Post on 31-Dec-2020
transcript
Vietnam Consumer Trends & Growth
Opportunities & 2019 Predictions
Prepared by:
Ralf Matthaes - Managing Director
ECONOMICS
IFM CONSUMER CONFIDENCE INDEX
7968
5651
8292
8692 91
2011 2012 2013 2014 2015 2016 2017 2018 2019
9 years of moving up the food chain. Confidence is High, paving the way for a positive 2019
Base: N = over 20,000 Interviews since 2011N = 2,365 in 2019
55%
85%
67%
27%
11%
18%
40%
18%
4%
15%
18%
2017
2019
2017
2019
BETTER SAME WORSE
MY VIEW OF THE ECONOMY IN 2017 VS 2019
Base: 5,835 ConsumersBase: N =75 Business Leaders
Business community
Consumers
Consumers are much more upbeat about the overall economy for 2019, than in 2017, while the business community is more skeptical, meaning down turn is on the horizon.
42%
MAJOR CONCERNS FOR 2019
10%
53%
7%
14%
11%
33%
18%
18%
58%
40%
35%
27%
23%
10%
18%
8%
Global economic down turn
Environmental pollution
Lack of infrastructure development
Lack of business / Public institution transparency
Increase of Public Debt
Increased Inflation
Vietnam economic slow down
Increases Interest / Lending rates Consumers
VN Business community
Global economic down turn and pollution, infrastructure development and increased inflation are keeping people awake at night.
Base: 5,835 Consumers / N=75 Business Leaders
Top 2 responses
VN business community much less optimistic based on fears of global economic downturn
BOOM SECTORS
TET SPEND 2019 VS 2018
Base: 2,365
2019 Sector 2014 Plus / Minus1 Education 1 same2 Healthcare 2 same3 Personal care 9 + + + 4 Food & beverages 3 same5 Entertainment / dining out 11 + + + 6 Communications 5 same 7 Home appliances 10 + + 8 Electronic equipment 7 same9 House hold care 4 minus
10 Transportation 8 minus 11 Household utilities 6 minus
2019 vs 2014 SPENDING PRIORITIES
Most spending priorities have not changed over the years. However, self pampering, enjoyment purchase / activities, such as personal Care, entertainment and purchasing convenience such as home appliances are on the rise…
Tet 2019 should be positive in terms of consumer spend, reflecting consumer sentiment towards 2019
65% 28% 7%
More Same Less
DID YOU TAKE OUT A LOAN IN LAST 12 MONTHS?
52
41
29
48
59
71
2018
2017
2015yes no
Base: 2,365
6%10%
30%32%
42%
9%14%
25%
35%
57%
Automobile Education Real Estate Business Personal
2016
2018
Purpose for Loan
Source of Loan: Half from Banks / Half from friends / relatives
Personal debt continues to grow, as the good times roll. Caution - any economic down turn could be fatal for some, while reasons for loan are more and more about personal fulfillment, than investments.
Mega Trends
POPULATION
VIETNAM IS NO LONGER …. RURAL OR LOW INCOME
Vietnam is experiencing significant population shifts from rural to urban, and from
poor to middle income class.
18
29
40
82
61
60
1996
2016
2026
Urbanization
Urban Rural
82
50
35
14
40
45
3
10
20
1996
2016
2026
Middle income
Low Mid High
FROM BABY BOOMERS TO TECH MILLENNIALS
Those aged 40 plus belong to a bygone era and are very traditional , whilst your 40 below were
raised post war and famine and are more similar to millennials
35% born before US War (40 +) The “Lean” Generation
65% Born after War (0-39) “Doi Moi “ Generation
OTHER POPULATION TRENDS
▪ Smaller family sizes – from 4.2 ten years ago to 3.8 today in HCMC / Hanoi
▪ From 3 generational to 2 generational. But only for starter families
INFRASTRUCTURE
LOCATION, LOCATION, LOCATION
▪ Vietnam’s urban infrastructure is bursting at the seems, creating new opportunities, but reducing productivity, while increasing cost
▪ Cost of real estate is a major Achilles heel to Vietnam
200,000 new cars on the
roads every year
& new drivers!
ASPIRATIONS
28%19% 19% 16% 11%
5%
32%26%
17% 14%5% 3%
House New Car Overseasvacation
Set up my ownbusiness
Apartment Study overseas
Aspirations
urban rural
IFM Rural Reach : n = 649
The Ideal Family consumer Journey
Education – Experience - Good job – Marriage - Security Promotion – Kids – House – Car – Travel – Experience
English
International
Overseas
EDUCATIONTrend is towards…
from VN to international brands
BRAND SHIFTWhy?
▪ Safety & Hygiene▪ Value for money
35 million users in Vietnam
Youtube Vietnam has become (#1 in APAC) 5th largest market globally
TOP SOCIAL PLATFORMS %
29
25
FB MESSENGER
ZALO
GOOGLE +
SKYPE
VIBER
SOCIAL MESSENGER
57% plus spend more than 4 hours a day on their smartphones
All things smart, convenient and communication related
DIGITAL CONVERGENCE
Urban vs Rural
▪ Return of urbanites to their hometowns.
URBAN VS RURAL
11
30
31
59
44
10
15
2
Urban
Rural
MONTHLY HOUSEHOLD INCOME
below 10 M 10-12M 20-40M 40 M +
Urban vs Rural Incomes
IFMPANEL : n = 61,137
Still significant difference in incomes between Urban & Rural – hence the draw to urban life
IFM Consumer Index n = 3,134
Where we live
Three quarters live in their own homes, and rent far less than their urban cousins
1 3
1218
6
73
2 513
30
12
55
A vacationhouse
A secondapartment for
rent
A second housefor rent
I live in rentedproperty
I live in my ownapartment
I live in my ownfamily house
Rural Urban
IFMPANEL : n = 61,137
What devices we own
99%93%
85% 81%
66%54%
63%
24%
99%
83%77%
66% 66%
53%42%
18%
Smartphone HomeInternet
connection
Laptop Internetphone
connection
Smart TV PC Tablet Smart watch
Urban Rural
Rurals are slightly behind their urban cousins in terms of ownership
IFMPANEL : n = 61,137
Retailers used most often
25% 32%18%
7% 5% 5%
78%
14%3% 0% 0% 3%
Coopmart Big C VinMart AEON Lotte Mart Metro
urban rural
2
3
20
21
31
17
21
16
26
42
URBAN
RURAL
Weekly Wet Market Visits0 1 to 2 3 to 4 5 to 6 7 or more
IFMPANEL : n = 61,137
Due to the lack of development of Modern trade, a huge discrepancy exists in terms of where Rurals shop, dominated by traditional trade and wet markets, opening the door for E-commerce
RETAIL - THE NEW RURAL
BATTLEGROUND
On-line purchase behavior
Still lots of room for On-line marketplace growth, especially in rural
69.6%
77.9%
27.7%
21.7%
2.8%
1.4%
Rural
Urban
On-line Purchase Frequency
LAST MONTH
LAST MONTH
IFM Rural Reach : n = 649
2-12 MONTHS AGO
2-12 MONTHS AGO
NEVER
NEVER
Rural migration into the cities
10% 14% 11% 54% 11%
No never Probably not Do not know Possibly Definitely
11% will definitely move to the Big cities, while half note possibly migrating to the big smog
IFM Rural Reach : n = 649
VIETNAM RETAIL TRENDS
VIETNAM MARKET RETAIL SIZE & GROWTH 2008 – 2018
8.9
4.33.9
9.5
7.8
66.5
1
2008 2010 2012 2014 2016 2017 2018
EST. RETAIL SPEND 2016
=US $ 100 Billion
Fastest growing retail market in Asia
FMCG VALUE & VOLUME GROWTH %
FMCG growth in Urban Vietnam is non existent, save for Rural Vietnam at
5.5% Value and 3.2% Volume growth. Note: 1st time in 25 years Zero Urban
Growth
9.55
3.772.74
5.2
6.7
2.4
4.86
1.21.78
2.36 2.3
-0.12013 2014 2015 2016 2017 2018
Value % Volume %
Note: Jan. 1, 2018 – November 30, 2018, 4 key cities
MODERN TRADE DILEMMA
Modern Vs Traditional Trade Value Growth %
73%
22%
5%
General Trade Modern Trade
On-line
Retail Market Sales
19
2
4.3
14.215
4.2 4.9
3.8
2012 2014 2016 2017
Modern General
Modern trade is beginning to grow again, but will heavily be impacted by On-line competition, which will erode MT.
4%
22%
74%
On-line
ModernTrade
GeneralTrade
Most popular future shopping method
PRESENT RETAIL MARKET SPLIT & FUTURE PROJECTIONS
17%
25% 27%31%
Other Smartphone On-line Modern
Present Market share
If you are not on-line - you are not relevant!
Source: IFM Market Place: Base1,623
Average 33% growth with anticipated US $10 Billion value by 2020
1
ON-LINE GROWTH / PROJECTED VALUE (US BILLION)
30%35% 37%
2012 2013 2015
YoY Ecommerce Market growth
2.5 3.004.32 5.18
7.41
10
2012 2013 2015 2016 2017 2020
Annual Ecommerce Market Size US Billion
Note: Figures below are highly overstated. IFM
survey indicated 2017 at just over US $3 Billion
88%81%
76%
61%55%
24%
5%
83%
65% 62%44% 37% 9%
80% 83%73%
41% 46%
5%4%
Retail (clothes,shoes, etc.)
Beauty products Healthcareproducts
Electronics Books Vehicles/Motorcycles
Others
Ever purchased at stores
Purchased at stores in P3M
Purchased online in P3M
ON-LINE VS OFF-LINE CATEGORIES PENETRATION
Some on-line categories in Urban already out sell off-line
Source: IFM Market Place: Base1,623
MEDIA TRENDS
HEADING
Vietnam Media Spend Share & Growth
331
1177 1295
0.6
200300
113
86
84
2008 2017 2018
TV
Internet
Print / Newspaper
outdoor
Media spend has sky rocketed in the past 10 years, driven by TV @ 10% growth. However, Digital growth at 32% plus YoY and gaining speed.
Source: Zenith / Group M
HEADING
% Total Media Consumption in Vietnam
51
62
43
27
16Urban
Rural
TV Internet Others
Source: Kantar Worldpanel Media Survey 2018
11
TV is still King, But digital is catching up quickly
The marketing disconnect of the decade!!!
HEADING
Disconnect between viewership and spend
51%
75%
43%
17%
16%Media Consumption
Media Spend
TV Internet Others
Source: IFM analysis
8%
10% 33% 5%
Though digital consumption is booming at 30% plus per year, ad spend represents only 17% of total spend, thus creating a chasm between CONSUMPTION & SPEND
Growth rate
WHY?▪We are creatures of habit and DO NOT LIKE CHANGE
▪Most decision makers are older and DO NOT UNDERSTAND DIGITAL
▪Some categories work better on TV – Products geared to THEGREY GENRATATION
▪Digital R.o.I. has been historically HARD TO MEASURE
GENERAL SEARCH QUERIES
WORLD CUP SCHEDULE
KENH 14 SOUTHERN LOTTERY
TOP IMAGE SEARCH QUERIES
BUI THIEN DUNG VIETNAM FLAG
U23 FOOTBALL BALENCIAGA FASHION HOUSE
2018 WORLD CUP MESSI - FOOTBALLER
1. Solution: Understand Vietnamese interests – on-line
TOP YOUTUBE SEARCH QUERIES
Chay Ngay Di – Music Videos Nhanh Nhu Chop – TV Show Bua Yeu – Music Videos
Nguoi La oi - Music Videos Nguoi Am Phu – Music Videos U23 Vietnam - Football
Co gai M52 - Music Videos Giai Dieu Chung Doi – TV show 7 Nu Suoi Xuan – music Video
Source: Google Trends
2. Solution: Understand the facts – Media penetration
11%
27%
40%
70%85%
43%
54%6…
69%73%
15%
36%
55%
2011 2013 2015 2017 2018 Est
Smartphone
Non smartphone Internet
Total ad Spend on Mobile %
Source: Ministry of Information & Technology, Nielsen, Infocus Mekong Research
Usage / Ownership Age 15 Plus
51 Million smartphones, representing 85% of the 15 plus aged population
85%Smartphone penetration
5%7%
14%28%28%30%29%
57%
83%
52%
85%
49%
58%
69%
71%
42%
11%
40%
2%
23%
13%
1%
1%
1%
Watch TV
Tablet
Youtube
PC
Laptop
Search internet
Smartphone
Daily time spent on… Over 4 hours Less than 2h do not use
3. Solution: Understand Media time consumption
Smartphone is the King of connectivity in Vietnam
IFM Rural Reach : n = 649
4. Solution: Understand which social media platforms work best
0
10
20
30
40
50
60
Source: Global webindex survey
Key Social MediaPlatforms
Key MessengerPlatforms
HEADING
5. Solution: Know the changing trends
Present entertainment activities & future decline
22%
53%61%
15%
38%48%
15%
69%75%
11%
47%57%
Watch TV cable FTA Watch you Tube Surf the internet…
Urban Now Urban Future Rural Now Rural Future
Many a net citizen is now saturated and noting a decline in their future digital footprint, with all main digital entertainment options showing a decline in growth
IFM Rural Reach : n = 649
IFM MIAOZHEN ESTABLISHMENT SURVEY (FACE TO FACE) = N = 3,140
3.1%8.0%
15.4%10.6%
50%
4%
13%
19% 17%
50%
2.1% 3.1% 3.1%
10.7%
35%
3%7% 6%
14%
39%
What’s app Instagram Viber Face time Smartphone
URBAN Now Urban future Rural now Rural future
Growing Communications forums
Face time, Viber and Instagram are taking root. However, new entrants could make a major impact as well
IFM Rural Reach : n = 649
IFM MIAOZHEN ESTABLISHMENT SURVEY (FACE TO FACE) = N = 3,140
FREE & VISUAL
91%
73%
94%84%
75%
49%
94%
78%
Smartphones Desktop/laptop
Urban 2016 Urban 2018
Rural 2016 Rural 2018
Facebook access by device
Facebook, smartphone access rules and rural has caught up quickly…
IFM Rural Reach : n = 649
6. Solution: Marry audience with category and preferred media channels
IDENTIFY YOUR TARGET AUDIENCE
IDENTIFY PREFERRED MEDIA CHANNELS FOR
YOUR AUDIENCE
IDENTIFY PREFERRED MEDIA CHANNEL FOR
YOUR CATEGORY
Critical to understand how consumer prefer / trust specific media channels for specific products
”The trouble with our times is that the future is not what it used to be.”
Paul Valery
PREDICTIONS
Consumer psychology - 2019
Consumer priorities More about personal growth
than material growth
2019 will see a shift in consumerism from “keeping up with the Nguyen’s” to “self actualization” via new experiences. Spend will be less about Material objects and more about life experiences.
The Basics are mostly achieved
2019 Predictions
Positives
1Consumer confidence is still very high, hence driving positive growth in 2019, but there are signs of slowdown beyond this year
2Any service / product providing entertainment, convenience and pleasure will see growth
3 All things digital continue to grow – convenience driven
Negatives
1 Real estate market will begin to slow down in 2019
2 All basic home care / improvements, utilities & transport should decline in growth3 Private dept will continue to grow & be a major threat if inflation goes rampant
4 Potential erosion of Vietnamese brands due to value for money and quality issues
Ralf Matthaes | Managing DirectorTel: +84-8 2262-7627Mobile: +84-903-949-531Website: www.ifmresearch.comifmpanel website: www.ifmpanel.com
Email: Ralf.matthaes@infocusmekong.com4th Floor, 21 Phung Khac Khoan Street, D.1HCMC, Vietnam
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