TNS Consumer Trends 2008

8/7/2019 TNS Consumer Trends 2008

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Consumer t rendsConsumer t rends

Ralf MatthaesRalf Matthaes

managing directormanaging director

TNS VietnamTNS VietnamAMCHAM

October, 2008

Condensed version

20082008


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AMCHAM Consumer trends 2008AMCHAM Consumer trends 2008

Key Consumer trendsKey Consumer trends19991999--20082008State of the nationState of the nation

WealthWealth

InflationInflation

ConsumptionConsumption

BrandingBranding

My DreamsMy Dreams

TechnologyTechnology

Financial CrisisFinancial Crisis

Stock MarketStock MarketMediaMedia

Rural VietnamRural Vietnam

ProductProduct

RetailRetail


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The state of t heThe state of t he

Consumer Nat ionConsumer Nat ion


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Vietnam Happiness IndexVietnam Happiness Index 20062006--20082008

2006 Source: World value survey: 2008 source: TNS Vietcycle 2008

53.5

43.5

3

49

44

7

0

10

20

30

40

50

60

Very happy Quite happy Not happy

2008 2006

Vietnamese consumers continue to be a very happy lot,indicating that not much has negatively impacted their lives

Hanoi & HCMC only


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My standard of livingMy standard of living Hanoi & HCMC onlyHanoi & HCMC only

0.4

2

2.2

37

40

36

49

51

52

6

5

9

0

25

VC-2004

VC-2006

VC-2008

Much lower than today Somewhat lower than todayEqual to today Somewhat higher than todayMuch higher than today

Wealthyhavereasontosmile

Source: TNS / Gallup - Voice of People Survey

The rich are getting richer & 2/3rd believe their lot will increase


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Wealth TrendsWealth Trends


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GDP per capita evolutionGDP per capita evolution -- USDUSD

In USD

Source: Vietnam Economic Times KINH TE 2007-2008GDP has doubled in 7 years

289

402412

440

491

552

639725

835

0

100

200

300

400

500

600

700

800

900

1995 2000 2001 2002 2003 2004 2005 2006 2007

Source: GSOVN

412412

835835


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I mpact of inf lat ionI mpact of inf lat ion


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Source: Vietnam Economic Times KINH TE 2007-2008

GDP & InflationGDP & Inflation

impact on disposable incomeimpact on disposable income

Inflation is decreasing Disposable income

8%

0.8

18.6

12.6

4.0 3.0

9.5 8.4

3.60.1

9.2

6.6

-5

0

5

10

15

20

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Inflation % GDP Growth %

-1.6

%


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How Vietnamese Combat inflation (by Income)How Vietnamese Combat inflation (by Income)

63

37

20

17

7

57

49

12

25

8

60

41

18

17

8

72

30

26

13

6

Buy less

Hold off on buying more expensive

big ticket items to be able to afford

inflationary increase

Switch to cheaper brands

Use some of savings to pay for

higher price

Just buy what I usually buy and

don't worry about the price

increase

Total Class AB

Class CD Class EF

Most consumers are buying less to combat inflation& holding off purchasing big ticket items

Source: TNS Gallup 2008 Voice of the People Survey


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39.637.2

-4.5

11.2

46.9

14.5

-17.2

20.0

All Households High Income Middle Income Low Income

% Value Change 06 vs. 05 % Value Change 07 vs. 06

Consumer Spend inflation ImpactConsumer Spend inflation ImpactTotal FMCG Total 4 key urban cities

High income earners are spending more, but middleincome & low income earners are spending much less

6.5 milvnd plus

3.5 mil -6.5 vnd

Below3.5vnd

FMCG Trends % value Changes Source: TNS Worldpanel Asia


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Consumpt ion TrendsConsumpt ion Trends


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FMCG Growth in Asian countries (%)FMCG Growth in Asian countries (%) -- 20072007

11

16

-2

2

9

-2

2

Urban

Vietnam

National

China

National

Thailand

National

Taiwan

National

Malaysia

National

Korea

National

Philippines

Vietnam is experiencing the second fastest FMCG growth in Asia.However, growth has dropped from 21% in 2006 to 11% in 2007

FMCG Trends % value Changes Source: TNS Worldpanel Asia

11

20

-22

9

-2

2


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72% Price is the most important

factor when grocery shopping

70%I always compare prices betweenbrands before buying

63%I know the shelf prices of theproducts I want to buy

Mini Life Style 2007 - TNS Worldpanel Vietnam

Consumers are Very PriceConsumers are Very Price--Conscious!Conscious!


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17.0%

11.4%

10.3%

7.9% 7.7% 7.4%

6.4%5.6%

5.1%4.7%

Khong

do

Vinamilk Trang

Tien

Sting

(Pepsi)

Maggi C2 Tw ister

(Pepsi)

Vinh Hue Chinsu Aji-Ngon

20072007 10 fastest growing brands10 fastest growing brands

Source: TNS Worldpanel

Five of the ten fastest growing brands were Vietnamese in 2007

V VVV V


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20082008 -- 10 fastest growing brands10 fastest growing brands

Gillette

(Razor)

Wonderfarm

(Vegtable

juice)

Pulppy (Hand

Towel)

C2 (RTD Tea) Vinamilk

(Drinking

Yoghurt)

Sting (Energy

Drink)

Gift (Glass

cleaner)

Maggi (Soy

sauce)

Trang Tien

(Ice Cream)

Cholimex

(Ketchup

Tomato) (

Share (%) gain in MAT Jun/08 vs. MAT Jun/07

17%

14%13%

10%

21%

17%

14%

22%

10%

20%

Thus far in 2008, four of the fastest growing brands wereVietnamese and 8 were launched in the last 36 months

Source: TNS Worldpanel 2008 (urban only)

V V VV


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My dreamsMy dreams


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3027 26

23 2320 19

24

37

2

22

37

32

38

49

29

0

20

41

36 34

0

20

40

60

Hou

se/Pr

oper

ty Car

LCD/Pl

asma

TV

Airc

ondit

ioner

Washing

mac

hine

PC/

Desk

stop

Motor

bike

VC 2008, n=857 VC 2004, n=1,315 VC 2001, n=1,232

Top Desired PurchasesTop Desired Purchases All SECAll SEC

Source: TNS VietCycle 2001-2008

Aspirational purchases are in decline as manyconsumers have already fulfilled their dreams


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AspriationalAspriational PurchasingPurchasing the personal touchthe personal touch

I will choose a mobile phone

brand which can tell peoplethat Im youthful, fashionableand proactive

I only buy brands that

make me look more

mature, sophisticated andconfident

Iwanttoberecognizedasawealthyandup-to-

dateperson,soIbuyhigh

qualitybrands

Source: TNS 2007-2008 FGDs


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Brand impactBrand impact


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4335

30282221

SEC A SEC B SEC C SEC D SEC E SEC F

Preference of Vietnamese brands

Stage 1:Basic needs

Stage 2:Upgraded

needs

Stage 3:

Social recognition

Stage 5:Self-fulfillment

Stage 4:Esteem

TodayTodaysConsumer

sConsumer

Advertising Brand Consumer CycleAdvertising Brand Consumer Cycle


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Vietnamese brand perceptions are changingVietnamese brand perceptions are changing

My children will be veryintelligent and grow-up faster

as I feed her by a good qualitypowder milk. I feel that I am agood mother

I always choose the most expensive

detergent which I think it has the best

quality and good for my families clothes.I feel happy when my husband says to

others that I am a good housewife

Source: TNS 2007-2008 FGDs

PeoplesaythatIamamodern

motherbecauseIchoosegood

qualitybrandsformybaby.Itshows

mygreatloveformychildren

RECOGNITIONRECOGNITION


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9188

6770

4347

5044

49

0

20

40

60

80

100

1999 2004 1999 19992004 20042008 2008 2008

I usually buy brands

on promotionI switch brands

just to try

Country of origin ismore important than

branding

Vietnamese brand perceptionsVietnamese brand perceptions

Source: TNS VietCyle 1999-2008 Urban (HN - HCMC)

Vietnamese Brand perceptions are beginning to mirrormore developed countries, further stressing brand strategy

91

70

50

88

43 44

67

47 49


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Summarizing brandingSummarizing branding

Branding in Vietnam is critical because consumers Young

Wealthier

Aspirational

Want what is popular

Want what is reliable

More sophisticated

Still price sensitive

The key today is social recognitionsocial recognition


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Technology TrendsTechnology Trends


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81.7

84.4

51.3

30.6

28

74

53

40

28

22

16

17

21

16

1

0 10 20 30 40 50 60 70 80 90

Video disk VCD

Mobile phone

Personal computer

Karaoke machine

DVD player

2008 2004 1999

Mobile Phone ownership increased by 33% in 2 years

Technology EmbracersTechnology Embracers HCMC & HanoiHCMC & Hanoi

Source: VietCycle 1999-2008

DVD Player

Karaoke Player

PersonalComputer

Mobile Phone

VCD Player


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31

43

47

39

22

28

55

5045

20

4650

24

354232

39

13

16

28

25

3335

2328

32

5

36

47

47

59

42

43

G lob

al,n

=134

68

China

,n=6

97

India

,n=4

8 2

Indo n

esia,

n= 3

7

Tha

iland

,n=4

57

Vie

tnam

,n=2

45

U SA ,

n=8

67

UK,n

=485

R us s

i a,n

=500

Braz

il ,n=

245

Mex

ico,n

=299

Using digital MP3 player on phone Using AM/FM radio on phone Nett - Using mobile music

Mobile music usageMobile music usage By countryBy country

Huge opportunities exist for Radio in Vietnam via Mobile

Source: TNS 2007 GTI


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48

84 80

7060 60

55

39 38

25

8

Global, Idonesia,

Frequency of SMS usageFrequency of SMS usage By countryBy country

SMS marketing opportunities are enormous & need to be explored

Source: TNS 2007 GTI


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InIn--home Internet penetrationhome Internet penetration

Source: TNS VietCyle 1999-2008 HCMC & Hanoi

In 9 years, In-home internet penetration increased by over 1000%,opening up new marketing & information avenues in Vietnam

3

89

21

34

0

10

20

30

40

1999 2001 2004 2006 2008


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Financial Cr isis !Financial Cr isis !


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Total Expenditure & SavingsTotal Expenditure & Savings HCMC & HanoiHCMC & Hanoi

Source: TNS VietCycle 1999-2008

83

86

88

91

17

14

12

9

0% 20% 40% 60% 80% 100%

VC-1999, n=1304

VC-2001, n=1232

VC-2006, n=441

VC-2008, n=857

Total expenditures Saving

Savings continue to drop, showingVietnamese overall consumer confidence


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Bank loan this yearBank loan this year

614

4 3

9486

96 97

Total Class AB Class CD Class EF

Yes No

Only 6% have taken out loans in the last 12 months,while 14% of wealthier have classes have done likewise

Source: TNS Gallup 2008 Voice of the People survey


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Purpose of loansPurpose of loans

43

23

18

14

13

Investing in business

Education

Repairing/ Upgrading

my house

Buying real estate

Buying transportation

Most loans have beeninvested back into

businesses (43%).while home repair /

real estate (37%)have been other big

investments

43

14

18

23

13



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VietnamVietnams Stock Markets Stock Market


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5

14

4 3

9586

96 97

Total Class AB Class CD Class EF

Yes No

Investment in Stock marketInvestment in Stock market 370 index370 index-- Oct 15, 2008Oct 15, 2008

5% of urban consumers have invested in the stockmarket, but 3 times as many wealthy consumers have



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33%

22%

45%

I don't earn much money and I want to earn

additional money through investment

I have some free money and don't want the

low interest rate of bank saving

I see others people do it

Reasons for investment in Stock marketReasons for investment in Stock market

An emerging trend of Monkey see, Monkey do isImpacting all facets of Vietnamese consumers lives



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Fullysatisfied

4%

Not very

satisfied22%

Not

satisfied at

all19%

A little

satisfied

11%

So-so

44%

Satisfaction with profits from Stock marketSatisfaction with profits from Stock market

Only 15% of all investors are happy with their returns



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Media TrendsMedia Trends


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Source: TNS Media Vietnam

RadioRadio 36% daily listenership

fastest growing media medium in VN

Radio & internet are becoming a genuine advertising opportunities

InternetInternet

Highly under utilized (US $6 mil. / year)

Captivated and young audience


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TelevisionTelevision

Viewership

F-T-A down

Cable up

growth at 16% in 08 vs. 20% in07

Source: TNS Media Vietnam

TV is over fragmented, while print is becoming more competitive

PrintPrint

713 daily and periodical publications

77% urban population read last week All major newspapers also online


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Though ad spend is down from 2006, with the continuation of FDI &local success, the industry should continue to grow at about 20%

AsiaAsias Media Spend Growths Media Spend Growth 20072007

18

15

4

22

34

India Vietnam China Indonesia M alaysia Thailand Phil ippines

Source: TNS AP offices

23

16% growth as of Sept. 2008


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VietnamVietnams Rurals Rural

ConsumerConsumer


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4 Key Urban CitiesPopulation (%): 9.9

GDP (%): 25.6

Secondary CitiesPopulation (%): 13.6

GDP (%): 11.9

Rural Locations

Population (%): 76.5

GDP (%): 62.5

The potential of Rural VietnamThe potential of Rural Vietnam

Source: GSO VN

2/3rd of GDP resides in Rural Vietnam, an untapped market


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4,958,760

1,546,280 1,279,6802,132,800

17,243,688

4,105,640

1,231,692

11,906,356

Total available consumers 1.5mln - 3mln 3mln - 4.5mln > 4.5mln

Urban Rural

Consumers earning more thanConsumers earning more than

1.5 m VND / Month1.5 m VND / Month

Urban vs. Rural Household SpendUrban vs. Rural Household Spend

There are 3 times more available consumerin Rural Vietnam than Urban Vietnam

Source: TNS Rural Monitor Pilot


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Rural Durable OwnershipRural Durable Ownership

Many household items are permeating Rural Households

9%

Computer

Internet

1%

@@Refrigerator

30%

32%

Radio/ Cassette

Color Television

95%

Electronic Cooker

92%

Mobile Phone

33%

Source: TNS Rural Monitor Pilot


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33Major ProductMajor Product

TrendsTrends


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convenienceconvenience

healthhealthindulgenceindulgence

Vietnamese consumers are looking forVietnamese consumers are looking for


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convenienceconvenience

80% saidTime spentcooking is wasted

Consumers looking forConsumers looking for


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Source: TNS Worldpanel Vietnam Mini Lifestyle 2007

indulgenceindulgence

89% said I buybrands that are of

good quality, evenmore expensive

Consumers looking forConsumers looking for


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Retailer TrendsRetailer Trends


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20082008Vietnam topsA.T. Kearneys annual list of most

attractive emerging market retail

destinations


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Retail environment in AsiaRetail environment in Asia -- 20072007

Though small, Modern trade will grow substantially in Vietnam

48

1833 34

51 54 55 60

Asia

Vietna

m

Philippin

es

Thaila

nd

China

Taiwan

Korea

Malay

sia

Source: TNS Worldpanel Asia 2007

Traditional Trade Modern Trade


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DISTRIBUTIONDISTRIBUTION

Sales growth per channel (%)Sales growth per channel (%)

By 2009, moderntrade will take off

in Vietnam!

19.4

11.8

10.7

8.9

0.8

16.8

MODERN TRADE

DIRECT SALES

ALL RETAILERS

STREET SHOPS

MARKET

SPECIALTY

Source: TNS Worldpanel: N = 2000 urban Households Excl. Gift MAT P1107


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Modern Trade emergenceModern Trade emergence 2008 growth2008 growth

Modern trades value share grew by 26% in 2008

Source: TNS Worldpanel

16

17

18

62

61

61

14

14

13

8

8

7

MAT Jun/06

MAT Jun/07

MAT Jun/08

Modern Trade Street Shops Wet markets Others


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Penetration per month

More and more trafficMore and more traffic

41.7

46.750.8

1

11

21

31

41

51

61

71

81

91

2003 2005 2007TOTAL FM CG

50%urban householdsgo to shop in MT each month!

Keeps growing


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Quality of products 83%

Comfortable and Clean/Safe

76%

Innovation & promotion

82%

What do consumers think of Modern Trade?What do consumers think of Modern Trade?

More expensive 70%

Far from home 34%

Little advice from staff

40%

Hard to carry

47%Wide assortment 83%

Not true,actually8% lower


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As you can see, Vietnam is changing a lot andAs you can see, Vietnam is changing a lot and

unfortunately, so am Iunfortunately, so am I

Hanoi, Jan. 1994Hanoi, Jan. 1994 HCMC, Jan. 2008HCMC, Jan. 2008

Deputy Prime MinisterPham Gia Khiem


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Th k Y C O


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Thank You / Cam OnThank You / Cam On

[email protected]

www.tnsglobal.com
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Documents

TNS Consumer Trends 2008