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    Cambodia, Laos, Myanmar and Vietnam - where is the final frontier? Cambodia, Laos, Myanmar and Vietnam - where is the final frontier? Presentation Transcript

    • Cambodia Laos MyanmarCambodia, Laos, Myanmar and Vietnam 1 Where is the final frontier?
    • Today's Agenda • CLMV at a Glance • Opportunities in Key Industry Verticals • Modern Women in CLMVModern Women in CLMV 2
    • L ti G th P t ti l A th R i Why CLMV ??? Lucrative Growth Potential Across the Region GDP per Capita  CAGR 9 3% GDP per Capita  CAGR 5 5% CLMV– CAGR 9.3% Increase of Volume CAGR 5.5% Increase of Volume –Whereisthe 1,452 1,133 2011 2017 Volume Goods Import 9.1% 2011 2017 Volume Goods Import 18% finalfrontier? 752 741 GDP per Capita  CAGR 8.9% 3 ? GDP per Capita  CAGR 8.7% 2,173 2,295 2017 Increase of Volume Goods Import 7.4% 2011 1,173 2011 2017 Increase of Volume Goods Import 9% 1,105 1,173 vietnam.bc@ipsos.com3 7.4% 2011 Source: The World Bank, IMF
    • B i E i f th I t ti l B i Doing Business in CLMV Becoming Easier for the International Business Rankings for Trading Across Borders CLMV– 2013 20132013 118 160 74 No  R ki –Whereisthe 2010 20102010 127 168 74 Ranking finalfrontier? Positive signals in the region as shown by improvement in rankings for “Trading Across Borders” - World Bank Doing Business 2013 report 4 ? Cambodia and Laos soar in the ranking when you compare from 2010 to 2103 vietnam.bc@ipsos.com4 Source: Doing Business 2013: Doing Business in a More Transparent World, The World Bank,
    • Total FDI Disbursement (USD Billions) FDI in CLMV 11 11 10.5 2010 2011 2012 CLMV– 0.4 0.72 0.58 1.4 1.03 0.76 1.8 1.58 1.9 –Whereisthe Cambodia’s market economy, abundant natural resources, rising tourism industry, cost-effective labour pool and li i l bili h l i i f i i M h l f bl li i finalfrontier? political stability are helping it to attract foreign investment. Moreover, the government also set out favorable policies to direct foreign investors 'attention to the country by offering very generous investment incentives to investors Lao PDR has also experienced an upwards trend in FDI disbursement in the recent years. Its recent WTO membership should help to make it a more viable destination for foreign investment. Myanmar is a new, emerging economy with a large population and significant natural resources. Myanmar is 5 ? 5 Myanmar is a new, emerging economy with a large population and significant natural resources. Myanmar is undergoing political and economic reforms, which will attract major foreign trade and FDI once the laws are in place. Vietnam’s large pool of skilled and inexpensive workers remains a key factor for attracting foreign investors. The total FDI disbursement has followed a steady upward trend during the period of 2010 – 2012 as Vietnam has been one of the fastest-growing economies in Asia in recent years, vietnam.bc@ipsos.com Source: World bank Economic Monitor, General Statistic Office Vietnam
    • Where are the Opportunities? KEY GROWTH INDUSTRIES CLMV––Whereisthe Agribusiness Renewable Energy Manufacturing finalfrontier? Automotive Construction Manufacturing 6 ? vietnam.bc@ipsos.com
    • Renewable Energy
    • Renewable Energy in CLMV Solar 2% H d ill b th i f bl Biomass 9% 2% Hydro energy will become the main source of renewable energy in CLMV region within 2030 timeframe. Laos is targeting to become the "Battery of Southeast Asia" Wind energy is becoming more common in usage due to CLMV– Wind 23% Targeted  27,120 MW high investment in Vietnam with support from government –Whereisthe Thermal energy 3% Wind 1% Solar 1% Hydro 67% finalfrontier? Biomas Hydro 39% Existing 464 MW Year 2030 8 ? s 56% 39% 464 MW vietnam.bc@ipsos.com Year 2010 Source: Renewable Energy Policy Network for the 21st Century
    • Future of Renewable Energy in CLMV Year 2010 Year 2025-30 80% 90% 100% 80% 90% 100% Year 2010 Year 2025 30 CLMV– 50% 60% 70% 80% Thermal Solar 50% 60% 70% 80% –Whereisthe 10% 20% 30% 40% Solar Hydro Wind Biomass 10% 20% 30% 40% finalfrontier? 0% 10% Biomass 0% 10% 9 ? Hydro power will be a main source of energy provide in Southeast Asia generated by Laos and Myanmar. Cambodia will focus on Solar energy and will provide 70% of rural with electricity by using solar energy. Hydro power will be a main source of energy provide in Southeast Asia generated by Laos and Myanmar. Cambodia will focus on Solar energy and will provide 70% of rural with electricity by using solar energy. Vietnam has the highest of MW capacity and technology adoption of the four countries. Biomass is widely use in CLMV countries because of the low cost and the ability to use the waste from agriculture products Vietnam has the highest of MW capacity and technology adoption of the four countries. Biomass is widely use in CLMV countries because of the low cost and the ability to use the waste from agriculture products vietnam.bc@ipsos.com agriculture productsagriculture products Source: Data consolidated from government agencies and Ipsos Business Consult analysis
    • Renewable Energy- Investment S l j t i ti Projects in operation Houay Ho Hydropower (150 MW) Theun-Hinboun Hydropower (210MW) P j t d t ti Solar project in operation Solar Home System (10Wp per household) for 12,000 in rural areas. Hydro project under construction joint venture with Plan to supply CLMV– Project under construction Nam Theun 2 Hydropower 1080 MW) Nam Ngum 2 Hydropower (615 MW) Xe Kaman 3 Hydropower (250 MW) Theun Hinboun Expansion (260MW) y p j j China Stung Tatay hydro project (246 MW) Small hydro (10 MW) supply Vietnam and Thailand –Whereisthe Wind Power project under plan Theun-Hinboun Expansion (260MW) Project under construction finalfrontier? Thuan Bac district wind power (200MW) by Trung Nam with USD 500 M investment fees Bac Lieu wind park (16 MW) by GE Hatgyi Hydro Power project (1200 MW) Shweli River Hydro power ( 600MW) Upper Thanlwin Dam (Kunlong) ( 2400 MW) 10 ? Hydro Power project under construction Son-Song Hinh Hydropower (220MW) Lai Chau Hydroelectric project (1200 MW) by EVN with USD 1.77 bn. Small hydro projects at Dakdrinh ( 156 MW) Solar Project under construction Auk Pyun Wa Village by Solar System (85 Wp) vietnam.bc@ipsos.com Small hydro projects at Dakdrinh ( 156 MW) Source: Data consolidated from government agencies, research paper and Ipsos Business Consult analysis
    • Support and Future Plan for Renewable Energy in CLMV Government provide public investment loans or financing for renewable investment Provides incentives for renewable energy usage: mini hydro and solar energy 2020 Master plan, all villages will have access to electricity of different forms; and the year 2030 70% of all rural Households will have access grid quality electricity CLMV– Governments launched Renewable Energy Development Strategy focuses on bio fuels, bio gas, and hydro power that not yet explored Government has plan to use hydro power to eradicate poverty and supply to neighborhood countries e.g Vietnam and Thailand –Whereisthe g g Aims to increase share of renewable energies to 30% of the total energy consumption by 2025 To maintain the status of energy independence T t id f d bl f finalfrontier? To promote wider use of new and renewable sources of energy To promote energy efficiency and conservation To promote use of alternatives fuels in household 11 ? Financial Incentives on tax incentives and Capital subsidy, grant, or rebate. Provide tradable renewable energy certificate ( REC) Generate 5% of its energy supply from renewable by 2020 and 11% by 2050 vietnam.bc@ipsos.com Source: Information consolidated from country development plan and Ipsos Business Consult analysis
    • Agribusiness-RiceAgribusiness-Rice Industry
    • CLMV - Rice Production CLMV– Myanmar Area(Mil Ha): 8 Yield(Kg/Ha): 4,067 Laos Area(Mil Ha): 0.8 Yield(Kg/Ha): 3,606 –Whereisthe Production(MMT) 33 Export(000'MT) 2% Production(MMT) 3 Export(000'MT) 1% finalfrontier? Cambodia Vietnam ? Area(Mil Ha): 3 Yield(Kg/Ha): 2,836 Production(MMT) 8 Area(Mil Ha): 7 Yield(Kg/Ha): 5,228 Production(MMT) 39 13 Stable IncreasingDecreasing Export(000'MT) 2% Export(000'MT) 9% vietnam.bc@ipsos.com Stable IncreasingDecreasing Source: Asian Development Bank, FAO and Ipsos Business Analysis
    • Current Rice Harvesting System A.14 days of surface preparation B ~100 days of planting and harvesting C. Selling and Export CLMV– Rice mill manufacturer selling in domestic or export After planting or sowing , farmer has to take care of the farm by protect from pest and put in fertilizer. 7 Days of planting or sowing –Whereisthe Phrase finalfrontier? Rice and paddy transportation 6 wheel truck 10 wheel truck Practice Planting and sowing 1. Machinery Seeder, planter, trans planter 2.Labor Surface Preparation 1.Machinery Cultivation tractor Track-laying tractors Harvesting 1. Machinery Combined harvester 2.Labor 14 ? Current 2.Labor 3.Buffalo vietnam.bc@ipsos.com Source: Country association interview and Ipsos Business analysis
    • Future Trends of Rice Harvesting System A.7 days of surface preparation B ~100 days of planting and harvesting C. Selling and Export CLMV– Rice mill manufacturer selling in domestic or export 2-3 Days of planting or sowing –Whereisthe Phrase finalfrontier? Trend Rice and paddy transportation 6 wheel truck 10 wheel truck Planting and sowing 1. Machinery Seeder, planter, trans planter 2.Labor Surface Preparation 1.Machinery Cultivation tractor Two-wheeled tractor Harvesting 1. Machinery Combined harvester 2.Labor 15 ? Future  Track-laying tractors 2.Labor vietnam.bc@ipsos.com Source: Country association interview and Ipsos Business analysis
    • CLMV Agribusiness – Machinery Usage Export of Agricultural machinery from Two-wheeled tractor is id l d iExport of Agricultural machinery from  Thailand in 2012 by country very widely used in CLMV agriculture. Cheaper than other tractor Time and energy saving Many rental service in CLMV– Cambodia 30.0% Malaysia 3 0% Others 18.9% CLMV Seeder, planter, and trans planter is rarely –Whereisthe Vietnam Indonesia 4.3% 3.0% trans planter is rarely used in CLMV Expensive but very accurate and consistency Use of manual labour is prefer in the planting finalfrontier? Laos 10.0% Myanmar 8 1% India 7 6% USA 7 1% Japan 6.5% 4.5% prefer in the planting phrase Combined harvester is in less use in CLMV. 16 ? 8.1%7.6%7.1% Expensive but both time and energy saving Common use manual labour because perception of better quality vietnam.bc@ipsos.com q y Source: Machinery Intelligence Unit and Ipsos Business Analysis
    • Rice Harvesting – Government Support and Barriers Governments SupportGovernments Support BarrierBarrierpppp Budget constraint No access of infrastructure Lack of irrigation Millers have low access to foreign markets 10-20 years plan to expand irrigation and water management Infrastructure improvement e.g. roads , railways, and warehouse Provide knowledge and support e g CLMV– Budget constraint No access to good infrastructure Lack of irrigation and seed quality L k f k l d Provide water body for agricultural farming Develop linkages between t k h ld d i i Provide knowledge and support e.g. farming system, input and tools –Whereisthe Lack of knowledge Geographical disadvantage on rice farming because of land lock and mountainous geographical High budget constraintProvide knowledge by Ministry of stakeholders and improving access to markets finalfrontier? g g No access of infrastructure Lack of irrigation Limited access of export due to government control g y y Farmer Provide microfinance Given rental on machinery Development plan on infrastructure 17 ? Farmers starting to change to growing coffee, cassava, and rubber. Unstable rice price due to limited buyers Limited private companies in rice export from international investors Provide innovative agriculture machinery e.g. tractor Research and development on seed quality Zoning of rice farming Provide knowledge to farmer e g vietnam.bc@ipsos.com Provide knowledge to farmer e.g. cultivation system Source: Data consolidated from country ministry and association
    • Automotive
    • Motorcycle in CLMV Market size (2012) Growth (2012) Top Brand Trend and Opportunities (2012) (2012) p pp • Personal relationship and local partner are the key to successful for business in Cambodia • Most of motorcycle import are Japanese 233 K Units 7% CLMV– • Most of the motorcycle import from Japan and China brands with production plants in Thailand, China and Vietnam 111 K 13% –Whereisthe • Mandalay has become the front line in the motorcycle market share since a ban on Japan and China • Kolao is the main domestic motorcycle manufacturing in Laos Units 13% finalfrontier? motorcycle market share since a ban on riding in Yangon • Chinese-made bikes such as Kenbo, Luojia, Zongshen are gaining more popularity in Myanmar due to price factor 19 63% 1.2 Mil Units ? • Honda is very strong brand in Vietnam with 64% shear in Local market with there own plant specialize in produce motorcycle part 1.3 Mil Units 4% vietnam.bc@ipsos.com Source: National Statistic from each country Note: Growth rate calculated based on increased of registered vehicles in 2012
    • Passenger Car in CLMV Market size (2012) Growth (2012) Top Brand Trend and Opportunities (2012) (2012) Top Brand Trend and Opportunities • The majority of cars are imported second- hand Japanese vehicles. • Mostly customer choose Toyota because f t il bl d ff d bl 21 K Units 6% CLMV– • The second hand car not allowed to import • Hyundai is the most successful brand in the market due to the first move advantage on of parts are available and affordable 34% 8 K –Whereisthe • Most of Myanmar people like Japanese car. Toyota is the most poplar brand in the market due to the first move advantage on promotion and financial loan for vehicle 34%Units finalfrontier? • Toyota is the most poplar brand in the country due to the first Japanese import car and propel belief that Toyota machine is strong than the other. T l ti b t 20 38 K Units 14% ? • Tax regulation became a very strong barrier for buying new cars that why Toyota who have there own assembly is the most successful. • In 2012, the market were impacted by the bad debt crisis which effected the -40%60 K Units vietnam.bc@ipsos.com the bad debt crisis which effected the loan approval for auto. Source: National Statistic from each country Note: Growth rate calculated based on increased of registered vehicles in 2012
    • Investment Scheme in Automotive Industry Current plant On going Incentive Tax Free Trade Area (FTA)Current plant g g plant Incentive Tax Free Trade Area (FTA) • Vat exemption policy for the investor who invest in special economic zone with no specific • No Free trade area CLMV– • The other countries beside FTA countries will have to apply MFN (General Most- • Have policy for the investor such as special economic zone which reduce tax for 10 years and reduce to 5- o e t o spec c time limit –Whereisthe • The Government Incentive, they have no spare part tax (General Most Favoured-Nation) scheme for any export goods to Lao PDR. 10 years and reduce to 5 10% from 40% import tax • No Free trade area finalfrontier? • Complete knock down vehicles can enjoy a lower taxation rate they have no spare part tax to promote the assembly in Myanmar • ASEAN, all of the Complete Built-in vehicles made and imported from 21 ? taxation rate • Government incentive for investor in Special economic zone such as incentive tax rate for 15 year and Incentives in tax made and imported from any ASEAN country will be taxed at 0% in 2018 • WTO, its Complete Built- in vehicles import tax is expected to be 70% in vietnam.bc@ipsos.com y exemption and reduction tax 50 percent for a maximum four years p 2014 and 47% in 2017 Source: Primary Interview and Ipsos Analysis
    • Manufacturing
    • Importance of Manufacturing in CLMV C t ib ti f M f t i t t GDP 20.0% 25.0% P Contribution of Manufacturing sector to GDP CLMV– 5.0% 10.0% 15.0% %ofGDP –Whereisthe 0.0% 2005 2006 2007 2008 2009 2010 2011 Cambodia Lao PDR Myanmar Vietnam finalfrontier? • Vietnam is the leading country in the total output value of the manufacturing sector which reached USD 23.6 billions in 2011. It also has the highest number of manufacturers compared to other three markets. • Subsequently, the manufacturing sector in Vietnam accounts for nearly 20% of GDP in 2011 consistently throughout Key insight ? 23 q y g y y g the years. Meanwhile, Myanmar has also experienced a steady growth in total output value of the manufacturing sector and significantly increasing its share in the total GDP. Due to the recent economic reforms in 2011, Myanmar’s domestic industries are modernizing and industrializing. • In contrast, the manufacturing sector in Cambodia and Laos is not growing strong due to the fact that industry sector still lag behind agriculture and services. vietnam.bc@ipsos.com g g Source: Asia Development Bank, General Statistic Office of Vietnam, Cambodia National Institute of Statistics, Ministry of Industry Myanmar,
    • Key Subsectors of Manufacturing 3% 15% 19% Others Rubber Others CLMV– 4% 3% 7% 10% 37% 54% Wood, Paper and Publishing Rubber Others Others Wood industry Construction material –Whereisthe 5% 5% 63% 25% 25% 13% Chemical Basic metals Textile and garment Construction Textile and garment Mining finalfrontier? 39% 7% 6% 8% 25% Food and beverage Fabricated metal product Non-metallic Basic metals Textile and garment Construction material ? 24 15% 17% 23% Cambodia Laos Myanmar* Vietnam Food and beverage Food and beverage Food and beverage vietnam.bc@ipsos.com Source: General Statistic Office Vietnam, Council for Development in Cambodia, Ministry of Industry and Handicraft Note: No official breakdown for Myanmar. The breakdown of Myanmar estimated from various sources
    • • Open door policy: (1) 100% foreign equity ownership investments are allowed except for the Government Incentives and Support • Open door policy: (1) 100% foreign equity ownership investments are allowed except for the ownership of land (2) Free remittance of foreign currencies abroad • Investment incentives: (1) 20% Corporate Tax (2) Full import duty exemption G d li i f k U il t l t d t ith 39 t i d tti CLMV–W • Good policies framework : Unilateral trade agreement with 39 countries and setting up industrial park projects and calling investments for manufacturing sectors • Investment incentives: (1) Exemption from import duties and taxes on raw materials and capital equipment using for production (2) Tax holiday offered and Corporate income tax exemption up to 10 years (3) Reduced tax rate for large projects with special concession are Whereisthefin exemption up to 10 years (3) Reduced tax rate for large projects with special concession are available upon negotiation • Land used Investor has a right of the grantee of land leases or land used from government owned land, governmental department, organization owned lands and citizen owned private lands nalfrontier? E i i t t d ti f t i l d f t i f • Investment incentives: (1) A 5-year tax holiday (2) Up to 50% income tax relief on profits gained from exported goods (3) Exemption from customs duty on machinery (4) Exemption from customs duty on raw material (5) Exemption from commercial tax on imported goods 25 • Encouraging investments on production of new materials and new energy; manufacturing of products of high-technology, bio-technology, information-technology and mechanical production. • Investment incentives: (1) Corporate Income Tax exemption and reduction from the first profit making year (2) A preferential Corporate Income Tax of 10% and 20% (3) Import duty vietnam.bc@ipsos.com making year (2) A preferential Corporate Income Tax of 10% and 20% (3) Import duty exemption on the importation of equipment, materials for implementation of investment projects in Vietnam Source: General Statistic Office Vietnam, Council for Development in Cambodia, DICA Myanmar, Lao Investment Department
    • Key insight Future Outlook of Manufacturing • Cambodian The economy is expanding, driven by agriculture, tourism, garment exports and construction. The country’s growth boom would be the factor to boost up demand and consumption of goods Forecasting total output value of manufacturing sector in 4 markets boost up demand and consumption of goods driver for manufacturing sector. • Lao PDR WTO membership should bring Laos new opportunities for manufacturing sector, especially garment as it will help to unlock new k t i t d fl d f i 40 50 60 70 80 90 D (Billions) market, increase trade flows and foreign investment. • Myanmar Sizable economy and market in Asia that remains untapped. Due to the political and economic reforms in 2011, its domestic industries are modernizing and 2012 2013 2014 2015 2016 2017 2018 Cambodia 2.09  2.23  2.37  2.52  2.68  2.86  3.04  0 10 20 30 USD industrializing. Looking to attract foreign investors with tax breaks and exemptions targeted at the manufacturing sector. Currently, the manufacturing sector, especially garment and apparel, is a very potential low‐cost manufacturing base as it operates Laos 0.83  0.89  0.96  1.03  1.11  1.19  1.28  Myanmar 9.25  9.76  10.36  10.95  11.58  12.26  12.98  Vietnam 32.63  47.04  50.05  53.35  56.93  61.03  76.75  26 with low overheads and wage rates. • Vietnam Enjoy a growing inflow of direct investment into its manufacturing sector in recent years as its accession to WTO in 2007. Low labor costs have made it an attractive vietnam.bc@ipsos.com outsourcing destination for apparel manufacturers and electronic producers. Continued strong foreign investment into the manufacturing sector will remain the prime driver of growth in the next few years. Source: World Bank, Business Monitor
    • ResidentialResidential Construction
    • Residential Construction- Growth Catalyst Cambodia • Economic growth with strong investment from China • Increasing of residential construction in satellite towns as Laos CLMV– Economic growth with strong investment from China and urbanization drives the demand of residential construction in the key cities • The Cambodian government wants to develop the tourism sector with a target of 6 million tourists by 2020 which will improve overall peoples income and Increasing of residential construction in satellite towns as the impact of rail link development in North-South (with China) and East-West (linking Laos, Thailand and Vietnam) • New residential construction in the major cities such as Vientiane, Pakse, Savannaket and Luang Prabang are –Whereisthe 2020 which will improve overall peoples income and eventually drive the demand of residential construction. as Vientiane, Pakse, Savannaket and Luang Prabang are expecting to growth at 20% per year Myanmar Vietnam finalfrontier? 28• As the Myanmar economy opens up, an influx of people are moving to the cities requiring more residential construction. Y M ' l i i k b • In the key economic cities, the demand for residential real estate is increasing due to people having more discretionary income. ? • Yangon, Myanmar's largest city is on track to become a “mega city” (population in excess of 10 million) by 2040 • Numerous affordable housing projects are part of the Greater Yangon Strategic Development Plan • Vietnam has a large labor force at relatively low costs making it an attractive destination for FDI. As more people move from the rural areas move to the cities to work in factories, more residential construction will be needed vietnam.bc@ipsos.com
    • CLMV Development of Construction Practice Myanmar • Coated steel roofing materials, cement roof tiles, • Brick & mortar walls, timber walls • Concrete mold floorings, wood floorings Construction Materials , Methods &  Technology CLMV– floorings • Aluminum, wood frames • Decorative aluminum facade panels Vietnam Vietnam leads the pack in construction technology and quality materials due to heavy investment by foreign investors & foreign building material brands due to the attractiveness of the economy & market. –Whereisthe Laos • Coated steel roofing materials cement roof tiles finalfrontier? 29 materials, cement roof tiles, • Brick & mortar walls, timber walls • Concrete mold floorings, wood floorings • Aluminum, wood frames ? Cambodia Due to low economic development and lack of natural resources the construction materials sector has not seen much growth in terms of methods and technologies. vietnam.bc@ipsos.com
    • Residential Construction Practices and Trends Area ofArea of Residential Construction(M2) Current Practice Trend and Opportunities • No major changes in trend is expected for the next few years. As the economy grows more urban residential construction • Labor intensive construction methods. In urban areas mostly brick and cement but in12 9 CLMV– • As the cities expand, apartment style commercial buildings (multi storey grows more urban residential construction is expected especially in Phnom Penh. • Brick, cement and steel materials popular A lot of the mostly brick and cement but in the rural areas temporary materials such as thatch, bamboo & leaves are used. 12.9 Mil –Whereisthe • Pre-cast concrete is expected to be one commercial buildings (multi-storey townhouses) become more popular. Building methods not expected to shift for the next few years. materials popular. A lot of the practices influenced by Thailand due to heavy Thai investment in the construction materials sector. • Mostly still labor intensive 4.5 Mil finalfrontier? Pre-cast concrete is expected to be one of the next upcoming trends • Future buildings will have to follow the new Myanmar building code which emphasizes on protection against cyclones and minor earthquakes • Mostly still labor intensive construction methods using brick & cement. Now steel frames structures becoming normal use. 30 74.5 Mil ? • As people have higher incomes ,high end residential apartments & condominiums with quality furnishings are expected to be huge growth sector. • Higher usage of modern construction • Heavily rely on brick and cement for residential retail construction while for residential projects pre fabricated concrete are 97.8 Mil vietnam.bc@ipsos.com g g practices such as PEB ( Pre engineer building) or non baked bricks made from industrial waste preferred Note: Area calculation based on new registered residential building in 2012
    • Consumer Goods
    • Emerging of Middle Class Income in CLMV Asian Development Bank indicated that Vietnam, Cambodia and Laos are likely to see a significant growth in the middle % Change of Population Earning More than 4 USD/person/day CLMV– to see a significant growth in the middle class population in 2030. Vietnam is at the top of the growth table with 40% increase of middle class income earners within 2030, whilst –Whereisthe income earners within 2030, whilst Cambodia and Laos are forecast to have more than 25% increase in middle class income earners. finalfrontier? 32 ? vietnam.bc@ipsos.com
    • Who are those in Emerging Middle Class? 9% 4% CLMV– 32% 55% 170 Million –Whereisthe Female 50.2% Male 49.8% 15-24 By Age Group finalfrontier? 3325-54 ? 55-6465 Above 0-14 vietnam.bc@ipsos.com Above
    • Capture Those Female Middle Class CLMV– We need to understand –Whereisthe Female 50.2%We need to understand them finalfrontier? 34 ? vietnam.bc@ipsos.com
    • TheTheTheThe FinalFinalFinalFinal Frontiers?Frontiers? Modern Women inModern Women in CambodiaCambodia LaosLaos Myanmar &Myanmar & Frontiers?Frontiers? Modern Women in Modern Women in Cambodia, Cambodia, Laos,Laos, Myanmar & Myanmar &  VietnamVietnam 2626thth Jun'13Jun'13
    • Qualitative... ...Understanding not...Understanding not measurement.. In-country expert interviews In-country social commentators I & th h t l t iIpsos & other research talent in country / in-region FMCG clientsFMCG clients 36
    • …and why focus on understanding CLMV– understanding womenin CLMV? –Whereisthefinalfrontier? Why notWhy not 37 ?
    • We need to be l t t Asiarelevant to women in Asia because they are on the rise! 38 Growth is in Asia (Pacific) vietnam.bc@ipsos.com Growth is in Asia (Pacific) Global output is expected to increase by 18%
    • APAC statistics show… CLMV– …women in AP will outnumber men by 2015 …women’s advancement is on the rise –Whereisthe • Higher education • Better integration in the workforce • More have managerial positions • More have above median income finalfrontier? More have above median income 39 ? …and the implications?
    • Means… …more individual and family spending power …increasingly in command of a highercommand of a higher discretionary spend …annual growth of 1.7% in disposal 40 p income vietnam.bc@ipsos.comSource: Book entitled ‘Holding Up Half of the Sky: The New Women Consumers of Asia’ by Dr. Yuwa Hedrick-Wong
    • Typically the catalyst for female empowerment is anTypically the catalyst for female empowerment is an economic necessity which leads to the introduction of women into the workforce—and eventually, theiry, integration. 41
    • But not all women in CLMV are one and theCLMV are one and the same, as influenced by CLMV– by… Culture –Whereisthe Culture Religion Economy finalfrontier? Economy Tradition 42 ?
    • 4 markets with great4 markets with great development potential. Yet the longestVietnam Yet the longest development path. Vietnam MyanmarMyanmar And.... Laos Significant 43 C b di opportunities for inter country vietnam.bc@ipsos.com Cambodia trade
    • Women in some countriesWomen in some countries are "evolving" faster than the othersothers 44
    • E tk Empowermentworame Liberation e frag th T i ettin Tension se 45
    • liberal South Korea Similarities across countries Countries whose tensions have evolved beyond the Empowerment - Liberation Australia + NZ beyond the Empowerment - Liberation tension Singapore Philippines Hong Kong Malay Malaysians Japan China Malaysia Malay Malaysians move down to a more traditional zone Vietnam Countries whose tensions still revolve empoweredlimited India Vietnam Myanmar Laos Cambodia Countries whose tensions still revolve around expectations of society (Empowerment – Liberation Tension)Indonesia Laos conformist 46
    • South Korea liberal Seeking  PerfectioLiving life Key  differences South Korea Australia + NZ Perfectio n Moral  pressure Living life  to the  fullest Balance  and Singapore Philippines Hong Kong Perpetual  self‐ Pragmatic  Conforming in a pressure and  diversity Vietnam Japan China Malaysia self appraisal progressConforming in a  segment society Maximizin g choices Vietnam Myanmar Laos Cambodia India empoweredlimited Subdued  power and  progress Cannot be  the odd  one out Identity within Progressing but  assuaging guilt Laos Indonesia Identity within  traditional  bounds conformist 47
    • Let's consider who these womenLet s consider who these women are in CLMV? 48
    • Cambodia 49
    • Lif h b h f h C b di l hLife has been tough for the Cambodian people; they are still recovering from decades of upheaval that ill h di i h i listill has direct impact to their present lives 50
    • ECONOMIC & CONTEMPORARY SOCIETAL PROGRESS HAS BEEN A SLOW AND A HARD JOURNEY; CAMBODIANS ARE STILL IN THE MIDST OFAND A HARD JOURNEY; CAMBODIANS ARE STILL IN THE MIDST OF RECOVERY AS A NATION CLMV– PEOPLE’S SKILLS ARE NOT COPING  WITH PROGRESS IN ASIA; NOT ABLE TO  COMPETE IN ASIA GOVERNMENT HAS ONLY RECENTLY  BECOME POLITICALLY STABLE;  PRIORITIZING ECONOMIC SUPPORT –Whereisthe COMPETE IN ASIA   • Genocide of intellectuals during PRIORITIZING ECONOMIC SUPPORT • The whole country has just placed finalfrontier? Ge oc de o te ectua s du g Khmer Rouge regime – essentially leaving the people intellectually unequipped to cope with progress y j p the first steps into reconstruction and transformation • Recognition for economic support to 51 ? • Typical jobs are low skill paid job such as factory worker – pushed to take these kind of jobs for survival g pp fuel the local economy
    • Cambodian women struggle to free themselves from the shackles of a patriarchal society towards its path to modernity; but still hopeful for the future ‘The saying goes that Khmer girls are white cotton while a boy is a gem. When white cotton is muddied, it can never be returned to its original state while a dirtied gem can glitter time and again’. Transitional me = PRESENT Future me - Having a strong sense of f ‘Despite the fact that schools have opened their doors to girls, and the  government has made it a priority to get them in the classroom, a  history of prioritizing the education of men has hardly been washed  away’ PRESENT - Relatively better opportunities vs. 5 years ago but compared to self identity and an independent life; being recognized as an equal to men - But even if the future Traditional me - I was born to serve men, still lower chances to succeed - Women’s ideas are less likely to be accepted; traditional role of supporter still dominates in the But even if the future seems to be unreachable now, Cambodian women still look to the future and are hopeful for the realization of thisI was born to serve supporter still dominates in the culture realization of this aspiration 52
    • In order to assist this transition to modernity, the modern woman needs support;, ; both at the society level and her immediate community • There is the desire to be recognized but because of the overall lack of t d thsupport, modern women more than anything have issues on confidence and self esteem • At this period of transition, modernp , women are equipping and building self capability and confidence to be able to progress 53
    • Th f i i i i h C b diTherefore, in communicating with Cambodian women, it is about confidence and enabling the self to take step towards her own progressto take step towards her own progress ntnt safe place to grow vemenvemen acceptance grow external validation mprovmprov RECOGNITION validation confidenceconfidence elfimelfim PROGRESS SS 54
    • LaosLaos 55
    • BUDDHISM HAS STRONG INFLUENCE IN THE LAOS CULTURE TRUE HAPPINESS IS ACHIEVED WITH ACULTURE;TRUE HAPPINESS IS ACHIEVED WITH A CONFLICT FREE LIFE AND CONTENTMENT • Happiness can only be achieved with a pure and peaceful mind • There is much effort put in conforming to theThere is much effort put in conforming to the values of harmony, balance and to a larger extent being content with one’s blessings • Therefore Laotians tend to stick to their own kin and do not attempt to ‘change the world’kin and do not attempt to change the world 56
    • TRADE POLICIES OF THE GOVERNMENT ATTRACT FOREIGN INVESTMENT THAT FUEL THE ECONOMY, PROMOTING EQUAL OPPORTUNTIES FOR WOMEN IN THE WORKFORCE • Laos GDP growth is at 8.2% in 2012 • After the Liberation, special measures such as open trade policies, access to better educationp p and championing gender equality were conducted to utilize the enormous female labor force in revitalizing the economy • Women’s participation in the economy has• Women s participation in the economy has therefore greatly increased in the past decade • More white-collar jobs for women e.g. women make up 50% in commerce, 48.8% in public health, 22-25% in public service and 50% in education 57
    • THERE IS OPPORTUNITY FOR PERSONAL PROGRESS AND ACHIEVEMENT, HOWEVER THE TENSION OF LAOTIAN WOMEN IS BALANCING THIS AMBITION WITH THE BUDDHIST VALUE OF CONTENTMENT • There is considerable individuality with Laotian women as they have became more independent economically and spiritually • Opportunities also present themselves in career options• Opportunities also present themselves in career options • However, modern women live with an internal struggle to find the balance between their ambition and the negatives that may come with it (materialbetween their ambition and the negatives that may come with it (material attachment, pride and arrogance) with the deeply ingrained value of contentment and balance 58
    • Th f i i i i h L iTherefore in communicating with Laotian women, it's about empowerment within the bounds of moderationof moderation ee harmony enceence boundaries grounded empowerment tt pendpend boundaries CONTENTMENT p balance notnot indulgentindulgent ndepndep indulgentindulgent inin 59
    • Myanmary 60
    • The key theme for M l “Women can now“Women can now work but still as awork but still as a Myanmar women revolves around tt supporter to thesupporter to the husbandhusband——not as anot as a breadwinner ”breadwinner ” empowermentempowerment breadwinner.breadwinner. …as women are now…as women are now “A typical single woman“A typical single woman is working in ais working in a ffiffiencouraged to work, mainly forencouraged to work, mainly for economic reasons. But womeneconomic reasons. But women are still not expected to be theare still not expected to be the companycompany——an officean office staffstaff——and she pursuesand she pursues her hobbies andher hobbies andare still not expected to be theare still not expected to be the breadwinners in the familiesbreadwinners in the families interests. But a marriedinterests. But a married woman is notwoman is not considered aconsidered a 61 'breadwinner'”'breadwinner'”
    • Women in Myanmar are presented withWomen in Myanmar are presented with opportunities as the country is at 'full speed ahead' to development Being at the crossroads of development and tradition, women are given the chance to improveg p their living while still fulfilling the role of being a homemaker—taking care of the husband and kids if married; and the parents if single 62
    • Women have already been recognized in terms of role; now, they seek equality “Inferior” “Perfection”“Equality” “Liberation”“Recognition” As Myanmar opens its  doors to the world, the  demand for labor is high.  In the past  b f Women, especially the  married, are seen as a  “support” to the  husband and just to  h The momentum of Myanmar in terms of  economic progression seems to halo to  the thirst of women to be empowered.  The aim for equality is geared towards the year, Myanmar is beefing  up its manpower in order  to cope with the  expanding market from  manufacturing to service  augment the income.  Married women are  still not seen and  expected to be a  breadwinner. In fact, if  The aim for equality is geared towards the  opportunities presented to both men and  women. But at the end of the day, women  are still expected to take be the household  managerg related industries. As a  result, women started to  be integrated into the  workforce. Also, the  higher cost of living , they spend more time  outside of home—at  work—they feel guilty  and would think that  people around them manager For the single women, there is an increasing  trend of women integrated in the corporate and  ffi k Thi i th th thigher cost of living  pushes the women to  augment the income of  the family or the husband people around them  judge them for not  fulfilling their original  cosmic role office work. This gives them the power to pursue  hobbies and interests. But at the end of the  day, they have to be of servitude to their own  families at home. 63
    • Given that they are now recognized as an integral part of the workforce, their innate tension now is achievinge o o ce, e a e e s o o s ac e g equality—without guilt or judgment “A modern women for me is someone who has a“A modern women for me is someone who has a business or a top executive or CEO of a company.business or a top executive or CEO of a company. She is able to grow her own business of grow herShe is able to grow her own business of grow herg gg g own company. She has a successful track recordown company. She has a successful track record and she is recognized by the society. Of course, Iand she is recognized by the society. Of course, I want to be that modern woman.”want to be that modern woman.” “Hopefully in the future, we will be able to have“Hopefully in the future, we will be able to have more chance to hold higher position without feelingmore chance to hold higher position without feeling guilty that we are spending more time outside ofguilty that we are spending more time outside of home. Sometimes, when I go home late at night, Ihome. Sometimes, when I go home late at night, I think people around me think I am not a good momthink people around me think I am not a good mom since I spend more time outside of home.”since I spend more time outside of home.”64
    • Therefore, in communicating to women in Myanmar, it is about “empowerment” or “equal opportunities” but within the acceptable bounds or should be in the context of others prospering with her prospering togetheraugment DRIVEN BUT NOT SOLELY FOR SELF SUCCESSFUL collectivecollective balance R R supported and supportive SUCCESSFUL BUT WITH AFFIRMATIONpp 65
    • iVietnam 66
    • Vietnamese women are rooted in a strong sense of CLMV– family values –Whereisthe •Generational heritage •Service to family •Respect for elders finalfrontier? p 67 ?
    • Therefore the challenge of a Vietnamese modern woman is to be able to find her own identity t bl b dwithin the acceptable bounds of tradition “I do want to be able to say, ‘This is ME’ – something that goes beyond what is expected of me as a woman”me as a woman 68
    • There is guilt when she crosses the line; an internal struggle brought about by a CLMV– compromise with family traditions –Whereisthefinalfrontier? 69 ? “I have this sick feeling in me whenever I am selfish – when I am not able to give my family what is due towhen I am not able to give my family what is due to them. I feel that I have betrayed them”
    • CLMV––Whereisthe Ultimately, she will try to fit her modernity to her family and will never let her family fit in her finalfrontier? modernity “Daily dinners are always home cooked and are cooked by the wife / 70 ? Daily dinners are always home cooked and are cooked by the wife / mothers. Even if I have a full time job, I make sure that I go home early enough to cook dinner. This is a non negotiable to me. This is what we have done when I was small and I want my children to have this as well”
    • Therefore, in communicating with Vietnamese  women, it is still about “empowerment” or  “opportunities” …within the boundaries of family tradition family validationaffirmation y SELF DISCOVERY affirmation knowingknowing your limitsyour limits support security your limitsyour limits 71
    • CLMV––Whereisthe SO finalfrontier? SO WHAT? 72 ? WHAT?
    • Brands that tap intoBrands that tap into resonating insight buildresonating insight buildresonating insight buildresonating insight build emotional affinityemotional affinity andand loyaltyloyalty Context is KeyContext is Key 73
    • A source of insight A discovery about your A source of insight A discovery about your consumer that opens the door to an opportunity for your brandyour brand. An insight also defines an unmet consumer need Implication: Implementing a superior, differentiated insight will translate to competitive superiority and will lead to competitive advantage 74
    • The 2 Faces of Contemporary Woman CLMV– Should be Could be –Whereisthe Should be Could be finalfrontier? Being seen to subscribe  to societal and cultural  expectations and norms Modifying behaviors to  fit my lifestyle and my needs  75 ? Tensions & Tensions &  ContradictionsContradictions Tensions & Contradictions Tensions & Contradictions provide opportunities for brands…provide opportunities for brands…
    • Frameworks Are A Start Point in Simplifying ComplexityComplexity Rational Emotional Experiential Societal Making sense of a potentially complex consumerMaking sense of a potentially complex consumerMaking sense of a potentially complex consumerMaking sense of a potentially complex consumer 76
    • Real Competitive Advantage • From a marketing perspective understanding contemporary notions and  expressions of contemporary woman provides significant opportunities  tto: – Position brands as relevant and ‘knowing’ (they understand me and my  needs) Demonstrate a greater depth of sensitivity and consumer connection– Demonstrate a greater depth of sensitivity and consumer connection – Deliver more relevant, motivating and ultimately more meaningful product  expressions – Differentiate you from your competitorsDifferentiate you from your competitors 77 Delivering Real Competitive Advantage        vietnam.bc@ipsos.com
    • The Evolution of Mundane? • Washing machine ownership....quest for  delegation  • Freedom time 'me' CLMV– • Freedom, time, 'me' • Yet, hand wash prevails...for some  elements  'Should Be' –Whereisthe ₋ Should Be • The 'Captain of the ship' ₋ She doesn't want to be left behind Equality with her peers family finalfrontier? ₋ Equality with her peers, family,  partners • Depiction of modern women in TVC's  • Activation versus information 78 ? Activation versus information  Suitably equipped to  handle progress
    • Brand MomentumBrand Momentum The perceived visibility of the  brand (advertising  profile, standout at  POP, promotional  activity) BRANDBRAND MOMENTUMMOMENTUM 79
    • Questions?Questions?Questions?Questions? vietnam.bc@ipsos.com 80
    • www.ipsosconsulting.com A UNIQUE TEAM OF DEDICATED PRACTITIONERS www.ipsosconsulting.com IPSOS BUSINESS CONSULTING IN VIETNAM
    • YOUR IPSOS CONTACT IN VIETNAM Our Solutions Our Story Having opened our first office in 1994 in Hong Kong, and completed our first project in Vietnam in 1995, Ipsos Business Consulting is immensely proud of its unique Asian heritage. IPSOSB • Go-to-Market Strategy • Business Unit Strategy • Competitive Insights • Partner Search • Sales + Marketing • Innovation Our Solutions p q g Over the years we have expanded across the Asia Pacific into Europe and the USA, and recently opened our first office in Africa. We have grown from being an Asia Pacific market BUSINESSCO Tam Tran Thanh Consulting Manager intelligence company to become an integral part of the Ipsos global network, with a presence in 85 countries around the globe. Ipsos Business Consulting helps clients b ild d b ONSULTING Consulting Manager Vietnam & Cambodia Ho Chi Minh Office eMail: tam.tranthanh@ipsos.com to build, compete and grow by providing practical advice based firmly in the realities of the market place. With over 19 years experience of the Vietnam market we offer clients the best geographical co erage and solid 82 Our Contact Details Ipsos Vietnam Level 9A, Nam A Bank Tower, www ipsosconsulting com Ipsos Global geographical coverage and solid experience across the region. 201‐203 CMT8 Street, Ward 4, District 3, HCMC eMail: vietnam.bc@ipsos.com Tel: +84 (8) 3832 982 Fax: +84 (8) 3832 9830 www.ipsosconsulting.com www.ipsos‐asean.com Ipsos ASEAN Ipsos Myanmar vietnam.bc@ipsos.com www.ipsos‐myanmar.com