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11/23/2018
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VIETNAM MARKET OUTLOOK & TRENDS SHAPING THE FUTURE
Prepared for Annual Conference on Commerce 2017 – UEH
Presented by Huynh Bich Tran – Associate Director, Nielsen Retail Measurement Service
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AGENDA
1
2
3
4
Vietnam Market Outlook
FMCG Landscape
Vietnam Retail Landscape
Consumer Trends Shaping the Future
11/23/2018
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VIETNAM MARKET OUTLOOK
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5
POSITIVE VIETNAM MARKET OUTLOOK TILL 2022
Source: Statista, Vietnam 2012 - 2020
98.2 Mil Population in 2022 with
yearly growth of 1%
USD $3,329GDP per capita in 2022
(~60% growth vs. 2015)
+6.2%GDP growth year on year
till 2022
+4%CPI growth year on year
till 2022
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CONSUMERS ARE MORE CONFIDENT AND WILLING TO SPEND
76
35
33
30
27
26
63
38
36
31
30
29
Savings
Holidays
New clothes
New technologyproducts
Home improvements /decorating
Out of homeentertainment
Q4 2016
Q2 2017
How consumers utilize spare cash after
covering essential living expenses
Source: Consumer Confidence Survey – Q2– 2017
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FMCG LANDSCAPE
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9
WHERE ARE THE FMCG GROWTH OPPORTUNITIES?
Average volume growth Q1 2017 & Q2 2017 vs. YA
Source: Nielsen Quarter by Numbers, Q2’2017
VIETNAM FMCG GROWTH IS BETTER THAN APAC
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VIETNAM RETAIL LANDSCAPE
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1.51 Mil stores | 2016 (1.4 mil in 2015)
>25 outlet types of dissimilar scales & formats
+1.5%
Source: Nielsen Census 2013-2016 | Vietnam
RIGHT ROUTE TO MARKET CONTINUES A MAJOR SUCCESS DRIVER WITH
OUTLET SEGMENTATION AT ITS HEART…
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4,765Modern Trade stores
in Vietnam (2016)
excluding Mega Market
MT Total Vietnam
Supermarket
Minimart &CVS
571 stores
4,194 stores
WHILE MODERN TRADE KEEPS GROWING IN NUMBERS
Source: Nielsen Retail Establishment Survey 2016; Nielsen Retail Audit Sept’17 data ending
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124
134
170
198
218
248256
103
137
160161 157
62 65
94106
126 130148
130 128 121119
2533
5062
7181
101
3 4 7
Oct
-15
Nov-1
5
Dec-
15
Jan-1
6
Feb-1
6
Mar-
16
Apr-
16
May-1
6
Jun-
16
Jul-16
Aug
-16
Sep-1
6
Oct
-16
Nov-1
6
Dec-
16
Jan-1
7
Feb-1
7
Mar-
17
Apr-
17
May-1
7
Jun-
17
Jul-17
Aug
-17
Sep-1
7
Oct
-17
Circle K
B's Mart
Family Mart
Shop & Go
Mini Stop
7-eleven
CVS IS DRIVING THE GROWTH OF STORE NUMBERS
798 Vinmart +CONVENIENT STORE – No. of store
Source: Retailer’s official website
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98
120126
139
176
61
7681
94
107
134
149
18
89
115
190
221
59 6355
5634 41
1430
45
66
68
13 16
Oct
-15
Nov-
15
Dec-
15
Jan-
16
Feb
-16
Mar-
16
Apr-
16
May-1
6
Jun-1
6
Jul-1
6
Aug
-16
Sep
-16
Oct
-16
Nov-
16
Dec-
16
Jan-
17
Feb
-17
Mar-
17
Apr-
17
May-1
7
Jun-1
7
Jul-1
7
Aug
-17
Sep
-17
Oct
-17
Co.op Food
SatraFoods
Bach Hoa Xanh
Vissan
Zakkamart
Coop Smile
T-Mart
CP Fresh mart
Source: Retailer’s official website
FOOD MINIMART– No. of store
MINI-MART IS ALSO ACCELERATING THE EXPANSIONDriven by Co.op, Satrafoods & Bach Hoa Xanh
• 20 – 200m2
• Urban & Sub-urban residential areas
• Stock 1,500 – 2,000 items
(food, cosmetics & clothes)
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TRADITIONAL GROCERY AND CVS HAVE MORE RECENT SHOPPERS
Source: Nielsen Shopper trends 2016
Personal care stores definition: Stores that sell health, beauty and personal care products like shampoo, skin care, oral care products etc
Where do consumers shop?
Supermarkets
Wet Markets
Traditional Grocery
46
2014
60
83 85
67 64
% Change
(+/-)
-2
-14
+3
19 11 +8
2016
Convenience Stores
Personal Care and
Modern Pharmacies19 9 +10
Market Fragmentation & Concentration
Base: All shoppers n=1500
Ref: Q7a Which of these types of stores have you visited in the past 7 days?
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CONSUMERS TRENDS SHAPING THE FUTURE
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Nguồn: Nielsen database; OECD Development Centre, 2012
VIETNAM DEMOGRAPHY NOW & FUTURE
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FIVE SILVER LININGS
SMART SPENDING AUTHENTICITYCONSUMERS
WANT PREMIUM
AND PRESTIGE.
THE RISE OF
WELLNESS
CONNECTED SPENDERS
1 42 3 5
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Copyright © 2017 The Nielsen Company. Confidential and proprietary.
CONSUMERS WANT PREMIUM
AND PRESTIGE.
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AS NEW MIDDLE CLASS URBANISE, THEY SEEK TO EXPERIENCE
PREMIUM BRANDS
NEW EXPERIENCES,
NEW OFFERINGS
“I can’t afford the
premium brands”
FAMILIAR
BRANDS
“I want to reward
myself”
PREMIUM
BRANDS
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Copyright © 2017 The Nielsen Company. Confidential and proprietary.
SMART SPENDING
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RISE OF A NEW NORMAL…
EFFECTS OF DOWNTURN SAVING INTENTION
COMPARISION
SHOPPINGSHARED CONSUMPTION
SAVING-SHOPPING
CULTURE
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SHOPPING-SAVING CULTURE: HIGHER INVOLVEMENT IN
PLANNING & BROWSING THE BEST DEALSAccording to Nielsen Shopper Trend Report 2016, shopping attitudes of Vietnamese consumers are…
82%I usually plan what I want to buy before I
shop for groceries
84%
+8%
I take advantage of a special offer or deal
for my everyday grocery items
Source: Nielsen Shopper Trend Report 2016
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28Copyright © 2017 The Nielsen Company. Confidential and proprietary.
AUTHENTICITY
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INDEED, BRAND ORIGIN IS IN FACT MORE IMPORTANT THAN
CHOICE, PRICE, FUNCTION AND QUALITY
80% – 90%of Vietnamese respondents, say brand origin is as important as or more
important than nine other purchasing drivers
QUALITY – PRODUCT FUNCTIONS – TASTE - BUYING FOR PERSONAL
REWARD – PACKAGING – PROMOTIONS – SELECTION - PRICE
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Copyright © 2017 The Nielsen Company. Confidential and proprietary.
THE RISE OF WELLNESS
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HEALTH AND PARENTS’ WELLFARE ARE TOP 5 CONCERNS
FROM CONSUMER
Trend of Increasing bills
42%
32%
32%
34%
HEALTH
20%
21%
8%
8%
PARENTS’ WELLFARE AND
HAPPINESS
Q4/2016 Q3/2016 Q2/2016 Q1/2016
Source: Nielsen Global Survey of Consumer Confidence & Spending Intentions, Q4 2016
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LESS IS MORE + GUILT FREE
66% V I E T N A M E S E
R E S P O N D E N T S W A N T
M O R E A L L - N A T U R A L
P R O D U C T S
NO ARTIFICIAL COLORS
LOW FAT/FAT FREE
NO ARTIFICIAL FLAVORS
LOW SUGAR/SUGAR FREE
ORGANIC
GMO FREE
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1,204,380
735,040 671,280 511,280 … 436,240 417,520
254,000
EVERYTHING CORRELATES TO “ORGANIC”,
“DETOX” & “HOMEMADE” Organic food/beauty products and homemade food top the list of the most prominent topics being discussed on social
medias
Source: Forums, FACEBOOK, Instagram, Youtube and News. Time period: 01/04 - 30/04/2017
Số liệu từ SocialHeat – Younet Media - Hệ thống Social Listening & Market Intelligence duy nhất tại Việt Nam có khả năng thu thập và phân tích thông tin theo thời gian thực, một cách tự động, bao phủ hơn 90% các nguồn tin tức và thảo luận từ các mạng xã hội.
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Copyright © 2017 The Nielsen Company. Confidential and proprietary.
GROWING CONNECTED SPENDERS
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WHO ARE THEY?
Conventional approach:
MIDDLE
CLASS
Earn $10-
20/day
Overlooks consumer
engagement, access
Modern approach:
CONNECTED
SPENDERS
Have
internet access and
use the internet to
research purchases
and to shop
Digitally-savvy and
willing to spend
discretionary
income
Prefer premium
products and on the
cutting edge of
consumer trends
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THE RISE OF VIETNAMESE CONNECTED SPENDERS
2017
23 MILLION PEOPLE
ANNUAL SPENDING
$50 BILLION
38% OF TOTAL
CONSUMER SPENDING
2025
40 MILLION PEOPLE
ANNUAL SPENDING $99
BILLION
48% OF TOTAL
CONSUMER SPENDING
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THE ‘CONNECTION BEHAVIOR’ MAKE THIS NEW CUSTOMERS MORE
CONFIDENT AND PROACTIVE IN THEIR WAY OF LIVING
Source: Demand Institute & Nielsen, Connected Spenders Report, 2017; Mobile Ecosystem (2016) & The Omni-Channel Shoppers
PROACTIVE IN SPENDING IN
PRODUCTS AND SERVICESREADY TO CONNECT
Connected
Spenders in
Vietnam
Normal Internet
users
CONFIDENCE
INDEX99 117
MORE CONFIDENT
85%
67%
66%
Access emails
Read digital
books/newspapers
Watch YouTube
85%
Consumption share of disposal income
57%
Take advantage of special offer or
promotion when shopping
61%
Search for information before buying
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Model of Consumer Behavior
Source: Philip Kotler & Gary Amstrong, 2014
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Source: Philip Kotler & Gary Amstrong, 2014
Factors influencing consumer behavior
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Consumer buying process
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Consumer behavior process
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Consumer behavior process
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Consumer behavior process
