Consumer Trends 2020

BBGV 12th Feb 2020

Phil Worthington

317%

196%

128%

59%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

BrandZ Top 10 Powerful Brands

BrandZ Strong Brands Portfolio

S&P 500

MSCI Word Index

Strong brands generate superior shareholder returns than leading market indices

Strong brands make a company more money

2

This brand lost US$30 million in sales. Why?

The redesign eliminated

Tropicana’s orange-with-a-

straw graphic, which had

been a familiar brand

reference for shoppers at the

shelf

Colour coding was

dramatically reduced in the

new packaging, making it

difficult for shoppers to

identify product variants.

The new packaging reduced

the emphasis on the

Tropicana brand, playing up

the “100 percent orange”

claim instead

Original packaging The re-design

3

Consumer Trends for Today

1. Taking into account regional differences

2. Consumers love new launches but they are risky

3. Consumers have gone digital crazy

4. E-Commerce is booming

5. Sustainability

4

1 There is more than one Vietnam

HANOI➢ Population: 7.5 million

➢ GDP: US$ 27.6 Billion

➢ GDP per capita: US$ 3,600

DANANG➢ Population: 1.029 million

➢ GDP: US$ 2.992 Billion

➢ GDP per capita: US$ 2,908

HCMC➢ Population: 8.2 million

➢ GDP: US$ 43.7 Billion

➢ GDP per capita: US$ 5,318

Danang-ese

aspires for smooth

sailing in life.

Hanoi-ans are

more pragmatic.

They want is a high

level of social

status.

Saigon-ese

chooses to live life

to the fullest no

matter what

obstacles they

face.

5

Danang

Life is going to be smooth sailing. Life

should be not a competition. It’s more

about how to get enough to secure the future, then that’s it

“ Actually I have been to

HCMC. I lived there for 4

months. But I think they

have factors that I like

but I still prefer to live in

Danang as it’s more

peaceful & less

competitive. Here, I still

have a good pay, have

things to entertain since

now we have more

international festivals like

food festival or recently,

the firework festival is

happening right now

here or we even have

Starbuck like Saigon…”

6

Hanoi

Hanoi-ans are more

pragmatic. All they want is a

high level of social status.

“Now I’m in the last year

of my college and I

wanna have a job after

graduation. Maybe my

brother can help me with

it as he has some kind of

relationship in his

company so he can help

me to get a place there”.

“I want to buy car, but I

will ask for a financial

support from my mom”.

7

Saigon“The world is moving so you have to make a move

too; even a risky one. Life offers a land of

opportunities. It is just about how well you take

and seize them”.

“I used to work for an IT

company but the salary

is not attractively high

and had to take me long

time to get promoted to

get paid better, so I

decided to learn filming

then rising my interest in

photography so I

decided to open my

own studio some years

ago”.

“If I won lottery, I would

re-invest into my business

to expand the size”.

8

Different product name and packaging

in North v.s. South

Different product name, packaging and

communications in North v.s. South

..respect & leverage cultural differencesHow Brands Adapt to Regional Differences

9

Appeal more to northern consumers

with Premiumness & Fashion

association

vs

Trying to win more Southern females

by dialing up ‘stronger’ personality

of girls

How Brands Adapt to Regional Differences

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✓ Trust is critical

✓ Anecdotal evidence can trigger trial

✓ Functional demonstration or Expert’s

endorsements are good ways to get into their heart

✓ Trial and adoption takes place more quickly

✓ New news is key trigger to try

✓ Marketing activities (TVCs, promotions and

samplings) can trigger trial

2. New brands or launches need different

approaches/1

New launches take a longer time to fly yet consumers are

more loyal once they trust the brand

Trial and adoption takes place more quickly

How Brands Adapt to Regional Differences

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2. New brands or launches need different

approaches/1

South: Mirinda Soda Cream. Works better in South as:Creating New Taste desire via Fun/ Engaging styleExcite the trial motivation by new term ‘Ngon xoắn lưỡi’ (Tongue twist delicious)

North: Ariel Matic 2019. Works better in North as:- Establish TRUST with Miss

Vietnam

Empowered by new technology (3D technology) – RTB is very important in North

How Brands Adapt to Regional Differences

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2. Vietnam Has Gone Digital Crazy

13

Youtube – 50 million Vietnamese

users

Spend 1.7 hours on YT per

weekday

Internet penetration 66% (SE Asia

average is 63%)

Smartphone penetration is 72%

Vietnam Has Gone Digital Crazy

14

of Vietnamese consumers say ads are appearing in

more places now

of people say that advertising is more intrusive now

Consumers are acting on this:

of Gen Z in Vietnam have installed an ad blocker

85%

6 10

22%

out of

However consumers are less receptive to advertising on digital

channels…

Source: AdReaction 2018 – Kantar Millward Brown15

Ensure you have something compelling and distinctive to engage in the first few seconds

Viewer share(%)

Duration of ad (seconds)

Video Playback Behavior

0 10 20 30 40 50 60 70 80

100

90

80

70

60

50

40

30

20

10

0

Ads have less than 3 seconds

to deliver in a cluttered online environment

Average (ad) dwell time

2.3s

One way around this is the rise of Native Advertising

Confidently identify

native ads as

sponsored content

Match the site’s

editorial tone

Create content that

resonates with the

audience

1

2

3

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Sometimes it’s important for

your ad to blend in.

Often, it’s more important

to stand out.

This is the fine line native ads walk.

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Innovations

19

Innovation: Enormous number of new launches every year, but only a few find

real success

Top launches which reach 1% penetration or

500k households for 1 year

1.7%

Among 107,968new launches in 7 markets*

only

2.1% 0.4%

3.5%4.1%

Spain UK

Vietnam China

% top launches in some markets

Source: Worldpanel Division | Innovating for Growth report

*7 markets including the UK, China, Vietnam, Brazil, Spain, Mexico, Germany

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Vietnam’s FMCG market is much more innovative over time

3

30

2014

Source: Worldpanel Division | Household Panel | Urban 4 key cities | FMCG *New launches are counted based on new brand, variant, pack size, pack type

7,184

new launches

5,909

new

launches

3

30

2018

16.2new bees/day

19.7new bees/day

In 2018, new launches

appeared almost

every hour !

21

NUTIFOOD

TROPICANA TWISTER JUICY MILK

The new juicy milk category

22

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Source: Worldpanel Division | Lifestyle Survey | Urban key 4 cities Vietnam

With more offers in the market, consumers nowadays are more skeptical of

the influencing factors around them, implying that not all innovations are

easily adopted

• Try new product after

seeing its advertisements

• Believe in benefits

claimed by products

• Impulsively buy products

with in-store displays

FEWER households

(2018 vs 2011)

Only

39%Households agree

”

I tend to try new

products if others

recommended.“

In fact, they spend on average 1 million

dong in a year on new launches, 122k

more than those who disagree

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4. The Rise of E-Commerce

Online, Mini Stores and Specialty Stores are today’s top 3

growing FMCG channels

Total FMCG value spend year-on-year change

91.0%

36.3%

14.3% 11.2% 6.5% 5.0% 3.2%

-1.1% -4.1%

Online Mini Stores SpecialtyStores

HyperSuper

Direct Sale AllChannels

WetMarket

StreetShops

GT Others

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift | 12 months ending June 2019

FMCG growth:

5.0%

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And there is huge potential for growth, for ecommerce

Ticket in k VND

per shopper per tripPenetration %

99.1

78.4

56.1

61

25.4

Street Shops

Hyper-Super

Specialty…

Mini Stores

Online

Number of trips

per year per shopper

95.7

14.5

9.8

13.8

4

92

195

256

97

356

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift | 12 months ending June 2019

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E-Commerce Is Extremely Competitive

Meaningful Difference Salience Power Index

Lazada

111

104

140

18.7

Sendo

105

89

10013.5

Shopee

150

127

16224.3

Tiki

133

138

12721

Sample size: N=400, Sample definition: 50% Male, 50% Female, 18-65 years old

Category introduction: shopping sites or apps that offer a range of goods such as clothing, homewares, electricals or health and beauty products

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Ecommerce as a channel will inevitably continue its

spectacular growth

-

10

20

30

40

50

60

70

Rolli

ng

Onlin

e p

ene

tra

tion

China Key & Acity

Online shopping penetration in China was at

almost the same level as we have in Urban

Vietnam today, 7 years ago…

% online FMCG buyers

# of online FMCG trips

2018 MAT P6 2019 2025F

22.4%

3.6

25.2%

4.0

60.0%

6.1

“

”

Vietnam level today

Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift

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5. Sustainability

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Sustainability is now a real concern for consumers

Top 3Household’s Concerns

Food safety

Health & Wellness

Environmental

issues / Diseases

1st

3rd

2nd

30

Banking

Meaningful Difference Salience Power Index

ANZ

71

101

59

2.1

Eximbank

79

79

714

HD Bank

77

79

693.7

Maritime

Bank

71

88

62

3

Sacombank

106

103

108

8.4

SeABank

63

72

68

2.5

SHBank

70

86

60

2.5

Techcombank

128

115

858.5

Vietcombank

149

135

19016

ACB

110

106

98

7.6

Dong A

95

88

956.5

HSBC

85

118

684.6

Agribank

99

93

144

10

BIDV

128

112

126

10.8

VietinBank

119

105

1279.9

Sample size N=400, Sample definition: 50% Male, 50% Female, 18-65 years old

Category introduction: organizations that offer current or savings accounts, i.e. accounts that allow you to make deposits and withdrawals, and conduct other financial transactions.

A great opportunity for banks to enhance their consumer experience

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