Understanding Vietnam's Changing Consumer Landscape

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Vietnam Pocket Reference Guide 2012 Nielsen

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Nielsen Vietnam Tracked Categories

TABLE OF CONTENTS

01

08

14

19

29

37

41

54

55

60

67

72

81


Thank you all for your support of Nielsen Vietnam.
As you have surely recognized, the Vietnam
business landscape is changing more quickly than
ever. Over the past few years, we have gone from
an environment of very strong growth driven by a
growing middle class and substantial inflows of FDI,
to one of moderated and uneven growth, a more
cautious and discerning consumer, and more
competition regardless of the industry. In addition,
we are now also facing much macro economic
uncertainty around inflation expectations, the financial system, and
investment from overseas, which makes decision making even more difficult.

As a way to help navigate this uncertainty and to gain a better understanding
th
ofthe markets in which you operate, we are pleased to offer the 7 edition of
the Nielsen Vietnam Pocket Reference Book. This year the Pocketbook will be
read by more business people and academics than ever as they attempt to
better understand the Vietnam business climate and consumer behavior,
which is changing very quickly as consumers adapt their purchase decisions
in a much more uncertain environment.

This pocketbook is a compilation of Nielsen findings over the past year, and
our hope is that it helps you identify trends in Vietnam and also serves as a
first-stop reference when you have questions about the market and your
specific area of interest. To create a comprehensive view, we have included
our own proprietary research as well as figures from the Vietnam Govern-
ment Statistics Office. I trust you will find the Nielsen Pocket Reference Book
useful for your business.

Sincerely,

Darin Williams

Managing Director

know when
you’re good
to go.
We know that refreshing your
product portfolio is vital to
attracting new and existing
customers. Whether it’s a
new idea or a new twist on a
current favorite, our Product
Innovation and Renovation
practice can help you prepare
for a perfect launch.

NIELSEN INSIGHTS – AT A GLANCE 01


02 NIELSEN INSIGHTS – AT A GLANCE

2007 – 2011 Consumer Confidence Index: Vietnam

Global Country Consumer Confidence Rankings
Global confidence upped 1 point to 89 for Q4 2011 to wrap up 2011

Q4’11 vs.Q3’11
Decrease
160

140
Increase
122
117 117
120 113 112
108 105 104 103 101 99 99 98 96 95
100 95 94 92 92 90

80

60

40

20

0

Base : All respondents n=31228


Perceptions of local job prospects over the NEXT 12 Months

2
5 4 1 6 1
12 12 10 8 6 5 4 4 11
20 14 12

38 33
37 41
53 47 52 45
54 54
60 60 54
58 64

49
45 50
38 50 30
32 30 37 39
26 24
19 25
18
7 9 11
2 1 1 4 2 3 1 5 5

IN ID PH CN MY TH VN AU HK SG NZ TW KO JP AP

Base : All respondents n=10179 Bad Not so good Good Excellent

Perceptions of local job prospects in Vietnam | 2011

6 3 5
5

54 54 53
52

34 35 38 37

3 1 1 1
VN Q1'11 VN Q2'11 VN Q3'11 VN Q4'11




Perceptions of state of personal finances over the NEXT 12 Months
4
4 6 4 5 2
10 6 8 3 9
17 18 13 1
20
11
29

47 45
55 53 48
55 53 49
59 48

58 51
65
63
52

39 43
34 36 41 30
31 32 36
25
20 27
13 15
12 8
2 4 4 4 5 3 2 6 4
1 1
ID PH IN CN MY TH AU HK VN NZ SG TW KO JP AP


Perceptions of state of personal finances in Vietnam | 2011

4 4 2 6

52 52 51 48

38 39 41 41

3 3 2 2
VN Q1'11 VN Q2'11 VN Q3'11 VN Q4'11

Base : All respondents　n=506 Bad Not so good Good Excellent


Perceptions of Good / Bad time for people to buy the things
they want and need over the NEXT 12 Months

4 3 3 2 2 2
3 2 6 3 3 1
12 9 4

28 25 2 20
33 33 31 31
38 30
19
47 46 40
39
43

59
56 45
46 53 63
56 55 50
50
39 46
38 44 50

16 20 16
9 12 13 12
6 4 6 7 7 8 8

IN AU HK PH ID NZ TH CN SG MY VN JP TW KO AP

Base : All respondents n=10179 Good Not so good Bad Excellent

Perceptions of Good / Bad time for people to buy the things
they want and need in Vietnam

2 2 1 2

24 21 27 25

62 64 61 63

10 10 10 8

VN Q1'11 VN Q2'11 VN Q3'11 VN Q4'11



Do you think your country is in an economic recession at the moment?

14 17 21
27 30 34
41 45 49 47
52 55 59
70 71

86 83 79
73 70 66
59 55 51 53
48 45 41
30 29

KO JP TW TH NZ VN PH ID IN HK MY CN AU SG AP

Base : All respondents n=7044 Yes No

Do you think your country will be out of an economic recession in the next 12 months?

25 24 30 25 24 28
31 29 32 35 33
36 39
43 42

25 27

35
35 45 43 47
37 44 52 58 61 66
32
42

50 49
34
29 26 26 25 25
24 22
16 16 13 13 10

TH IN VN PH CN MY ID HK SG NZ TW AU KO JP AP

Base: n=4131 Yes No Don't Know


Compared to this time last year, have you changed your spending
to save on household expenses?

15 15 15 16
23 24
29 30 30 31 32
39 42 42 46

85 85 85 84
77 76
71 70 70 69 68
61 58 58 54

MY PH TH VN ID IN JP KO NZ TW CN AU SG HK AP

Base : All respondents n=7044 Yes No


08 NIELSEN INSIGHTS - AT A GLANCE

Nielsen Business Barometer Survey – Wave 6

The Nielsen Business Barometer is an online survey designed to gauge Vietnam’s
business leaders’ sentiment. Topics include advertising spend, growth forecasts and
among other current hot topics. The online survey is conducted twice-yearly and
covers companies from various industries throughout Vietnam. The first wave is
conducted April/May and the second wave is conducted September/October.

Executive Insights

Keep a close eye on • Control costs of production
inflation & plan ahead • Choose low cost materials and supplies
for any price increase • Understand price elasticity of your categories to
to be passed on to minimize risks of price increases. Well-planned
consumers moves increase your chance of winning

• Drive growth through mergers and
Discover new acquisitions, entering new Categories and also
platforms of growth from exports to overseas market
• Rural market remains a promising territory to be
explored

• Understand and respond to consumers’ search for
value for money
Continue engaging
• Explore new communication platforms such as
with consumers
Online and Mobile advertising.
• Engage with shoppers at point-of-sale is important

NIELSEN INSIGHTS - AT A GLANCE 09

Inflation and VND devaluation are top concerns of business leaders

2011 1st half 2011 2nd half

1) Inflation (68%) 1) Inflation (59%)

2) VND devaluation (68%) 2) Competitive pressure/
activity/ growth (41%)
3) Ability to pass on
3) VND devaluation (41%)
price increase (50%)
4) Competitive pressure/ 4) Global Economic
activity/ growth (32%) Crisis (24%)

5) Low GDP growth (14%) 5) Wages growth (24%)

6) Ability to pass on
6) Logistical challenges (10%)
price increase (18%)

7) Labor force
7) Petrol Prices (9%)
skill shortage (18%)

8) Wage growth (9%) 8) Low GDP growth (18%)

Industry leaders expect consumers to reduce purchase of non-essentials and buy more on
promotion.


Not buy some 'non-
Purchase more on promotion 64 71
essentials'
Purchase more on
53
Not buy some 'non-essentials' 50 promotion
Trade down to cheaper
products 41
Trade down to cheaper products 41
Buy bigger packs to save
35
money
Buy bigger packs to save money 41
Change channel to save
29
money
Purchase more local/
32 Purchase more local/
Vietnamese brands 24
Vietnamese brands
Buy less / smaller packs of the
32 Buy less / smaller packs of
same products 18
the same products

Change channel to save money 27 Trade up to more
12
premium/indulgent products

Base: Respondents in Auto, FMCG, Telco, Travel, Pharma



Business performance compared to overall target

100%
6
14 Significantly better
23 28 18
80%
17
Somewhat better
23 17
60%
31 On par with target
58
40% 32
40 Somewhat worse
than target
20% 38
17 Significantly worse
12 18 than target
7
0% 2
2010 1st half 2010 2nd half 2011 1st half 2011 2nd half

Base: n= 58

Business Conditions in Vietnam (Now vs. Year Ago)

100% 2
5 8 6 Improved significantly
14

80% 30
19 Improved somewhat
40
54
60%
Remained the same

40%
57 Deteriorated
38 61 somewhat
30
20% Deteriorated
significantly
9 12
9
0% 2 2 3

Base: n= 58


More than half of business leaders claimed to face a double digit growth in input prices, with
one out of five showing 20% or greater increases.

Change in input prices
100% 3 30% and higher than
5
12
16 25 - less than 30%
80% 6
20 - less than 25%
12 12
15 - less than 20%
60%
24 10 - less than 15%
30
5 - less than 10%
40%
16 Less than 0% (negative)

24 3 1 - less than 5% (2.50)
5
20%
10 No change
3
6 9
0% 3 Don't know/ No answer
Base: Respondents in Auto, FMCG, Telco, Travel,Pharma

More companies are looking at alternatives to raising prices due the input cost inflation, e.g.
looking at using low cost material

Solutions for input price increases


Increase product price to
a reasonable amount 87 68

Improve productivity to
53 52
lower production costs

Accept lower profits 33 36

Choose lower cost
13 22
materials and supplies

Reduce production 10 2

Others 7 4

Base: Respondents in Auto, FMCG, Telco, Travel, Pharma



Out look is still optimistic for 2012 overall, but more companies think their situation will
deteriorate than in previous years.

Expectations on business conditions
100% 5 2
7
Improve significantly
30 29
80%
38
58
Improve somewhat
60%
36
48 Remain the same
40%
43
25 Deteriorate somewhat
20% 28
9 21
10 Deteriorate significantly
0% 4 2 5

Base: ALL RESPONDENTS

Around two-thirds of leaders expect a double-digit growth in next 12 months. Compared to
last wave, more companies expect single-digit growth

Expected company growth rate
100% 4 2 2
Don't know
24 26
30
80% 31 25%+

18 14 20% - less than 25%
60% 11 20
10 15% - less than 20%
23 24
40% 17
28 10% - less than 15%

12 16
20% 21 5% - less than 10%
12
14
7 3 16 Less than 5%
5 2 6
0%


While increasing consumption and expansion still remain source for growth, business leaders
now talk about M&A and Exports too

Expected 3 key factors of company growth

Increased consumer demand in Increased consumer demand in
your existing categories/ industry 76 79
your existing categories/ industry
Expansion to secondary cities/ Expansion to secondary cities/
rural areas 72 52
rural areas
Expansion to modern trade Expansion to new categories/
45 50
channel industries
Expansion to new categories/
43 Increase marketing expenses 36
industries

31 Mergers and acquisitions 23
Increase marketing expenses
Improved business conditions in Expansion to modern trade
14 channel 21
Vietnam overall
Improved business conditions in 12
Increase exports to
21
your industry overall overseas markets




Personal Finance Monitor
This syndicated study looks at consumer behavior towards personal finance, such as
current satisfaction with banks, attitudes towards credit card and lending internet
banking usage and more. The study is conducted monthly (n=600) in HCMC and Hanoi.
This study utilizes random sampling and face to face surveying. Results from this wave
were conducted in June 2011

Security and child’s future are the top priorities. Flexibility and immediate access helps to
push people towards home saving.

Monthly Average Saving
Amount – Mean score
Why do I save? Total 1,276,675 VND
HCM 1,373,180 VND
Benefits of home saving Hanoi 992,834 VND

Why do I choose to save at
banks?

Save for security
1st
31%

Save for child's More flexible
2nd 1st
education 25% access 23%
- Earn interest
Save for future Money always - Convenient for
3rd 2nd 1st doing business
8% available 14%

Sources: Nielsen Vietnam PFM


Banking Products – Awareness, Usage & Intention
Strong intention is not currently being converted into actual usage, with usage levels seemingly affected by the
recent confidence levels.

Currently
Aware using Future intention
Transactional account 100 32 32
ATM/ debit card 100 31 38
Deposit/ saving account 100 12 36
Bank loan services 100 2 7
Foreign exchange service 87 1 11
Domestic money transfer/payment 88 4 21
International money transfer 58 0 7
Credit card 42 1 13
Transaction account (without card) 33 1 9
Custody service 25 0 2
Other banking services 14 0 6

Base: All Respondents (7200).

Credit Cards - Current barriers
Over half the market does not fully understand what a credit card is and for those who do there are barriers
around their lack of knowledge about benefits

Lack of demand
36%

Inconvenience Lack of
/ Complicated knowledge
procedure 19%
18%

High fee is
applied 7%

Base: who aware of credit card but do
not currently use (n=1221)



How to attract new users? Non-bank users
Both operational and marketing changes need to be made to address the concerns of the non-banking market.

Marketing Issues
%
Operational Issues
60%

58%
47%
Simple and quick

No financial/ income
Interest rates

33%
evidence required
procedures

prestigious
Issued by
bank

Potential triggers (n=4136)
Base on non bank users

Key barriers to overcome

Lengthy procedures 64%

Valued pledged
assets required 52%

Key Barriers
(n=4136)
Financial/ income
Information required 51%

High interest rates 46%
(loan)

Not qualified for
using loan services 21%


Payroll accounts make over a third of the market, however, only a small fraction of these customers consider this
to be their main bank.

Does company open Which account do Is this your primary
bank account? you use? account?
Yes, and I have to use I use it as my
bank account opened by main bank
my company I choose the
bank in
which my 12%
35% 58
company
opened
account for 19%
6% me
59% 68%
I
choose I use it for
Yes, and I have choice to 42
use either my own bank
another receiving salary
account or account bank and some other I use it for receiving
transactions salary only
opened by my company

Base: Bank users (n=1501) Base: Those who had a Base: Users of bank accounts opened by
choice (n=85) companies (n=603)

Transactional Channels – New Channels

While awareness still remains a barrier to usage, amongst those who are aware of the channel usage has increased
rapidly in just the past quarter.

Q4 2010 Q1 2011
Total HCMC (A) Hanoi (B) Total HCMC (A) Hanoi (B)
n=672 n=243 n=429 n=672 n=243 n=429
Awareness
Mobile banking 31% 20% 50% 38% 22% 66%

Online banking 24% 16% 39% 30% 22% 43%

Total HCMC (A) Hanoi (B) Total HCMC (A) Hanoi (B)
Usage n=289 n=243 n=429 n=352 n=67 n=285

Mobile banking 2% 0% 4% 17% 23% 13%

Online banking 2% 1% 2% 8% 11% 6%

Base: Bank users Base: Bank users & aware of channel



Remote Channel Users – Improvements wanted

Improved security measures (or education around these) would greatly ease customer concerns and drive
intention into actual usage.

Mobile banking Online banking
(n=76) (n=61)
SAFETY (81%) SAFETY (86%)
• I feel secure and safe (51%) • I feel secure and safe (60%)
• Popular/ widely used (14%) • High level of security (20%)
• Stable system, no technical errors (13%) • Trust-worthy (9%)
• High level of security (6%) • Popular/ widely used (6%)
• No mistakes occur during transaction (6%) STAFF (26%)
• Supported/ recommended by others (5%) • Clear communication by staff (8%)
STAFF (17%) • Staff are agile and efficient (5%)
• Clear communication by staff (10%) CONVENIENCE (5%)

Base: Bank users

Rural Market – Is there any money?

75% of rural families claim to save every month. Although the actual amounts are around half of that in urban
areas 87% is still kept in the home.

How Many Households Save? How Much Per Month? Where Does it go?

North: Keep at home: 87%
Ha Noi
462,000 VND

Buy gold: 7%

Central: Savings Account: 6%
377,000 VND

Foreign currency: 2%

Monthly Average Saving
Amount – Mean score South:
Buy insurance: 2%
HCM 1,373,180 VND 571,000 VND

Hanoi 992,834 VND


Vietnam Grocery Report
Nielsen Vietnam introduces the annual update of the Grocery Report which gives an
overview and food for thought on the FMCG industry and covers consumer insights and
new trends on the horizon for Vietnam

Consumers are more open to change their shopping behavior in categories with higher prices

Do shopping behavior change due to price increase?

Carbonated Soft Drink 36 64
Dairy Food Beverages

Ready-To-Drink Tea 46 54
Energy Drink 43 57
Instant Coffee 55 45
Instant Noodle 60 40
Cooking Oil 50 50
Liquid Milk (UHT) 74 26
Product

Infant Formula 83 17 Unchanged
Adult Milk 43 57
Changed
Shampoo 68 32
Bar Soap
Personal

75 25
Care

Facial Cleanser 74 26
Toothpaste 78 22
Toothbrush 85 15
Laundry Product 55 45
Care
HH

Household Cleaner 60 40

Base: 300 (all respondent)



Consumers are likely to stay with their brand in several categories, either consuming less or
trading off the amount by buying bigger pack sizes
Beverages Food Dairy Personal Care HH Care
8 8 7 5 Substitute to other products
8 18 15 12
30 22 26 17
27 Consume less - less expensive
61
brands
40 50 29
% 72 59 84 29 Consume less - same brands
38 37 81
72 79 86
78
54
7 Consume less - more expensive
8 16 19 30 31 brands
39
11 28 17
14 10 Same amount - smaller pack size
12 6
Toothpaste
Shampoo

Toothbrush
Facial Cleanser
Ready-To-Drink Tea

Household Cleaner
Instant Coffee

Laundry Product
Bar Soap
Carbonated Soft Drink

Infant Formula (*)
Energy Drink

Instant Noodle

Same amount - larger pack size
Cooking Oil
Liquid Milk (UHT)

Adult Milk (*)

Same amount - more expensive
brands
Same amount - cheaper brands

Consume more

Small base-read with cautions for Infant Formula & Adult Mik

Private labels are gaining ground, especially for Food, Paper Products, Household and
Personal Care

Key Private Label Categories
PRICE % Bought P4W % Ever bought (excluding P4W) % Would Consider

Frozen and chilled foods 14
Price of private label is 15 – 30% 13
Any paper products
lower compared to brands
Staple foods 9
Private Label Awareness
Personal Care 9
Wow (Big C) 29
Household products 11
Coop Mart 21
Canned and package… 9
eBon (Big C) (food… 6
Carbonated Soft Drinks 4
Comi (Metro SPM, milk) 6
Snack & confectionery 4
Casino (Big C) 3
% Awareness Dairy Products 2


Modern Trade: increasing in number of stores and importance

Modern Trade (exclude Metro – Cash & Carry)

Store Numbers ACV Contribution
500 50%
National : 752 → 826 National : 11% → 13%

400 40%
2009
300 30%
2010
200 20%

100 10%

FMCG of Trade
0 0% Value % Shr Of Trade | Period Ending MAY11 | Share of PSC Shampoo

Hanoi HCMC 4 Cities 30 Cities Hanoi HCMC 4 Cities 30 Cities

Higher contribution to monthly grocery purchase categories like Food, Household and
Personal Care

Total Ho Chi Minh + Hanoi; Data ending Apr 2011; MT exclude Saigon
Coop

Source: ACNielsen | Retail Index (<< Viet Nam >> ), data to MAY11


Store number of Key players updated until March 2012

There is still scope to develop the Modern Trade in Vietnam when benchmarked
to other Asian countries

88%

70%
63% 66%
64%
HCMC

53%
46% 43%
Jakarta Greater

Hanoi
Vietnam
Kuala Lumpur

37%
Indonesia
Shanghai

Malaysia

Bangkok
Thailand

16%
13%
China

China Malaysia Thailand Indonesia Vietnam

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VIETNAM RETAIL OVERVIEW 25

VIETNAM SHOPPER TRENDS AND RETAIL HIGHLIGHTS

Wet markets still important for shoppers; supermarket increases its importance significantly
vs. last year.

Where do people shop?

Supermarkets Wet Markets
2011 2011

Used Past 7
Use Past 7 days 62 94
days

Use Past 4 Weeks
Used Past 4
90 96
weeks
Occasionally Use

97 Occasionally
99
Use

Base: All Respondents 2010 (n=1500), 2011 (n=1500)


26 VIETNAM RETAIL OVERVIEW

Consumers are moving from Wet Markets to Supermarkets

Average Frequency of Visit per Month

3.2
Supermarkets
2.3

24.2
Wet Markets
25.6

10.9
Traditional Grocery 2011
11.5 2010

Convenience Stores (not 1.8
associated with petrol/gas
stations) 2.3

Base: All Respondents (2010 n=1500, 2011 n=1500
)

Supermarket scontinue to attract consumer’s grocery budgets.

Where do people spend the majority of their grocery budget?

2009 2011

Supermarkets 43% 51%

Hypermarkets 5% 2%

Base: All Respondents (2009 n=1500, 2010 n=1500, 2011 n=1500
)


Promotions are the strong influencers for shoppers to change stores and brands.

Promotional Sensitivity

4% 6% Say promotions do not influence
9%
15% them on brand choice
21%
Only buy promotions if they already
27% like the brand
80% Regularly buy different brands
looking at because they are on promotion
56%
38% promotions
Very seldom changes stores, but
look actively for promotions
10% 14%
Changes stores based on best
2010 2011 promotions

Base: All Supermarket shoppers (n = )
1494

Shoppers are becoming more price conscious and they know how to save during their
shopping trip.

Price Awareness

63% are very price conscious (*):
17% knows all the prices of the grocery items I buy regularly
46% knows the prices of most items and always notice when the price changes

31% doesn’t know all the prices but generally notice when the prices change

6% doesn’t know or notice the prices of items bought regularly

*56% really price conscious in 2010
Base: All Supermarket shoppers (n = 1494)



As increasing food price puts pressure on shoppers to cut down their spending on
unnecessary things

Response to rising food prices
Buy only the essentials we
Whether Food Prices are need/cut down on luxuries 54
Increasing, Stable or
Decreasing Actively look for and buy products
on special/discounted prices 42
3
34 Buy less in total 34

Switch to cheaper brands 24
63
Buy in bulk to get lower prices 21

Total
Does not affect me 7
Increasing
Stable
Decreasing
Base: All Supermarket shoppers highest
Base: All Supermarket shoppers (n=1494) in food prices (n=964)

Due to price competitiveness, Store Brands have potential to grow further

Store brand product purchasing Reasons for buying store brands

Whether buying more Store Less expensive than named
Brand Products 51
brands

Don't More They offer really good value for
44
know, 2% , 14% money
Never, 29
% Quality just as good as named
44
brands

Quality of store brands is improving 37

Same, 39 Word of mouth. Others have
Less, 16 % 23
recommended them
%
Products I want are only available
16
in store brands
Base: All store brand buyers (n = 720)


VIETNAM RETAIL HIGHLIGHTS

RETAIL STRUCTURE - OFF PREMISE STORES NUMBER (6 CITIES)
Channel No. of 2009 No. of 2010 No. of 2011
Modern Trade (SM / MM) 537 642 811
Traditional Grocery Store 89584 91515 97221
Street Vendor 1595 1782 1840
Personal Store 4082 3779 3785
Market Stall – Mixed Business 3378 3138 3207
Market Stall – HPC
3672 3223 2986
(Health & Personal Care)
Market Stall – Chap Pho 4581 4650 4527
Cosmetic Store 577 1045 1230
Beverage Store 7097 8728 9338
Dairy Shop 807 778 744
Milk /Biscuit/Spirits Store 561 608 538
Market Stall – MBS 186 201 212
Cigarette Kiosk 8524 7400 7951
Soft Drinks / Ice Cream Outlets 3196 3603 3668
Pharmacy 9010 10114 11119
Liquor Shop 244 323 366
Biscuit / Confectionery Store 303 358 491
Maternity & Baby Shop 1971 1997 2376
TOTAL OFF PREMISE 139,905 143,884 152,410

Source: Nielsen Vietnam Census 2011



NATIONAL FMCG RETAIL MARKET STRUCTURE

100%
90%
26.09%
80% 41.31%
70% 9%
60% 5%
10%
50%
4%
40%
30% 60%
20% 44%

10%
0%
Stores 2011 FMCG ACV Contribution 2011
Rural 53 cities 30 cities 6 cities

STORE NUMBER (‘000 stores) BY TIERS - OFF - PREMISE VS ON - PREMISE 2011

1,400
1,236
1,200

1,000

800 713 741

600 522
472
400 322
269
170
200 141 152 32
105 111
38 39
77 64 77 51 54 30 61 57 54
0
Total 4 cities Total Total Rural 6 cities 53 cities 30 cities
Vietnam HCM Hanoi

Off Premise On Premise Total

(*) 53 Cities 2010 FMCG contribution is estimated based on FMCG Growth rate in 36 Cities.


OFF - PREMISE STORE NUMBER IN TOTAL URBAN VIETNAM BY TIER

300,000

250,000 241,261
223,554

200,000 227,532
152,410
150,000 139,905

143,884
100,000
53,263 57,104
50,000 30,387 31,747
30,544 53,104
-
Total Urban Vietnam 6 cities 53 cities 30 cities

2009 2010 2011


FMCG VALUE CONTRIBUTION BY TIER - TOTAL OFF PREMISE

50% 45% 44%
41%
40% 39%

30%

20%
11% 11%
10% 4% 4%
0%
6 cities 30 cities 53 cities Rural
2010 2011




OFF PREMISE STORE NUMBER IN TOTAL 36 CITIES VIETNAM BY STORE TYPE

140,000 132,735
125,449
120,000
100,000
80,000
60,000
40,000 16,884
11,132 10,183 14,018
16,805 7,527
20,000
756 2,688 5,222 1,252 12,587 11,935 15,119
943 2,611 5,186 1,584 994906 883 869 8,234
-

2010 2011

OFF PREMISE 36 CITIES VIETNAM FMCG CONTRIBUTION BY STORE TYPE

%
60
51.4
50 48.4

40
30.5
30 25.8

20
5.5 4.2 4.3
10 1.9
0.4 1.4 5.0 0.7 4.0 1.4 4.1 0.6 2.3
0.4 1.3 0.7 1.1 1.7 0.6 2.2
0

2010 2011



NUMER OF MODERN TRADE STORES
1,200

1,000 956

819
800 751
642
600

400

200 137
109

0
36 CITIES 30 CITIES 6 CITIES

2010 2011

Modern trade contribution by FMCG Department

Source: Nielsen Vietnam Retail Tracking 2011, six cities.



ON PREMISE STORE NUMBER IN TOTAL VIETNAM BY STORE TYPE

600,000
511,693 522,394
500,000

400,000

300,000 270,863 268,547

200,000 170,058
159,861

100,000 51,748 54,042
29,221 29,747
-
TOTAL Rural 53 cities 30 cities 6 cities
VIETNAM

2010 2011

FMCG VALUE CONTRIBUTION BY TIER TOTAL VIETNAM ON PREMISE

50.0%
46% 45.2%
45.0%
41% 41.5%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
9% 9.2%
10.0%
4% 4.1%
5.0%
0.0%
6 cities 30 cities 53 cities Rural

2010 2011


Top 10 categories in 6 cities

2011 vs. 2010




Number of SKUs

14,000
11,837
12,000
9,932
10,000
7,679
8,000
6,307
6,000
4,000 2,666 2,563
1,793 1,597 1,606
2,000 1,142
194 224 417 484
0
Personal Home Care Foods Milk Based Beverage Cigarette Baby Care
Care
2010 2011


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HOUSEHOLD INCOME CLASSIFICATION 37

HOUSEHOLD INCOME CLASSIFICATION

Household Income Band (HIB) Classification System Overview
This classification system is based on gross monthly income

HIB Household Income Band (VND)

A5 150,000,000 or higher

A4 75,000,000 - 149,999,999

A3 45,000,000 - 74,999,999

A2 30,000,000 - 44,999,999

A1 15,000,000 - 29,999,999

A 15,000,000 or higher

B 7,500,000 - 14,999,999

C 4,500,000 - 7,499,999

D 3,000,000 - 4,499,999

E 1,500,000 - 2,999,999

F 0 - 1,499,999


38 HOUSEHOLD INCOME CLASSIFICATION

HOUSEHOLD INCOME BANDS IN HA NOI AND HCMC
HANOI HCMC HCMC & HANOI
HIB
Urban Rural Total Urban Rural Total Urban Rural Total
A2+ 2% 0% 1% 4% 0% 3% 4% 0% 3%
A1 14% 3% 8% 13% 6% 11% 13% 4% 10%
A 16% 3% 9% 17% 6% 15% 17% 4% 12%
B 38% 22% 29% 36% 25% 34% 37% 23% 32%
C 37% 40% 39% 34% 36% 35% 35% 39% 37%
D 8% 29% 20% 11% 28% 14% 10% 29% 17%
E 1% 4% 3% 1% 5% 2% 1% 4% 2%
F 0% 0% 0% 0% 1% 0% 0% 0% 0%
TOTAL 100% 100% 100% 100% 100% 100% 100% 100% 100%

Source: Nielsen database 2011

HOUSEHOLD INCOME BANDS IN 5 MAJOR CITIES
HAI 5 KEY
HIB HA NOI PHONG DA NANG HCMC CAN THO CITIES
Urban Urban Urban Urban Urban Urban
A2+ 2% 3% 2% 4% 3% 4%
A1 14% 4% 4% 13% 3% 11%
A 16% 6% 6% 17% 6% 15%
B 38% 29% 27% 36% 23% 34%
C 37% 52% 45% 34% 39% 37%
D 8% 11% 20% 11% 26% 12%
E 1% 1% 1% 1% 6% 2%
F 0% 0% 0% 0% 0% 0%
TOTAL 100% 100% 99% 100% 99% 101%


HOUSEHOLD INCOME CLASSIFICATION 39

HOUSEHOLD INCOME BANDS OF VIETNAM

VIETNAM
HIB
URBAN RURAL TOTAL
A2 3% 0% 1%
A1 7% 1% 3%
A 10% 1% 3%
B 26% 8% 14%
C 40% 28% 32%
D 20% 40% 34%
E 4% 19% 14%
F 0% 3% 2%
TOTAL 101% 100% 100%


40 HOUSEHOLD INCOME CLASSIFICATION

HOUSEHOLD EXPENDITURE IN HA NOI AND HCMC

HOUSEHOLD HANOI HCMC
EXPENDITURE (VND) Urban Rural Total Urban Rural Total
15,000,000 - 29,999,999 2% 0% 1% 3% 1% 2%
15,000,000 or higher 2% 0% 1% 3% 1% 3%
7,500,000 - 14,999,999 29% 9% 17% 24% 15% 22%
4,500,000 - 7,499,999 52% 48% 50% 43% 32% 41%
3,000,000 - 4,499,999 16% 37% 28% 26% 40% 29%
1,500,000 - 2,999,999 2% 6% 4% 4% 10% 5%
0 - 1,499,999 0% 0% 0% 0% 1% 0%
TOTAL 100% 100% 100% 100% 100% 100%


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VIETNAM DEMOGRAPHIC 41

DEMOGRAPHICS

POPULATION BY SEX AND BY AGE GROUP IN VIETNAM 2011

AGE GROUP TOTAL FEMALE MALE
Total 86,927,700 43,937,000 42,990,700
0 1,461,479 696,522 764,957
1-4 5,647,234 2,707,835 2,939,399
5-9 6,777,975 3,282,538 3,495,437
10-14 7,315,865 3,552,836 3,763,029
15-17 5,286,210 2,577,882 2,708,328
18-19 3,771,128 1,852,681 1,918,447
20-24 8,537,934 4,232,079 4,305,855
25-29 7,884,053 3,931,801 3,952,252
30-34 6,945,409 3,442,403 3,503,006
35-39 6,601,838 3,266,617 3,335,221
40-44 6,027,979 3,028,417 2,999,561
45-49 5,505,919 2,835,192 2,670,727
50-54 4,455,920 2,351,780 2,104,141
55-59 3,012,453 1,634,482 1,377,971
60-64 1,955,479 1,085,114 870,365
65-69 1,568,963 909,177 659,786
70-74 1,424,653 851,098 573,554
75-79 1,208,613 724,295 484,318
80-84 731,560 464,325 267,234
85+ 627,145 441,769 185,377
Source: Estimate from 2010 Census of population & Statistical Year Book 2010


42 VIETNAM DEMOGRAPHIC

POPULATION BY PROVINE IN VIETNAM 2000-2010
REGION/ PROVINCE 2006 2007 2008 2009 Prel.2010

TOTAL VIETNAM 83,311,200 84,218,500 85,118,700 86,025,000 86,927,700

Red River Delta 19,108,900 19,228,800 19,473,700 19,618,100 19,770,000
Ha Noi 3,184,800 3,228,500
6,381,800 6,472,000 6,561,900
Ha Tay 2,742,400 2,773,700
Vinh Phuc 1,166,000 1,174,100 993,800 1,000,400 1,008,300
Bac Ninh 999,800 1,009,400 1,018,100 1,026,500 1,034,200
Quang Ninh 1,109,300 1,122,500 1,135,100 1,146,100 1,159,500
Hai Duong 1,689,700 1,694,700 1,700,800 1,706,800 1,712,800
Hai Phong 1,789,100 1,806,500 1,824,100 1,840,400 1,857,800
Hung Yen 1,116,400 1,121,300 1,126,200 1,128,600 1,132,300
Thai Binh 1,787,400 1,783,900 1,782,700 1,783,100 1,786,300
Ha Nam 790,000 788,400 786,900 786,200 786,300
Nam Dinh 1,839,400 1,829,700 1,826,100 1,828,400 1,830,000
Ninh Binh 894,600 896,100 898,100 899,600 900,600

Northern Midlands and Mountain 10,904,300 11,004,200 10,997,300 11,073,500 11,169,300

Ha Giang 693,400 704,900 716,200 725,100 735,800
Cao Bang 506,800 508,600 510,500 511,200 513,100
Bac Kan 290,000 291,800 293,600 294,600 296,500
Tuyen Quang 715,700 719,400 723,500 725,200 728,900
Lao Cai 590,200 598,300 606,500 615,800 626,200
Yen Bai 725,400 731,600 737,500 741,700 746,400
Thai Nguyen 1,106,500 1,113,000 1,120,300 1,125,400 1,131,300
Lang Son 726,300 728,200 730,700 733,200 735,600
Bac Giang 1,543,000 1,548,800 1,554,600 1,556,900 1,560,300
Phu Tho 1,301,500 1,305,600 1,311,500 1,316,600 1,322,100
Dien Bien 452,700 466,000 479,300 490,800 504,500
Lai Chau 360,700 364,400 367,900 371,400 382,400
Son La 1,033,500 1,050,800 1,067,200 1,079,200 1,092,700
Hoa Binh 858,600 872,800 778,000 786,400 793,500

North and South Central Coast 18,667,400 18,729,100 18,797,900 18,855,700 18,935,500
Thanh Hoa 3,428,000 3,417,300 3,408,800 3,404,300 3,406,800
Nghe An 2,900,100 2,905,200 2,912,100 2,914,500 2,917,400
Ha Tinh 1,243,600 1,239,000 1,234,000 1,227,800 1,228,000
Quang Binh 834,500 838,500 843,500 845,000 849,300
Quang Tri 591,900 594,100 596,700 598,600 600,500
Thua Thien Hue 1,076,900 1,081,000 1,084,900 1,087,600 1,090,900
Da Nang 825,900 847,500 868,800 894,500 926,000

Understanding Vietnam's Changing Consumer Landscape

Understanding Vietnam's Changing Consumer Landscape

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