GROCERY REPORT  Vietnam   2012                                                              1                  Vietnam Gro...
CONTENT           Market     Channels                            Shoppers           MACRO-                     THE RETAIL ...
MacroeconomicMARKET                      Outlook                                            FMCG Overview  Will Vietnam’s ...
A very tough 2012 when all the macro indexes are not asexpected. Signs of decreasing inflation since Quarter 2…           ...
… which is still fragile under pressure from the recent upwardtrend in fuel and utilities.               ▲14%             ...
Service continues to drive the growth of the economy, particularlybeing led by the trade sector.       LABOR STRUCTURE    ...
The growth is still there but not for the masses.    RETAIL-SERVICES SALES                                    NO. COMPANIE...
The Vietnam retail market drops out of top 30 countries forattractiveness by A.T Kearney. Inflation, high real estate pric...
However, retail sector is still attractive to foreign investors despitetotal FDI decreases..                              ...
Macro-economics          Macro-economicMARKET    Outlook          Overview                          FMCG Overview         ...
FMCG volume growth trend resumes in light of cooling CPI andstable consumer confidence index.   Consumer Confidence remain...
Vietnam remains the fastest growing FMCG market.                                   FMCG MARKET DYNAMICS                   ...
Across most categories, particularly beverages.                     VALUE & VOLUME % CHANGE YA                            ...
Most categories posted volume growth of 5-10% with theexception of beverages, baby diapers and RTDM.                      ...
The largest categories are Beer, Cigarette, Milk and Beveragewhich are dominated by a few big players.                    ...
Manufacturers more reluctant to introduce new brands – and mostnew brand launches are in the value pricing segment. Number...
Interestingly, the premium segment is either stable or increasingits share across categories.         PREMIUM SEGMENT CONT...
Lower price gap between premium and mainstream contributes tothe growth of premium.        Consumers tend to trade up with...
CHANNELS                       The Now     The Future  How fast is modern trade growing?  How is traditional trade trying ...
Traditional trade dominates in SEA but modern retailing isexpanding its footprint. Vietnam still ripe for modern trade out...
Modern trade still sees growth in Vietnam, especially in Hanoi, asVietnam’s retail market continues to transform.         ...
The government invests in improving wet markets and to supportsmall traders.    Market system development scheme 2011-    ...
However, supermarkets are increasingly preferred by consumers.          Average Frequency           of Visits per Month   ...
Retailers of all types are implementing their expansion plans.                                                     81     ...
Supermarkets implement a wide variety of programs to buildloyalty and attract consumers.                                  ...
CHANNELS     The Now           The Future           What lessons will Vietnamese           retailers learn from other     ...
Retailers continue to expand their store base across AP with totalnumber of stores increasing by over 25,000. Moreover,con...
Convenience in Thailand: Innovation through the non-FMCGrange has also attracted shoppers.   Available in 2011   Additiona...
Minimarts in Indonesia: Thematic promotions and loyalty cardshave helped the Mini-Marts succeed apart from the huge storeb...
The change is coming to Vietnam too, as evidenced by some  shopper segments…                                    Rewind to ...
…and backed up by the continuous retailer expansion.            12/7/2012 1st HI-WAY supercenter         08/12/2011 1st MI...
SHOPPERS   Belt Buckling   Connected   Consumers                                                                          ...
Concerns                            Discretionary spending                                                              *:...
Consumers are tightening their belts. Therecessionary mindset shifts consumer thinking fromNice to Have to          Need t...
Hardship continues, consumers reduce shopping frequency andare much impacted by price.  TOP 4 IMPACTS ON GROCERY          ...
Consumers are adjusting shopping behavior to better adapt withtougher times (i.e. consuming larger pack sizes, downgrading...
In response, retailers & manufacturers offer diversified promotions.                                        Gas reward pro...
«   staying at home more often         »Shopping patterns can emerge with consumernesting    -   Out Of Home entertainment...
Nesting consumers are heading back to their house. VALUE & VOLUME % CHANGE YA                  Value   % CHANNEL GROWTH VS...
Walmart partners with manufacturers on “family meals for less.”                                                           ...
ShopRite cooking on YouTube; monthly recipes featuring storebrands.                                                       ...
In the current climate, consumers and shoppers arere-appraising their store, brand andformat choices with new lenses.     ...
Consumers also seek value through up-trading to more premium                                                              ...
Innovation themes…        Taste changing              Perfume Fabric                                                 Ecoba...
SHOPPERS   Belt Buckling   Connected   Consumers                                                                          ...
What’s Next: Consumers are               more and more                                      Connected**End of 2012:   Ever...
92% of Vietnamese consumers are more likely totrust recommendations from people they know*                  Conduct produc...
To stay in the game, manufacturers keep an eye on internetadvertisements.          Marketing return on investment*Advertis...
Building demand by connecting consumers (with each other andwith their brands).      Collective Buying Power      Sharing ...
Change and adapt… Now!     Shopper                  OpportunitiesNeed to Have                          Private            ...
Thank you     vn.nielsen.com     www.twitter.com/nielsenvietnam     www.facebook.com/vietnamnielsen                       ...
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Nielsen grocery report 2012

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Nielsen grocery report 2012

  1. 1. GROCERY REPORT Vietnam 2012 1 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  2. 2. CONTENT Market Channels Shoppers MACRO- THE RETAIL BELT BUCKLING ECONOMIC LANDSCAPE | OUTLOOK NOW CONNECTED | & INTO CONSUMERS FMCG THE FUTURE OVERVIEW 2 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  3. 3. MacroeconomicMARKET Outlook FMCG Overview Will Vietnam’s GDP and CPI reach their 2012 targets? Is the Vietnam retail industry still attractive? 3 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  4. 4. A very tough 2012 when all the macro indexes are not asexpected. Signs of decreasing inflation since Quarter 2… GDP YOY GOVERNMENT PLAN 2012 8 7 GDP 6- CPI ≤ 6 6.5% 10% 5 4 ACTUAL half 2012 3 GDP CPI 2 4.38% 12.2% 1 0 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 22.2 23.0 22.4 21.6 19.8 17.5 19.8 20.8 18.1 17.3 16.4 14.212.2 13.3 13.9 10.5 8.3 6.9 5.4 5.0Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- 11 11 11 11 11 11 11 11 11 11 11 11 12 12 12 12 12 12 12 12 CPI YOY 4 Vietnam Grocery Report 2012 Source: Vietnam General Statistics Office Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  5. 5. … which is still fragile under pressure from the recent upwardtrend in fuel and utilities. ▲14% ▲50% Mogas 92 23,800 23,650 VND/litre 20,800 20,600 488,000 ▲5% 418,000 394,000 315,000 ▲ 6% Gas VND/12kg tank ▲ Growth rate 01/09/12 vs 01/01/12 5 Vietnam Grocery Report 2012 Source: xangdau.net & http://www.petrolimex.com.vn/ Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  6. 6. Service continues to drive the growth of the economy, particularlybeing led by the trade sector. LABOR STRUCTURE GDP STRUCTURE 51.6 mil employees 1,252,577 bil.VND 1st half 2012 21% 38% 31% 30% 21% 37% 40% 40% 49% 23% 1st half 2011 22% 48% 3.81% 2.81% 5.57% 6 Value growth rate vs. YA Vietnam Grocery Report 2012 Source: Vietnam General Statistics Office Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  7. 7. The growth is still there but not for the masses. RETAIL-SERVICES SALES NO. COMPANIES DISSOLVED OR CEASED Jan/2012-Aug/2012 Jan/2012-Apr/12 • Total value: 1,517,721 bil.VND • Total volume: 17.735/ 647.627 companies • Change vs LY: +17.9% • Change vs LY +9.5% Retail 6,414 5,297 Construction Manufacturing & Processing 3,123 Others 2,901 250,000 25 200,000 20 150,000 15 100,000 10 50,000 5 0 0 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 7 Retail-Services Sales Growth Rate YOY Vietnam Grocery Report 2012 Source: Vietnam General Statistics Office Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  8. 8. The Vietnam retail market drops out of top 30 countries forattractiveness by A.T Kearney. Inflation, high real estate price andbusiness procedures are still big concerns. VIETNAM Rank 1 2008 6 2009 14 2010 23 2011 Policy & Human Quality of Low purchasing Procedure Resources Source: A.T. Kearny 2012 GRDI supply chain power 8 Vietnam Grocery Report 2012 Source: A.T. Kearney Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  9. 9. However, retail sector is still attractive to foreign investors despitetotal FDI decreases.. Value growth rate vs. LY NEW FOREIGN DIRECT INVESTMENT First 8 months 2012 vs 2011 -11% Total FDI01/01/12-20/08/12 7% 5% Manufacturing& Processing +25% 47%01/01/11-20/08/11 Real estate +467% 48% 68% Wholesale, Retail sale & Repairment +107% 20% Other areas -86% 2% 3% 9 Vietnam Grocery Report 2012 Source: Foreign Investment Agency - Copyright © 2012 The Nielsen Company. Confidential and proprietary. Ministry of planning and investment
  10. 10. Macro-economics Macro-economicMARKET Outlook Overview FMCG Overview After skyrocketing inflation in 2011, how is the Vietnam FMCG market doing? 10 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  11. 11. FMCG volume growth trend resumes in light of cooling CPI andstable consumer confidence index. Consumer Confidence remains below 100, but FMCG volume sales growth bounces back – stable in the 90+ range strongest for Beverage & Milk-base cat. Unit Value Growth Volume growth CONSUMER CONFIDENCE Nominal Growth INDEX Cooling CCI rests stable at low level 30% 119 25% 101 10398 97 96 99 94 95 88 20% 15% 10% 5% 0% 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2009 2010 2011 2012 11 Vietnam Grocery Report 2012 Source: Vietnam GSO and Nielsen Consumer Copyright © 2012 The Nielsen Company. Confidential and proprietary. Confidence Survey
  12. 12. Vietnam remains the fastest growing FMCG market. FMCG MARKET DYNAMICS REGIONAL SUMMARY Q2, 2012 30% 25.2% 25% Unit value change Volume change Nominal growth 20% 16.1% 15.5% 14.9% 15.4% 15% 8.9% 9.7% 7.6% 10% 8.1% 10.9% 6.1% 5.0% 4.3% 5.6% 5% 2.0% 2.6% 2.6% 3.9% 7.9% 9.9% 0.6% 0.7% 3.9% 6.4% 0.3% 0.5% 4.0% 0.5% 3.7% 1.9% 3.8% 3.2% 0.7% 0.6% 2.1% 1.1% 2.2% 0% 1.4% -3.1% -5% 12 Vietnam Grocery Report 2012 Source: Nielsen Retail Audit Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  13. 13. Across most categories, particularly beverages. VALUE & VOLUME % CHANGE YA MAT JUL’12 23% Value FMCG (Inc. Beer) 11% Volume 28 % Beverage (Inc. Beer) 18% 15 % Personal Care 4% 21% 18% Milk Based Product Cigarette 6% 7% 19% 15% Food (excl Milk Base) Household Care -1 % 3% 13 Vietnam Grocery Report 2012 Source: Nielsen Retail Audit Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  14. 14. Most categories posted volume growth of 5-10% with theexception of beverages, baby diapers and RTDM. (YTD Jun’12 vs. YA)  Half the categories have medium volume growth of 5-10%; while 15% show higher growth of >10%  Price hike around 10% for most categories except for dishwashing liquid, gum, snack, milk powder, shampoo and biscuit whose price hike >15% . 14 Vietnam Grocery Report 2012 Source: Nielsen Retail Audit Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  15. 15. The largest categories are Beer, Cigarette, Milk and Beveragewhich are dominated by a few big players. TOP 10 MANUFACTURERS IN FMCG 6 Cities TT - Value % Share | Period Ending SEP12 | Share of Sum(PROD) 6 Cities TT - V Top 10 Val for MAT TY | Total Mkt TOP 10 MANUFACTURERS IN FMCG – TOP 10 CATEGORIES IN FMCG – 6 CITIES TT – VALUE % SHARE 6 CITIES TT – VALUE % SHARE 15 Vietnam Grocery Report 2012 Source: Nielsen Retail Audit Copyright © 2012 The Nielsen Company. Confidential and proprietary. Source: ACNielsen | Retail Index (<< Viet Nam >> ), data to SEP12 Source: ACNielsen | Retail Index (<< Viet Nam >> ), data to SEP12
  16. 16. Manufacturers more reluctant to introduce new brands – and mostnew brand launches are in the value pricing segment. Number of new brands declines starting from early 2011 Increasing number of new launches in Value segment NUMBER OF NEW LAUNCHES NEW BRANDS - % BY25 PRICING SEGMENT 6 CITIES20 3415 50 58 2110 14 18 11 5 12 11 31 19 21 0 Nov-10 Dec-10 Nov-11 Dec-11 Feb-10 Feb-11 Mar-11 Feb-12 Mar-10 Mar-12 Jun-12 Jan-10 Jun-10 Jul-10 Jan-11 Jun-11 Jul-11 Jan-12 May-10 Aug-10 Sep-10 May-11 Aug-11 Sep-11 May-12 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 2010 2011 2012 Premium HiMid 2010 2011 2012 LowMid Value 16 Vietnam Grocery Report 2012 Source: Nielsen Retail Audit Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  17. 17. Interestingly, the premium segment is either stable or increasingits share across categories. PREMIUM SEGMENT CONTRIBUTION CHANGE - YTD JUL 12 VS. YA 50 45 40 35 30 25 20 15 10 5 0 Baby Cereal Insect_Coil HH Cleansers Shampoo Gums Baby Diaper Fem_Care Bouillon-Msg Personal Wash Biscuits & Pie Condensed Milk Body Lotion Milk Powder Deodorants RTD Milk Dishwash Liquid Mouth Wash RTD Tea Facial Care Packaged Water Fruit Juice Toothbrush Cooking Oil Cigarette Fabric Softener Tissue Toothpaste Laundry Detergent Soft Drink Insect_Aerosol Beer Sauce Energy Drink Facial Tissue Instant Noodle Snack Hair Conditioner YTDLY YTDTY Price segmentation based on price index at 6 Cities, YTDJul’11 17 [>120 Premium] [100-120 HiMid] [80-100 LowMid] [<80 Low] Vietnam Grocery Report 2012 Source: Nielsen Retail Audit Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  18. 18. Lower price gap between premium and mainstream contributes tothe growth of premium. Consumers tend to trade up with reduction in price gap of “Premium” and “Mainstream” products. Price Gap Change Premium Volume Change Driven by Premium vs. Mainstream Price Gap Reduction -4.0% Biscuits 2.6% -3.0% CSD 3.4% -3.0% Shampoo 6.5% 18 Vietnam Grocery Report 2012 Source: Pricing Analytics Study, Vietnam 2011 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  19. 19. CHANNELS The Now The Future How fast is modern trade growing? How is traditional trade trying to compete with modern trade? What are modern trade retailers doing to attract and retain consumers? 19 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  20. 20. Traditional trade dominates in SEA but modern retailing isexpanding its footprint. Vietnam still ripe for modern trade outlets. Retail Store Density Analysis (Number of stores per million population)1,000 14,000 900 849 12,000 800 Grocery stores 700 Modern trade 10,000 600 514 8,000 500 6,000 400 295 304 300 4,000 209 200 162 136 2,000 100 38 65 9 6 - - China Thailand Vietnam Singapore India Philippines Indonesia Taiwan HK Korea Malaysia 85 94 96 89 57 63 49 22 44 46 6 20 Modern Trade Contribution 2011 Vietnam Grocery Report 2012 Source: Nielsen Retail Census Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  21. 21. Modern trade still sees growth in Vietnam, especially in Hanoi, asVietnam’s retail market continues to transform. TRADITIONAL TRADE 78% 22% MODERN TRADE Value sales Contribution70,000 500 2011 Total 36 Cities 45060,00050,000 400 350 943 Modern trade40,000 300 outlets (+25% 2009 250 vs 2010) 201030,000 2011 20020,000 150 10010,000 50 0 0 30 Cities 4 Cities Hanoi HCM 30 Cities 4 Cities Hanoi HCM Store numbers - Nielsen Census Notes: Modern Trade contribution ( inc. Saigon Co.op, exclude Metro) Based on 36 largest urban areas in Vietnam : 4 Cities includes Haiphong, Danang, 21 Cantho and Nhatrang Vietnam Grocery Report 2012 Source: Nielsen Retail Census Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  22. 22. The government invests in improving wet markets and to supportsmall traders. Market system development scheme 2011- 2015: Investment of 2,782 bil.VND with 150.6 ha on developing 319 traditional market – tier I • Preserving 56 markets • Upgrading 110 markets • Building 153 markets Ministry of Industry and Trade cooperate with University of Economics to organize: “Sales skill training for small traders in wet markets”. “Wet market management skill training for the markets’ management boards” 23 Vietnam Grocery Report 2012 Source: Ministry of Industry and Trade Copyright © 2012 The Nielsen Company. Confidential and proprietary. Decision 012/2007/QĐ-BCT
  23. 23. However, supermarkets are increasingly preferred by consumers. Average Frequency of Visits per Month ▲ ▼ Consumers are moving from Wet Markets to Supermarkets Base: All Respondents (2010 n=1500, 2011 n=1500) 24 Ref: Q8 Vietnam Grocery Report 2012 Source: Nielsen Shopper Trends 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  24. 24. Retailers of all types are implementing their expansion plans. 81 15 1/1-31/9/2012: 4 Health & 32 Beauty 12+ Convenience Store 23 Store new stores open 8 each month 27 59 13 85 20 5 19 1 44 17 1 Minimart 46 6 Supermarket Supermarket 14 B&B 2 11 8 14 3 25 11 5 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  25. 25. Supermarkets implement a wide variety of programs to buildloyalty and attract consumers. New look by Increased Preference from Difference with refreshing logo promotion loyalty card private label and department frequencies branding Membership Focus on fresh & Card, VIP processed foods, Card… household With special products, and offers: Stored garments. up points, Heavily special promoted promotion through price prices and displays On-going promotions, Coming with themed to match fresh, holidays and professional specific and friendly categories or image special customers 26 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  26. 26. CHANNELS The Now The Future What lessons will Vietnamese retailers learn from other Asian countries? What will be the channel mix in the coming years? 27 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  27. 27. Retailers continue to expand their store base across AP with totalnumber of stores increasing by over 25,000. Moreover,convenience stores are seeing the fastest growth rate. Modern Trade Store No. by Format in Asia-Pacific (% annual growth) 28 Vietnam Grocery Report 2012 Source: Nielsen Retail and Shopper Trend Copyright © 2012 The Nielsen Company. Confidential and proprietary. Asia Pacific 2012
  28. 28. Convenience in Thailand: Innovation through the non-FMCGrange has also attracted shoppers. Available in 2011 Additional Product & Service in Convenience Stores Fresh Coffee Auto & Travel CVS products Home Appliances Payment Fresh Meat & Service Vegetables Bakery Smoothies Direct Marketing Media Books & MagazinesHot Served Snacks Restaurant RTE Meal IT & Stationary Seasonal Products 29 Vietnam Grocery Report 2012 Source: Nielsen Shopper Trends 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  29. 29. Minimarts in Indonesia: Thematic promotions and loyalty cardshave helped the Mini-Marts succeed apart from the huge storebase (+10,000 stores). New Year Thematic promotionsValentine’s Day Mother’s Day Valentine’s School HolidayUnilever Fair Fonterra Fair Homecare Fair Supplier Fairs Olay Promotion Unilever Fair Bi weekly Shopping Calendar Weekend Promotion Weekly Promotions 30 Vietnam Grocery Report 2012 Source: Nielsen Shopper Trends 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  30. 30. The change is coming to Vietnam too, as evidenced by some shopper segments… Rewind to 2005 Present Fast Forward to 2022 Innovation Seeker and Prudent Shopper Conservative & Value Oriented Shopper Wet Markets Super Wet SuperShopping Destination – Most Often All shoppers bought Markets Markets Markets daily food in Wet Wet market is Markets Wet Super thought to be swept out for its dirty and Markets Markets untidy image. Wholesalers Supermarket Convenience increase its network, Wholesalers Stores thus increases in the frequency Grocery Stores Grocery Wholesalers Convenience Stores Stores / Super Markets Grocery Convenience Mini Markets Very few & expensive – Stores Stores visit once per year for curiosity Metro Metro Metro 31 Vietnam Grocery Report 2012 Source: Nielsen Shopper Focus Groups in Copyright © 2012 The Nielsen Company. Confidential and proprietary. HCM,HN 2012
  31. 31. …and backed up by the continuous retailer expansion. 12/7/2012 1st HI-WAY supercenter 08/12/2011 1st MINISTOP CVS 31/5/2012 1st FLC Mart 07/2012 1st C EXPRESS CVS ANNOUNCED EXPANSION PLANS STORE CVS- STORE SUPERMARKETS BY (YEAR) BY (YEAR) NUMBER MINIMARTS NUMBER Co.op Mart +8 2012 Co.opFood + 30 2012 √100 2015 √ 150 2015 Big C √ 24 2012 Satrafoods + 20 2013 √ 29 2013 TTGD Foods + 2-3 annually Lotte Mart +2 2012 Circle K > 40 2012 Fivimart +3 2012 Shop & Go √ 100 2012 Hiway √3 2013 √ 20 2016 Family Mart + 27 2012 √ 43 Notes: (+) new stores. Ministop + 30 2012 (√) in total 32 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  32. 32. SHOPPERS Belt Buckling Connected Consumers 33 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  33. 33. Concerns Discretionary spending *: ↑↓ vs. YA | vs. APAC average 66% Saving 32% Holiday THE ECONOMY ↑ | vs. 60%* (19%) ↓ | vs. 37%*JOB SECURITY (18%) 29% New technol- INCREASING ogies UTILITY BILL = | vs. 30%* (12%) 28% HEALTH New (8%) clothes INCREASING 27% Home 28% Out of ↓| vs. 35%* FOOD PRICE impro- home veme entertai (7%) nt ↑ | vs. 18%* nment ↓ | vs. 34%* How to utilize spare cash after covering essential living 34 expenses? Vietnam Grocery Report 2012 Source: Nielsen Global Consumer Copyright © 2012 The Nielsen Company. Confidential and proprietary. Confidence Index Q2’2012 – Vietnam
  34. 34. Consumers are tightening their belts. Therecessionary mindset shifts consumer thinking fromNice to Have to Need to Have superfluous temptation Support on compulsory expenditures: gasoline, gas/electricity, water, insurance, rent… Core selling grocery products sales rise 35 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  35. 35. Hardship continues, consumers reduce shopping frequency andare much impacted by price. TOP 4 IMPACTS ON GROCERY SHOPPING FREQUENCY PURCHASE CHOICE 39% Weekly W ek l e y 64% 59% Every 2 weeks Ev e r we e k s 2 y 36% 1% Every month Ev e ro n t m y h 0% Less often 1% Les f n ote 0% 2011 2012 Base: All Supermarket shoppers (n = 1500) Compared with a year ago, how much impact has each of the following had on your choice of Grocery Purchases in the last 12 months? 36 Vietnam Grocery Report 2012 Source: Nielsen Shopper Trends Study 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  36. 36. Consumers are adjusting shopping behavior to better adapt withtougher times (i.e. consuming larger pack sizes, downgrading aswell). CONSUMER REACTION TO CHANGES IN CONSUMER BEHAVIOR ACROSS PRICE INCREASE CATEGORIES IN INFLATIONARY PERIOD% Buy more on Change in Volume Change in Pack Change in Brand ‘Promotion’ 66 of consumption size purchased purchased More amount Big pack Cheaper brand Buy more Vietnamese Same amount Same pack Same brand brands 41 Less amount Small pack Expensive brand Buy bigger pack sizes 37 Buy cheaper brands 37 Change shopping channels to save money 36 Buy more of smaller pack sizes 22Buy more of Private Label 20 brands Hair Con Hair Con Hair Con Bouillon Bouillon Bouillon Fab Soft Fab Soft Fab Soft Laundry Laundry Laundry Shampoo Shampoo Shampoo How do you change your shopping habits to adapt to the price increases? 37 Vietnam Grocery Report 2012 Source: Consumer Omnibus Vietnam, Sept 2011Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  37. 37. In response, retailers & manufacturers offer diversified promotions. Gas reward programs Will you be the 1st to step into this game? 38 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  38. 38. « staying at home more often »Shopping patterns can emerge with consumernesting - Out Of Home entertainment & restaurants + Home cooking + Friendliness ! + TV-viewing rising Cocooning 39 In both products and Entertainment! Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  39. 39. Nesting consumers are heading back to their house. VALUE & VOLUME % CHANGE YA Value % CHANNEL GROWTH VS. YA MAT JUL’12 Volume Off vs. On 2011: 713,416 vs. 522,394 stores 285% Meal Maker 318% 2.6% vs. 2.1% Beer can 47 % 40 % 1.6% vs. 1.5% 40 Vietnam Grocery Report 2012 Source: Nielsen Retail Audit Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  40. 40. Walmart partners with manufacturers on “family meals for less.” 41 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  41. 41. ShopRite cooking on YouTube; monthly recipes featuring storebrands. 42 Vietnam Grocery Report 2012 Source: YouTube.com/user/ShopRiteStores Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  42. 42. In the current climate, consumers and shoppers arere-appraising their store, brand andformat choices with new lenses. Rising interest in Value-seeking Consumer Value ≠ Price Consumer Value = Benefits/Price • price positioning • simple and innovative Promotions • new value added initiatives 43 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  43. 43. Consumers also seek value through up-trading to more premium Q ic R t ie a u k er v ls Q ic R t ie a u k er v ls Q ic R t ie a u k er v ls Q ic R t ie a u k er v ls products and/or buying big packs or pouches to save money. 6C ie E h- V lu e% h r | P r dE d gF B 2| SVeo T% C te oy r dE d6CEs2n hV luT ta C te oyeio E d6CEs2n hV luT ta C te oyeio E d gF B 2| S aeo T ta C te oy it s n o m S ae eio n 6C ie 1n - a luf e ta h rg P io n in Fie1 | h- ro f e% h r | P r d n in Fie1 | h- ro f e% h r | P r d n in E 1 in itE E h h o mo l a e| r e s r Sa g it B E S aeo o l S ag r m a e g it B E S aeo o l S ag r m a e hr f o l a gr VOLUME SHARE OF PRICE TIER RANGES VOLUME SHARE OF PACK-SIZE RANGES – GT URBAN Sources: RA, Price Tier market: 6 Cities TT Enh, Shampoo Fabclean DWL HCL o r e C ie e Pack size market: 36 Cities Enh TT + Rural o r , A ie E > e C n a E1 a E1 E1 Small Pack <400mlS uc : A N ls n| R ta In e ( <V t N m uc d tatoFe 1R ta In e ( <V t N mo r,e A toF e 2 e il In e ( <V t N mo r,e A toF e 2 e il In e ( <V t N m >) d tatoF B 2 e il d x < ie aS >) : a N ls B|2 e il d x < ie a S>) d ta N ls n| R ta d x < ie a S>) d ta N ls n| R ta d x < ie a > , a >uc : C ie B >uc : C ie B <3kg =<1000L =<500ml Data ended Mar’12 Big Pack >= 400ml >=3kg >1L >500ml S uc : A N ls n| R ta In e ( <V t N mo r , dA NM R 2e il In e ( <V t N mr>) A tatoM| R ta In e ( <V t N mo r , dA NF e1 R ta In e ( <V t N m >) d tato o r e C ie e e il d x < ie a S>)eaC ie A 1R ta d x < ie a uc :, d N ls nRe il d x < ie a S>)eaC ieEn| e il d x < ie a > , a > c : tato ls n| u e S >e C ie eA 1 o a 2 > c : tato lsB 2 u 44 S uc : A N ls n|R t il I d x( <V t Nm >) d tat J N2 o r e C ie e ea n e < ie a > , a o A 1S uc : A N ls n| R ta In e ( <V t N m >) d tatoF B 2 o r e C ie e e il d x < ie a > , a E1 Vietnam Grocery Report 2012 Source: Consumer Omnibus Vietnam, Sept 2011Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  44. 44. Innovation themes… Taste changing Perfume Fabric Ecobags Cigarette Softerner No fried Laundry Organic Milk Instant Liquid products Beverage Noodle 45 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  45. 45. SHOPPERS Belt Buckling Connected Consumers 46 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  46. 46. What’s Next: Consumers are more and more Connected**End of 2012: Every 5 Vietnamese consumers, there will be 1 smartphoneand Tablet users will increase from 2% to 5% 2015: Mobile phones will overtake PCs as the most common web access Speed of action Offers flexibility 47 Image/Buzz Report 2012 Vietnam Grocery Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  47. 47. 92% of Vietnamese consumers are more likely totrust recommendations from people they know* Conduct product research online 72 Look up product information online 70 Read a grocery retailers circular/flyer online 59 Compare prices for a grocery product online 59 Browse a manufacturers website for a grocery 53 category Look for deals online Look for coupons from an online coupon site 49 48 63% are Purchase a product online 47 more likely to trustProvide feedback about a grocery category through social media (wrote a review, blogged) 27 consumer opinions Use a digital shopping list 12 posted online** Other 11 None of the above 6 Thinking about Household Grocery Shopping, which of the following activities have you done in the last month on any online connected device?* 48 Sources: * Global Trust in advertising Q3 2011 Vietnam Grocery Report 2012 **Nielsen Global Digital Shopping –Q1 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  48. 48. To stay in the game, manufacturers keep an eye on internetadvertisements. Marketing return on investment*Advertisers’ spending - % Chg YTD – Global Average** 49 Sources: *Nielsen Advanced Analytics Consulting - 2009 Vietnam Grocery Report 2012 **Nielsen Global Ad View Pulse Lite Q1 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  49. 49. Building demand by connecting consumers (with each other andwith their brands). Collective Buying Power Sharing Experiences Reviews Ratings Recommendations Referrals Forums, Social Q&A Sharing Ideas 50
  50. 50. Change and adapt… Now! Shopper OpportunitiesNeed to Have Private Home Proximity Label Cooking Cocooning Speed of Flexibility of actions Value-seeking offer M-commerce Innovation Buzz Home Connected Entertainment products Price E-Promo 51 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.
  51. 51. Thank you vn.nielsen.com www.twitter.com/nielsenvietnam www.facebook.com/vietnamnielsen 52 Vietnam Grocery Report 2012 Copyright © 2012 The Nielsen Company. Confidential and proprietary.

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