Nielsen Consumer Finance Seminar_Hanoi version

  • 4,234 views
Uploaded on

 

More in: Travel , Business
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
4,234
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
71
Comments
0
Likes
1

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Nielsen Consumer FinanceSeminar7 September, 2012 1 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 2. TODAY Topic Speaker Time (AM) Vaughan RyanIntroduction Managing Director, Nielsen 9:30 – 9:40 Vietnam Marc TownsendAre you prepared for the next market Managing Director, CBRE 9:40 – 10:10cycle? Vietnam Vaughan Ryan Managing Director, NielsenThe latest look into Vietnam VietnamConsumer Finance Trends and 10:10 – 10:40Opportunities for Financial Doan Duy KhoaInstitutions Financial Industry Practice Leader Q&A Session 10:40 – 10:55 Closing Remarks 10:55 – 11:00
  • 3. Introductions Marc Townsend Managing Director, CBRE Vietnam Doan Duy Khoa Financial Industry Practice Leader, Nielsen 3 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 4. Setting the Scene 4 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 5. The potential has softened, but opportunitiesremain 2011 vs. YTD vs. 2010 2011GDP Growth YOY +5.9% +4.8% (est.)Lending Rate 22-25% 15%Inflation (Average YOY) 18.6% 10.4%* 21Aug >3,000 online messages discussingUSD/VND (Official Dec 31st) 21,036 20,800 banks/ stock market Sources: Main indicators 2010 and Q1 2011, GSO; Consumer Confidence, Nielsen Global Online Survey; FMCG Growth, Nielsen; Vietnam Retail Audit. thanhniennews.com 5 *Jan – Aug 2011 comparison to Jan – Aug 2012 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 6. Are you prepared…for the next market cycle?!?Presented by:Marc TownsendManaging DirectorSeptember, 2012CB Richard Ellis (Vietnam) Co., Ltd.
  • 7. The Fine Line Between Success and Failure… Can Still Lead to Some Big Margins  The cyclical nature of real estate (and other) markets will always create success and failure;  Historically, even very recently, failure or poor performance has been very well rewarded;  Looking forward, the Vietnamese real estate market will be less likely to reward those who fail;Page 7
  • 8. Q1 2012 Global Office Rental Cycle the real estate market is a cycle including ups… and downs… Note: markets do not necessarily move along the curve in the same direction or at the same speed. “Given where we are in the cycle, we see lots of opportunity out there to grow…” – Brett White, CEO, CBRE GroupPage 8
  • 9. 2012 Regional Economic Comparison Hong Thailand Singapore China Malaysia Indonesia Vietnam Kong GDP Growth Rate 4.9% 1.6% 5.0% 9.0% 4.9% 6.3% 5.9%Q1/2012 forecast 2.8% 5.3% 3.0% 7.5% 4.3% 6.2% 5.5%Q2/2012 forecastConsumer Price Index 5.3% 3.9% 5.0% 5.6% 3.2% 5.4% 18.6%Q1/2012 forecast 4.7% 3.5% 4.3% 3.1% 2.7% 4.8% 10.3%Q2/2012 forecast US$53.68 Gold Price 4.8% higher(per gram in US$ US$51.43 US$50.18 N/A US$51.56 US$51.52 US$51.49 than regional average equivalent) 2.6 pp higher than Q1Trade Balance -$8.15 bn -$63.3 bn $12.4 bn $47.9 bn $113.8 bn $45.1 bn $28.3 bn(2012 forecast) (est.) $11 bn $11.1 bn FDI (2011) $8.6 bn - $4.13 bn $38.86 bn $170.4 bn - $4.4 bn 2011 2010 (Implemented) Source: Oxford Economics, Vietnamese General Statistics Office, World Bank, Goldprice.org, goldpricethai.com, pecunix.com Page 9
  • 10. Two Big Gorillas in 2012  Regional stock markets current VietnamG ld P e o ric 50.0 L as of July 17, 2012: 48.0 u Lc l GldP e(M nV D a ) oa o ric illio N /T le n 46.0 a 44.0 r Dva a n e lu tio • Thailand up 18.14% 42.0 40.0 N e o Dn f og 38.0 w • Singapore up 12.14% 36.0 34.0 Y e U Db S et C is ris 32.0 a • r Laos equities up 11.2% 30.0 4-F b28-F b a e e24-Mr17-Ar11-My4-J n28-J n22-J l15-Ag8-Sp 2-Ot 26-Ot19-N v e a p a u u u u e c c o 13-D c6-J n30-J n e18-Mr11-Ar5-My29-My u a 23-F b a p a a22-J n • Glds ll p e o e ric Indonesia equities up 7.1% Surc : SC o e J • Vietnam up 19.30% since January 1 - But down 14.45% from May 8 peak - Lower inflation = higher stock market 700 25 600 20 CI (%y -y) 500 15 N x P -oV Inde 400 10 300 5 200 0 Mar-09 J un-09 Sp-09 Dc e e-09 Mar-10 J un-10 Sp-10 Dc e e-10 Mar-11 J un-11 Sp-11 Dc e e-11 Mar-12 J un-12 V Inde N x CI P Note: Vietnam stock market as of July 17; CPI figures are actual except forecast for July 2012 Page 10
  • 11. The Outlook for Asia in 2012… weakened from August 20112012 GDP Forecast  Expectations weakened NE Asia due to US-EU turmoil last summer SE Asia Australia  Signs of stability or slight USA improvement during Q1 Europe Japan this year  Impact is strongest on Asia’s most open, global, Singapore trading economies South Korea Hong Kong  China achieving a Taiwan “managed slowdown” will be key Page 11
  • 12. But Still the Economic “Bright Spot” Real GDP % change per annum  Stronger growth than the rest of the world  Some countries better than 2011 (Japan!) and all should increase in 2013  Asia almost certain to benefit first and most from any global upturnSource: Oxford Economics Page 12
  • 13. Foreign / Regional Investors Are Risk Averse …while domestic investors are buying on price. Prime property: attractive bond-type investments Focus on quality of covenant and income stream Good locations, large liquid markets Not much good stock available, few sellers … Plenty of Asian capital: prime pricing aggressivePage 13
  • 14. What is Driving Regional Occupier Demand? “Cost saving and efficiency” replace “growth” for MNCs Western companies deferring big decisions Finance and related sectors on the back foot But many Asian companies are still aggressive Insurance, commodities, retail still growingPage 14
  • 15. 2012 Vietnam Economic Overview 2008 2009 2010 2011 2012 f 2013 f GDP Growth 6.20% 5.30% 6.80% 5.91% 1 5.5% 5 7.1% 5 Rate (y-o-y) 12.75% 16%-17.0% 13% - 16% N/A Lending Rate 12% Down from 21% 22% - 25%2 (Late 2010) Current in Q3 9.20% Inflation 22.90% 6.90% 18.58%1 10.3% 5 6.9% 5(Average, y-o-y) (Dec‘10: 11.8%) Exports US$62.7 bil US$57.1 bil US$71.6 bil US$96.3 bil 1 US$104.7 5 US$117.8 5 Imports US$80.7 bil US$69.9 bil US$84.0 bil US$105.8 bil 1 US$113 5 US$125.9 5 VND17.8 mil VND26.7 mil VND36.1 mil VND41.8mil3 VND41.86 mil3 N/A Gold Price (Jul. 17, 2012, (Dec. 31, 2008, (Dec. 31, 2009, (Dec. 31, 2010, (Dec. 30, 2011, (per Tael) Down 4% since up 7.2% y-o-y) up 50% y-o-y) up 35.2% y-o-y) up 15.8% y-o-y) Jan. 3, 2012) US$/VND 17,400 18,497 19,500 21,036 2 (Commercial (Dec. 31, 2008) (Dec. 31, 2009) (Dec. 31, 2010) (Dec.31, 2011) banks) 21,379 5 22,138 5 Devalued by Devalued by 5.4% vs. Dec. 7.9% vs Dec. 2009 2010) US$/VND 17,510 19,470 21,010 21,275 20,860 N/A (Unofficial (Dec. 31, 2008) (Dec. 31, 2009) (Dec. 31, 2010) (Dec. 31, 2011) (Jul. 17, 2012) market) US$18.6 bil US$14.7 bil 1Committed FDI US$71.7 bil US$22.6 bil (US$6.8 bil real (US$845.6 mil US$15 - 16 bil 4 US$15 - 16 bil 4 estate) real estate) Implemented US$11.7 bil US$10 bil US$11 bil US$11 bil1 N/A N/A FDI Source: Historical data by GSO, 1GSO , 2SBV, 3SJC, 4Ministry of Investment, 5Oxford Economics Page 15
  • 16. Overview of the First Half of 2012 Movement in policies and economics  Government measures • Inflation trending down - Down 5 percentage points in 1H/2012 • Interest rates trending down - Reduced 5% in 1H/2012 • FDI – stable - US$5.4 billion implemented in 6M/2012  Vietnam in good company • China GDP slowing • India GDP slowing 16 14 12B te s a s )S VIn ret R te (% 10 8 6 4 2 0 Jn u -06 Dc e-06 Jn u -07 Dc e-07 Jn u -08 Dc e-08 Jn u -09 Dc e-09 Jn u -10 Dc e-10 Jn u -11 Dc e-11 Jn u -12 B s Rte ae a Rd c u tin Rte e iso n g a Rfin nin Rte e ac g a Page 16
  • 17. Continuing Government Support VN Government spending is VND21 trillion per month - Effectively Vietnamese Quantitative Easing Additional stimulus for SMEs: Deferral of VAT payments - positive effect on cash flow Projected 30% reduction in corp tax rate Page 17
  • 18. Effect of Government Policies Seen in the economy, but not the property market… CPI, VN (% y-o-y) CPI, VN (% m-o-m) Refinancing rate (%) Rediscounting rate (%) 25 3.50 -y) te s te ) 3.00 CI (%y-o / In ret ra s(% 20 M n ta c n lsto ke c o e ry o tro o ffe t 2.50 -o ) CI (%m -m 15 2.00 1.50 10 P 1.00 P 0.50 5 0.00 0 -0.50 Ot-10 c Dc e-10 Fb e -11 Ar-11 p Jn u -11 Ag u -11 Ot-11 c Dc e-11 Fb e -12 Ar-12 p Jn u -12 Government’s policies having an effect • All the numbers pointing in the right direction Real estate: Buy or waiting? • But… residential buyers still reluctantPage 18
  • 19. Is Capital Available for Real Estate… ? Is the sector productive? Classification of Real Estate • Productive or Non-productive (SBV Resolution 11, March 1, 2011) Effects the wider economy • Real estate industry is one of the biggest employers of school leavers / high-school graduates • Impacts on unemployment figures BCI Numbers HCMC Da Nang Hanoi Community, educational, hospital, 732 158 1,375 infrastructure, legal, transport, utility Residential 632 190 564 Office 453 74 555 Hotel & Serviced Apt. 69 48 54 Retail 168 43 30 Source: BCI June 21,Page 19 2012
  • 20. High Profile Projects Progressing Well but also high profile projects slowing down… The consequences of the economic situation is that some projects are: • Starting • Progressing • A few have been slowing down Vingroup choosing to raise money offshore with a bond offering in Singapore for the second time in 2012. Page 20
  • 21. Obstacles Foreign investors are finding Same, same – but same • Asking Vietnam to give up inefficient SOEs is like asking Americans to give up their cars • Americans will not give up their cars, but they will shift to smaller cars • Even marginal efficiency improvements in SOEs can result in huge productivity gainsPage 21
  • 22. Residential Many changes in H1/2012: • interest rates coming down • inflation subsiding • but little movement - Is there a lag? - Is it confidence? Buyers’interests expected to return to real estate… …Is it already happening? - Psychology? - Yields? VietinBank launches its home mortgage support - Funding? program valued at VND5,000 bil 300 F t int. ra c irs te ut: 25% N . o M rtg g A p a ns p ro ls Rd c untingra /Infla n(%p .) o f o a e p lic tio /A p va .a 14% →13% 250 20% 200 te tio 15% 150 10% 100 50 5% 0 0% e iso Jul11A 11Sp c o 11Dc a e 12M r12A r12M y12J ug e 11Ot11N v e 11J n12F b a p a un12 N . o M rtg g A p a ns o f o a e p lic tio N . o A p v ls o f p ro a Rd c untingRte e is o a Infla n(y-o tio -y)* D tafro as rve db n a m u ye a k Page 22
  • 23. Residential C ND M IU O O IN M LUX Y HIG ND UR H-E MID-END LO -E W ND Prices kept falling in S ondarym ec arket - Averageas pric S m king e(U $ps ) $2,990 $1,760 $1,320 $960 Q2/2012 Q hange(% -o-qc ) -6.7% -3.9% -3.7% -2.4% 8,000 30% Fg We are coming into a 6,000 Inflatio Inte s rate 25% fgf Sldunits n, ret 20% new cycle? 4,000 gf 15% o 10% • The key is people’s g2,000 5% psychology 0 0% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2008 2009 2010 2011 2012 2013 Sldunits o H annual inflatio N n B eInte s R as ret ate Rdiso e c untingRate Rfinanc R e ing ate “Dai Thanh” heat: - CT8A, CT8B, CT8C (~500 units each): reportedly sold out within 1-2 days f - High degree of speculation - many units were immediately offered at a premium of $10K- 15K per unit - V small unit size: 42-66sm ery Page 23
  • 24. Office: Substantial supply keeps coming Substantial supply keeps coming in the West; CBD less affected Office completion DELAYED but still SupplybyA (s ) rea m large: • Forecasts for 2012 / 2013 have been 2,000,000 CD B M n idtow Wt es Other revised down: Actual??? 1,600,000 2012F 2013F 1,200,000 Previously 330,000 sm 375,000 sm 800,000 (Early 2011) 400,000 NOW 270,000 sm 352,000 sm 0 End of 2012 ??? ??? 08 09 10 11 12f 13f 14f Net absorption tends to pick up (tripled q-o-q to approx. 37,000 sm in Q2/2012, Grade A & B) • Mainly in the West, along with tenants relocation out of CBD Question remains whether future demand can catch up with future supply Page 24
  • 25. Office Rents: New Lows in the West AverageG AA kingR byA (U $/s /m rade s ents rea S m onth) Rents: • For larger tenants in the West, rents $60 CD B M w idto n Ws et tend to drop to $18 psm $50 • Rent-free periods are increasing to $40 $30 keep headline rents as high as $20 possible $10 • Meanwhile at the moment rents in the $0 Q Q Q Q Q Q Q Q Q Q Q Q Q Q 1 2 3 4 1 2 3 4 1 2 3 4 1 2 CBD seem to remain stable Where will the cycle be at the 2009 2010 2011 2012 end of 2012? • Bottoming out or still declining? • In the CBD, rents might be under pressure towards year-end as CornerStone building will be completed (26,000 sm NLA) CornerStone Building (Grade A – CBD; 26,000 Page 25 sm NLA)
  • 26. Big Names Entering Industrial Parks On the backdrop of FDI numbers down… FDI inflows down in 1H/12  Nokia building a US$302 million • Total committed capital of factory in Bac Ninh US$6.38 bil. (down 28% y-o-y) • 11th plant worldwide; 17ha in • The majority to manufacturing VSIP Bac Ninh sector (US$4 bil.) • Create 10,000 jobs Shimizu & N&G Group investing  Bridgestone to invest US$575 US$1 bil. to build Hanoi South million in Hai Phong (the biggest Supporting IP (HANSSIP, 650 FDI project in the city) ha) in Phu Xuyen, Hanoi • 50th plant worldwide; 102ha in Dinh Vu IP Page 26
  • 27. Landlords Moving to Build to Suit Workshop and warehouse trends…Ascendas RBF Campus Layout  Revising previous programs • Ready built factories - On the wane with inconsistent demand • Build to suit increasingly common - Bring me a tenant, then we will build the factory Standard Factory Building Page 27
  • 28. The Global Retail Development Index WINDOW-OF-OPPORTUNITY analysis  Vietnam’s Ranking in A.T  CBRE’s ranking: Kearney Retail Survey • #3 for new market entries, tied with Ukraine • #55 Vietnam is the fifty-fifth most • 2008: No. 1 attractive country, up four places • 2009: No. 6 from 2011 • 2010: No. 14 • Most attractive cities: • 2011: No. 23 - #146 HCMC up 12 places • 2012: Not included on the list - #175 Hanoi, down 5 placesSource: A.T Kearney Analysis from 2011Page 28
  • 29. The Retail Environment Issues Remain to be Solved Low consumer spending Regional Ranking Comparison of GRDI (AT Kearney) 2008 – 2012 Year Unstable economy 2007 2008 2009 2010 2011 2012 2013 ENT remains an unclear 0 270,000 challenge to foreign 5 346,000 AT Kearney Ranking retailers 10 468,000 The QUANTITY of 15 modern retail space 20 740,000 increases regularly but 25 not yet the QUALITY 30 Top 30 Poor distribution/logistics 35 ? Out of Top 30 Indonesia Malaysia Phillipines Vietnam infrastructure, important for deciding where to Size of the bubble represents the retail market size locate, build a factory, or Analysed cities: Jakarta, Kuala Lumpur, Manila, Hanoi/HCMC establish an outlet;Mid to long-term prospects still promising thanks to: Demographic & economic development Maturing types of distribution (e.g. franchise market) More varieties of retail center formats Improving supply chain Page 29
  • 30. New Retail Centres to Open in H2/2012 No significant openings in H1 – …to make up for a quiet H1 but H2 will make up for it! Popularity between CBD and non-CBD centres is drifting further apart Shopping centres will be the most dominant form of retail in Hanoi in terms of space in the near future – but when will it be Hiway Supercenter (12,000 sm GFA; Ha Dong District; Opened accepted amongst consumers? 12/07/2012) • 2007: 51,000 sm • Q2 2012: 198,091 sm V anc R byLoc (%) ac y ate ation • End of 2013: 860,000 sm CD B non-CD B 35% 30% 25% 20% 15% widening 10% 5% gap 0% Trang Tien Plaza 2008 2009 2010 2011 2012 (14,000 sm GFA; Hoan Kiem District; Exp. Opening Nov ’12) S e CR V tnam ourc : B E ie Page 30
  • 31. Hotels A more challenging market…?  Thin demand  In the short term, 3-5 supply • Visa hassles, High air ticket prices,   competition (CBD, the West ) Lack of tourism promotion, Service - 2012 transparency issues  3-star Hilton Garden Inn (86 rooms) • Int’l tourism growth fluctuated  4-star Candeo Hotels (68 rooms)  5-star InterContinental Hanoi - Profile Landmark (359 rooms)  Business travel  , Holiday travel  - 2013: 5-star JW Marriott (450 rooms)  Mainly from Australia, China, France  Korean & Japanese visitors  - 2014: 5-star Lotte Hotel (300 rooms) - Spending   Accom.,  F&B &  Sightseeing   Average spending/visitor ($450/trip)   Daily spending ($160/day/visitor) 1,400,000 35% 6,000 1,200,000 30% 5,000 1,000,000 25% o f is rs a oN o V ito toH n i H te S p ly(ro m) o l up o s 800,000 20% 4,000 600,000 15% -o ro th Y -YG w 3,000 400,000 10% 200,000 5% 2,000 0 0% -200,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011H1/12 (5%) 1,000 -400,000 (10% ) 0 -600,000 (15% ) 2006 2007 2008 2009 2010 2011 YD 2012f 2013f 2014f T 12 -800,000 (20% ) N . o vis rstoH n i o f ito ao Y -Y ro th -o G w 5-s r ta 4-s r ta 3-s r ta Page 31
  • 32. Hotels Reduced Capital Values…? Long term • ADR  + Supply  + little Demand Y-o-Y Change in RevPAR (%)   Capital Value 5 ta -s r 4 ta -s r 3 ta -s r • Potential to develop international 2% 0 standard budget hotels 1% 0 • Hotel acquisition by Local firms from 0% Foreign partners -1 % 0 • Local Hoteliers: more aggressive in expanding market share, but not in -2 % 0 refurbishment/ renovation -3 % 0 Q1 Q2 Q3 Q4 Q1 Q2 • New International Brands 21 01 21 02Page 32
  • 33. Q1 2012 Regional Prime Yield Comparison Hong Beijing Shanghai Singapore Bangkok Manila KL Vietnam Kong Prime 9 (HCMC) 4.75 4.25 2.76 4.06 6.25 10.00 6.50 Office 10 (Hanoi)Change on Quarter 9 (HCMC)Prime Retail 5.00 4.25 3.54 5.00 6.25 N/A 6.50 10 (Hanoi)Change on Quarter 13 – 14 Prime 6.50 6.80 4.63 5.15 8.75 N/A N/A (HCMC) Industrial 14 (Hanoi Change on Quarter Source: CBRE Research Asia; CBRE Asia Pacific Capital Markets Page 33
  • 34. In the New Cycle, Evolution & Talent Will be Rewarded So what do we need? Practicality and Planning - Build for the Market Demand Realism - Forecasting is Possible, Use It Less Red Tape - Global Economies Will One Day Recover (We Hope), Let’s Ensure Vietnam is Still on The Map Investor Transparency: To Attract Capital No more overnight real estate billionaires THIS WEEK!Page 34
  • 35. CBRE Global Office Locations THANK YOU© 2012 CB Richard Ellis, Inc. This material has been prepared in good faith and with due care by CB Richard Ellis (Vietnam) Co., Ltd.We obtained some of the information above from sources we believe to be reliable. However, we have not verified the accuracy ofthe information which we obtained from other sources and make no guarantee, warranty or representation about it. We includeprojections, opinions, assumptions or estimates which are made with careful consideration of factors known to us for example only,and they may not represent current or future performance of the market.Page 35
  • 36. The latest look into VietnamConsumer Finance Trends andOpportunities for FinancialInstitutions 36 Copyright © 2010 The Nielsen Company. Confidential and proprietary. 2012
  • 37. Agenda• Market & consumer sentiment• Consumers’ investment usage & attitudes• Offline vs. Online• Food for Thought 37 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 38. Sources of information Personal Finance Monitor • Latest data up to Q2’12, N=1,800 interviews per quarter in HCM & Hanoi (PFM)A syndicated study that provides an on-going • Male & Female; 18-50 years old holistic and integrated measurement of • SEC: ABCDconsumers, delivering tangible outputs to help deepen understanding across the market • Decision maker on Personal finance Nielsen Global Survey on Investment Nielsen Global Consumer Confidence Attitudes (July ‘12) Study (Q2 ‘12) Nielsen Shopper Trend (Q1 ‘12) Nielsen QualiXpress (Aug ‘12) 38 Others: GSO and other research Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 39. Executive Highlights Concern for the economy is the top concern since 2011 o Consumers have less cash, less options and more worries Deposit/savings the ‘safest bet’ for most Vietnamese consumers o ‘Interest rates’ and ‘Trust/ Security’ are key influencing factors o Whilst consumers tend to self-rely on making investment decisions, Peer influence is also critical“Bricks and mortar” banks still the main preference for consumers o Customer experience should remain a higher priority o On-site is the key channel to drive new initiatives such as online banking
  • 40. Market & consumersentiment 40 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 41. Consumers seem more cautious on market uncertainties,particularly on the economy Vietnam Consumer Confidence Index 99 97 96 94 95 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Biggest concerns of Vietnamese consumers Q1 ‘12 Q2 ‘12 Job security 17% The economy 19% The economy 15% Job security 18% Increasing food Increasing utility bills prices 14% (electricity, gas …) 12% Vietnam rank: 16th Source: Nielsen Global Survey Consumer Confidence Section Base: All respondents, n=502
  • 42. Hardship continues, forcing consumers to further manageexpenses Actions to save on Shopping frequency household expenses 39% Save on gas & electricity 70% Weekly 64% Cut down OOH entertainment 63% 59% Spend less on new clothes 63% Every 2 weeks 36% Delay upgrading technology (e.g. PC…) 53% 2011 2012 Cut down telephone bill 51% Source: Nielsen Shopper Trends Study 2012 Base: All Supermarket shoppers (n = 1500) Source: Nielsen Global Consumer Confidence Survey, Q2 2012 (n=438) 42 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 43. Same savings allocation, but less money. What doesthis mean? Global discretionary spending & savings % Allocation of Vietnamese household income 66% (-3) 6 11 Studying Daily expenses 54 Travelling 49 Shopping (clothes) Buying luxurious items 3 4 6 6 7 7 Others 7 7 Savings 16 15 Investment 1 1 Q1 2012 Q2 2012 Source: Nielsen PFM ; All respondents in each Q1, Q2 (n=1800) Source: Nielsen Global consumer confidence survey Q2’12
  • 44. Consumers’ investmentusage & attitudes 44 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 45. ‘Peer recommendation’ becomes more crucial, alsoimpacting consumer perception toward bank imagery… Source of bank brand awareness Q4 ’12 Q1 ’12 Q2 ‘12 TV 66% 59% 75% Recommendation from friends/ family…. 23% 29% 64% Billboard 47% 52% 61% Print 45% 32% 40%  Has a wide range of products & services  Is strongly recommended by everyone  Has efficient processes/ procedures Bank imagery 45 Source: Nielsen PFM; Those aware of banks in each quarter (n=663, 685, 793) in Q21 & Q107 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 46. … and this is a similar factor influencing non-users andtheir trust towards banks Key triggers for using banking products/ services Quick & simple application o Reputation procedure (67%) o Financial capability Prestigious bank (50%) o Recommendation from othersConvenient To show its prestige, banks should receive some kinds of awards at yearlocation (35%) end. For example, VCB receives some retail banking awards. When we enter the bank, we see the certificates. Non-bank customers 46 Source: Nielsen PFM; Q61 – Non-banked respondents in Q2’12 (n=1007) Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 47. ‘Deposit/savings’ depicts usage increase and also higherintention  A more ‘secure’ way for saving during the ambiguity? Awareness Current usage N12M intention Q1 ‘12 Q2 ‘12 Q1 ‘12 Q2 ‘12 Q1 ‘12 Q2 ‘12 Transactional account 100 100 31 37 27 28 Deposit/ saving account at 100 100 6 10 15 23 banks ATM/ Debit card 100 100 30 36 27 25 Credit card 22 27 1 5 7 47 Source: Nielsen PFM; All respondents in each quarter (n=1800) Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 48. Besides ‘Interest rates’, ‘Trust/Security’ is vital forconnecting with consumers’ savings; whilst ‘Promotion’appeals to less risk adverse consumers Key reasons for choosing a bank for deposit/ savings I deposit in this bank, but if I saw other banks having higher interest rate, I would withdraw and deposit my Interest rates money into that bank. After some months, I still can withdraw and deposit in another bank Trust/ Security We put the same amount of money but we have something else, it bring us more benefits even when they are just small gifts like frying pan or a lucky Promotion? draw ticket 48 Source: Nielsen PFM; Nielsen QualiXpress Groups (Aug’12) Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 49. Personal recommendations is still a key driver; thoughself-reliance trumps other information sources Making decisions on personal finance/ wealth management Self-reliance & do not trust 42% 49% 41% 52% anyone else Friends, relatives & 24% 15% 16% 9% colleagues for advice Investment tips from commentators/ 14% 7% 12% 9% experts… on TV, Radio, Internet Financial planners & advisors 12% 25% 25% 23% 49 Source: Nielsen Global survey on Investment (Q2’12) Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 50. Unlike their global counterparts, Vietnamese womenmay be a bigger source of growth for banks % of Population that Invest Attitude towards investment risk I can accept considerable investment volatility (+/-15%) Stock 8.4 8.5 7 7 6 Partnership 7.5 7.5 Real estate 6.1 6.6 50 Risk rating on a scale from 1 to 10; 10 being most risky & 1 least risky Source: Nielsen PFM; Q116 Male (n=596), Female (n=1204); Nielsen Global survey on Investment (Q2’12) Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 51. Offline customer experience remains a key factor forbusiness growth Channels used for investment Channels used in P6Ms (%) transaction in P3Ms % 45 3 37 84 27 6 51 Source: Nielsen PFM; Q26 - Bank users in Q2’12 (n=793); Nielsen Global survey on Investment (Q2’12); Nielsen HK PFM (Q1’12) Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 52. Offline vs. Online 52 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 53. Banks’ increasing efforts in getting consumers moreengaged with modern channels via value added services 53 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 54. Yet, still limited usage and therefore, consumers’interactive education is key to encouraging more trial Awareness % Current usage Internet Banking Q1 ’12 Q2 ’12 Q1 ‘12 Q2 ‘12 46 36 3 3 37 37 Mobile Banking 50 41 3 5 23 56 I have been told by the bank staff about online service but she wasn’t very persuasive. I have a loan in Key concerns the bank and I’d rather go there to pay, it makes me Safety feel safer Trustworthiness 54 Source: Nielsen PFM; Q120 - Bank users in each quarter (n=685; 793); Nielsen Global survey on Investment (Q2’12), Nielsen HK PFM Q1’12 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 55. ‘Safety’ and ‘Trust’ are critical to ATM/ Debit cardacquirement with consumers Key reasons for choosing a bank for ATM/ Debit card (Q2’12) • Convenient/Safe location of ATMs (67%) • Safety of the card (57%) • Issued by a trusted bank (49%) ATM/ Debit card • Recommended by friends, relatives… (39%) • Attractive card design (19%) Source: Nielsen PFM; Q40; Q126 – ATM/ Debit card users in Q2’12 (n=673) 55 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 56. Cash is King but payment via credit card remains a goodopportunity, but need to address ‘Safety’ and ‘Trust’ Almost 100% use ‘Cash’ for general shopping, dining, travelling… Current usage Usage intention in N12Ms Q1 ‘12 Q2 ‘12 Global APAC 5 7 >50% 59% Credit card 1. Card safety Key reasons for choosing a 2. Issued by trustworthy bank bank for Credit card 3. Low interest rate 56 Source: Nielsen PFM; Q10 – Those aware of credit card in each quarter (n=399; 473); Nielsen Global survey on Investment (Q2’12) Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 57. Food forThought 57 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 58. Food for Thought  Consumers are “really” concerned about the economy  Trust and security are vital to our banks success  How do consumers really feel about us in this area?  And interest rate – but how much control do we have over this?  In-store banking is still critical to our success  How do we measure success in this area?  How do we maximize in-store communications?  Where to next? Online, mobile… 58 - Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 59. Questions? 59 Title of Presentation Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 60. Thank you vn.nielsen.com www.twitter.com/nielsenvietnam www.facebook.com/vietnamnielsen 60 Copyright © 2010 The Nielsen Company. Confidential and proprietary.
  • 61. Nielsen Vietnam 61 Copyright © 2010 The Nielsen Company. Confidential and proprietary.