduced their spend the most over the past 12 months, indicating that 2008 was a huge boon year, where these consumers had little worry about the future, while today their confidence is not as high Source: TNS Worldpanel
  • 14. Wealth & Consumption SynopsisHanoi & HCMC have increased their wealth significantly inthe past 4 years.Hanoi’s wealthy class has increased 5 fold, making it truly aconsumer paradise.However, the recession is curbing the wealthy classesspend more than all others.Household products, beverages and foods are still seeingdouble digit growth.Thus, are your brands, products and services targeting theright consumer?
  • 15. Consumer Concerns
  • 16. Quality of product and value for money The Chinese Milk scare could be felt for years & will make consumers more quality conscious
  • 17. Vietnamese main fears in life 64% Health of my family 71% 75% 48% Personal health 47% 70% 39% Unemployment 36% 55% 35% Financial stability 29% 27% TNS Consumer Poll - Jan. 09 17% Global recession 16% TNS VietCycle - Sept. 08 27% TNS VietCycle - Nov. 06 Health still tops consumers main fears, followed by money matters Source: TNS VietCycle 2006 / 2008 & TNS Consumer Confidence Poll – Jan. 09
  • 18. My personal standard of living forecast Far better A little better Same A little worse Far worse Dont know TNS Consumer Poll - Jan. 09 9 27 46 16 10 TNS VietCycle - Sept. 08 16 54 25 41 0 TNS VietCycle - Nov. 06 18 48 32 20 Vietnamese personal standard of living forecast for the next 12 months has dropped from 70% forecasting a better living standard in September 2008 to only 36% in January 2009 Source: TNS VietCycle 2006 / 2008 & TNS Consumer Confidence Poll – Jan. 09
  • 19. Will you reduce spending in 2009? Don’t know 2% No 46% Yes 52% Over half of consumers shall reduce their monthly spending in 2009 Source: TNS Consumer Confidence Poll – Jan. 09
  • 20. Consumers spending reduction in 2009? Base: All n = 500 Less Same More Dont know Entertainment & dining out 44 54 2 0 Home appliances (Wash machine, TV Hifi, etc) 29 69 2 MajorDecrease Household utilities 28 70 2 0 Personal equipment (mobile phone, laptop ,Etc) 28 69 30 Communications telephone/ fax/ email 25 71 40 Personal care products 23 73 40Less than Transportation 23 73 4 25% House hold care products 23 74 30 Food & beverages products 16 81 4 Health care products/ services 12 76 12 1 Education 4 72 23 1 Stable Only education and healthcare seem to be unaffected by the Global economic recession Source: TNS Consumer Confidence Poll – Jan. 09
  • 21. Consumers Concerns SynopsisHealth, sanitation and safety are still key consumerconcerns.Consumers are conscientiously spending less due to fearsof unemployment, financial stability and global recession.However they are still spending but on smaller ticket items,especially keeping homes clean, stomachs filled and onbigger ticket items such as Healthcare and Education.Does your company have the right mix or offer for today’smore conservative consumers?
  • 22. Brand impact
  • 23. Advertising Brand Consumer Cycle “Brand aspirations and the brand as an extension of the consumer are now the norm in Vietnam” BEYOND THE Ralf Matthaes BRAND (Post Modern Mktg) BRAND AS ICON Niche Market Needs Based Segmentation (Customer Driven Brand Includes Company Marketing) BRAND AS Saturated MarketLOW Usage Segmentation PERSONALITY Stage 5:COMPETITION Symbolic Ads (Classic Branding) Self-fulfillment BRAND AS Intense Competition Psychographic Segmentation REFERENCE Emotional / Lifestyle Ads Stage 4: (Marketing) Esteem Increasing Competition Stage 3: NO BRAND Demographic Segmentation Social (Commodity Selling) Rational Ads recognition Products have Power No Segmentation Stage 2: No Advertising Upgraded needs Stage 1: NAÏVE COMPETITION Basic needs
  • 24. Vietnamese Brand Perceptions I am equally concerned about 81 Price and quality I prefer brands with a health / 73 environmental focus I’m willing to pay more for 71 higher quality brands I like to use the brand which 56 shows my success I prefer to buy well-know brands 56 Vietnamese brands are as good 50 as international brands I prefer local Vietnamese brands 39There are no real differences between 32 the brands available in the market 0 10 20 30 40 50 60 70 80 90 International / healthy / badge value brands and brands of high quality are still much more preferred by VN consumers Source: VietCycle 2008- September 2008
  • 25. Vietnamese brand perceptions are changing“My children will be veryintelligent and grow-up faster ialas I feed her by a good qualitypowder milk. I feel that I am a ocgood mother” S Pe o p le “ m o t h e say t h a t I a qualityr because I c m a m odern m y g r e b r an d s f o r h o o se g o o d at love m for m yy b aby. It sh ch il d r e ows n” RECOG NITION “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 2007-2008 FGD’s
  • 26. 10 fastest growing brands – Half year - 2009 25% Value Share change% 22% Market share movement 15% 12% 10% 10% 9% 9% 8% 7% VFRESH CHINSU KOTEX VFRESH STING TRANG TUONG AN FAMI (Soya DIELAC VINAMILK(Soya milk) (NAM NGU) (Pantyliner) (Fruit juice) TIEN (Margarine) milk) ANPHA 1 (UHT) In 2007, 2 of the fastest growing brands were, Vietnamese, in 2008 = 4 and thus far in 2009 = 8 were Vietnamese Thus, meaning that Vietnamese brands and the Gov’t initiative to buy local is working Source: TNS Worldpanel
  • 27. Branding synopsisVietnamese consumers are becoming brand savvy.Vietnamese are using more and more Vietnamese brands.Government initiatives and price points have much to dowith this surge in Vietnamese brand sales.But do Vietnamese brands have the quality andaspirational brand equity to thrive, when the economyrebounds?
  • 28. Internet us@ge
  • 29. Top 18 countries – internet users China 298 US 220 Japan 94 India 81 Germany 55.2 Brazil 50United Kingdom 43.8 France 40.9 Russia 38 South Korea Spain 28.6 36.8 @ Italy 28.4 M exico 27 Turkey 26.5 Indonesia 25 Vietnam 21 Philippines 20.7 Poland 20 0 50 100 150 200 250 300 350 Vietnam is now the 16th most active user of the internet globally. As of Aug. 2009, there are 24.5 million users, an increase of 18% from last year Source: WorldInternetstats.com – March 2009
  • 30. In-home Internet penetration (Hanoi & HCMC)40 3430 2120 910 8 30 1999 2001 2004 2006 2008 With 1 in 3 urban homes connected to internet, Internet based advertising will experience steady growth Source: TNS VietCyle – 1999-2008 – HCMC & Hanoi
  • 31. Monthly Internet Expenditure US$36M US$36M Monthly Personal Spending on the Internet (VND) Monthly Personal Spending on the Internet (VND) monthly monthly Total (4 cities) 174,071Ho Chi Minh City 191,145 Hanoi 155,155 Da Nang 133,258 Can Tho 115,475 Net users spend an average VND174,000 or US $10 per month on the Internet Base: Past month internet users aged 15+ across all 4 major cities who have home internet access Source: Yahoo!-TNS Net Index 2008
  • 32. Online User Profile Age Age Gender Gender Marital Status Marital Status 15% 35% 8% 40+ 37% 44% 10% 52% 35-39 64% Female Married & 12% 18% 30-34 Others 12% Male Single 24% 25-29 14% 63% 20-24 56% 48% 14% 36% 26% 15-19 14% General Netizen* General Netizen* General Netizen* Skewed towards young (68% <29 years), Male (56%) and Single (63%)
  • 33. Internet SynopsisThe internet is surly becoming a mainstay inVietnam.Though attracting a young audience, internet willspread to all ages in the next 5 to 10 years.There is huge amounts of money to be made via theinternet.Do you know what your Return on investment couldbe?
  • 34. A Shift in Advertising
  • 35. Advertising spend breakdown - 2008 Internet (est.) M agazines 0.4% 8% Newspapers , 16% Radio 0.6% TV 75% TV Radio Newspapers M agazines Internet (est.) TV is King followed by Print. However, Internet is growing Source: TNS Media Co.
  • 36. Top 4 Daily Home activities 66% 7% 7% 4% 7% TV dominates followed by reading, using the computer and watching movies and listening to music Source: VietCycle 1999-2008
  • 37. Media Reach 2006 2007 2008 (%) 99 99 100 83 85 84 77 73 76 62 60 62 62 64 57 51 52 44 42 33 27 15 11 11 TV (Past Week) Outdoor (Past Newspaper Magazine (Past DVD/VCD/Tape Radio (Past Cinema (Past 3 Internet (Past Week) (Past Week) Week) (Past Week) Week) Months) Week) TV is still King… but Internet is by far the fastest-growing medium Base: Males and Females aged 15+ across all 4 major cities (Ho Chi Minh City, Hanoi, Da Nang and Can Tho) Source: TNS Media Habits Survey (2006-2008)
  • 38. Media Exposure TrendsTime Spent Per Day (Mins) 295 253 2006 2007 2008 233 46 45 46 43 22 24 21 22 30 9 10 8 TV Newspaper Magazine Radio Internet Time spend watching TV has decreased by 1 hour per day since 2006, while Internet is the only medium growing (21 minutes / day) Base: Males and Females aged 15+ across all 4 major cities (Ho Chi Minh City, Hanoi, Da Nang and Can Tho) Source: TNS Media Habits Survey (2006-2008)
  • 39. Ad spend half year 2008 vs half year 2009250,000 (,000) 230,000 2008200,000 2009 171,000150,000 TV ad spend has increased by 26% and Newspaper increased by 12%, while both Magazine & Radio have dropped.100,000 Total ad spend is up by 23% compared to 2008 50,000 42,050 36,980 20,500 20,429 937 828 0 TV Newspapers Magazines Radio
  • 40. Top 6 Growth Sectors ad spend Half yr 2008 vs half yr 2009 The Beverage sector, followed by80,000,000 Telecoms has experienced the highest growth in Ad spend, followed by 66%+ Foods, Beauty Care, etc. Ironically, 61,596,125 sector spend does not necessarily60,000,000 translate into category growth in terms 35%+ of sales, as Beauty care grew by zero% 49,557,128 34%+ 43,759,859 37,102,809 93%+40,000,000 36,743,160 36,085,467 32,835,029 15%+ 42%+ 18,731,56020,000,000 16,493,830 14,877,059 14,423,011 10,478,135 0 Telecoms Food Hygiene & Beauty Beverages Pharmaceuticals Household Care products 2008 2009
  • 41. Top 6 declining Sectors ad spendHalf yr 2008 vs half yr 2009 Not surprisingly, the finance -65% 14,000,000 13,086,280 sector has seen the highest decline in ad spend in the past 12,000,000 12 months, followed by -36% Automotive, who’s sales have 10,000,000 9,233,583 dropped by 19% -21% 8,000,000 7,630,154 -29% 6,174,207 6,031,925 -13% 5,966,609 6,000,000 -12% 4,962,512 4,629,849 4,675,415 4,425,797 4,323,077 4,1 6,805 1 4,000,000 2,000,000 0 Financial Automotive Computer & Household Retail Travel & Audio Video Appliances Tourism 2008 2009
  • 42. Media Shift SynopsisMedia habits are changing in Vietnam.TV is still King but viewership is dropping.Cable TV and the Internet are the new kids on theblock.Are you spending your advertising dong wisely?
  • 43. Environment
  • 44. Environmental awarenessI would be willing to pay 10% more for groceries/products that are more environmentally friendly Strongly agree Somewhat agree Somewhat disagree Strongly disagree Ave India 51 42 5 2 3.4 Chinese mainland 38 55 6 1 3.3 Philippines 44 46 9 1 3.3 Indonesia 41 47 11 1 3.3 Malaysia 28 55 14 3 3.1 Thailand 26 56 17 1 3.1 South Korea 22 58 18 2 3.0 Singapore 15 55 27 3 2.8 Hong Kong 15 54 27 4 2.8 Japan 10 54 33 3 2.7 New Zealand 15 38 34 13 2.6 Evidence of increasing concern across Asia… Source: Grey Group study
  • 45. Forecast in the next 12 monthsEnvironmental Pollution Far better A little better Same A little worse Far worse Dont know TNS Consumer Poll - Jan. 09 5 22 9 27 36 0 TNS VietCycle - Sept. 08 5 17 27 40 12 0 TNS VietCycle - Nov. 06 7 22 23 37 9 0 In a short time consumer sentiment towards the worsening of Vietnam’s polluted environment has increased by 300%! Source: TNS VietCycle 2006 / 2008 & TNS Consumer Confidence Poll – Jan. 09
  • 46. How do we rate Vietnam’s environment?By SEC, age group and gender Quality of Vietnam environment Very bad Fairly bad Fairly good Very good AB (n=283) 25 52 20 3 CD (n=539) 25 57 16 1 EF (n=173) 28 47 22 2 Teenagers (n=195) 18 60 20 2 Young Adults (n=185) 32 53 14 1 Mature (n=296) 21 54 23 2 Older (n=324) 29 51 17 2 Male (n=503) 26 53 19 1 Female (n=497) 24 55 18 3 We can see the next generation of adults (teens) are quite skeptical of the environmental situation. Base: All respondents
  • 47. What are we doing to look after the environment?Current actions vs Perceived most important action 69 Not littering 45 51 Use less energy (gas, electricity) 13 45 Use less water 5 39 Less use of plastic bags 7 34 Recycle/separate waste items for recycling 13 26 Use energy saving bulbs/ solar power lights 4 20 Walk or use more bicycle / electric bicycle 4 17 Use more public transport 3 Ending littering is highest 13 Less use of motorbike/take more public transport 2 for action taken and Share transport with others 0 10 considered most 10 important factor. Use less harmful aerosols or products 1 9Use less batteries/ use more rechargeable batteries 0 9 Use environmental friendly transport 3 Actions Most important
  • 48. Environmental Brand Perceptions “7 out of 10 consumers “say” they lly prefer to buy environmentally ta friendly products, …but do they? en ? nm ndly iro rie E nv F Feeding hungry mouths and buying aspirational brands, rules in Vietnam le No brand in Vietnam y mobi has an image of being use m ocial “I can w my s ” environmentally friendly, friendly to sho ersonality but lots of companies s&p have the opposite image! statu Source: TNS VietCycle
  • 49. So let’s smarten up & start to clean up!
  • 50. Is the glass half full or half empty - Synopsis Overall spend has continued to increase on almost all consumer categories, but growth has declined by 15% to 50% compared to 2008. Not all sectors have been impacted the same… Telecoms / Food / Beverages / Pharmaceuticals / Household Products / Education have all maintained steady if not staggering growth Electronics / Automotive / Travel-tourism, Computer-Audio video / Finance-banking, beauty-personal care and real estate have all seen a mild to steep drop off
  • 51. Is the glass half full or half empty - Synopsis Thus, Vietnamese consumers are more concerned with hygiene, health, food and drink and connecting with one another and preparing for their futures. Inversely, big ticket items such as cars and computers, banking and real estate products have all been relegated to a later date, during these times of uncertainty.Bottom-line: Glass is half empty due impact of global recession (EXORTS / FDI) Glass is half full due to strong performance of domestic market Glass is full compared to the rest of Asia as Vietnam is 1 of only 5 Growth economies in the region
  • 52. 2008 - 2009
  • 53. Why we need your help?TNS Vietnam shall donate all proceeds of the sale of thisbook, save for production costs, to UNICEF’s Ninh ThuanProvince Child Protection Program.The intend is to raise at least US $40,000 from the sale ofTNS Pink Pages.US $100 / copy or US $500 / 10 copies…
  • 54. Imagine…Travel to NT NINH THUAN
  • 55. Imagine… A baby born in Ninh Thuan stands two times the risk to die during or immediate after birth (vs national average)
  • 56. Imagine… A child growing up in Ninh Thuan is two times less likely to reach her fifth birthday (vs national average)
  • 57. Thus far we have donatedUS $10,000 to UNICEF You &
  • 58. & You Together, we can make a difference! Ngoc.ta@tns-global.comVC GTI
  • 59. Thank You / Cam Onralf.matthaes@tns-global.comwww.tnsglobal.com