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Copyright © 2017 The Nielsen Company. Confidential and proprietary. E-COMMERCE IN VIETNAM
Copyright © 2017 The Nielsen Company. Confidential and proprietary.
E-COMMERCE IN VIETNAM
Copyright © 2017 The Nielsen Company. Confidential and proprietary.
VIETNAM –A MARKET OF
OPPORTUNITIES
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VIETNAM REMAINS ONE OF THE FASTEST GROWING IN SOUTHEAST ASIA
GDP GDP GDP GDP Q2’19 Q2’19 Q2’19 Q2’19 growth vs. YAgrowth vs. YAgrowth vs. YAgrowth vs. YA 6.86.86.86.8
4.24.24.24.26.06.06.06.0
1.91.91.91.9
5.15.15.15.13.33.33.33.3
VietnamVietnamVietnamVietnam MalaysiaMalaysiaMalaysiaMalaysia PhilippinePhilippinePhilippinePhilippine SingaporeSingaporeSingaporeSingapore IndonesiaIndonesiaIndonesiaIndonesia ThailandThailandThailandThailand
8.68.68.68.6
0.50.50.50.5
8.18.18.18.1
0.10.10.10.1
2.82.82.82.8
5.85.85.85.8
0.00.00.00.0
1.01.01.01.0
2.02.02.02.0
3.03.03.03.0
4.04.04.04.0
5.05.05.05.0
6.06.06.06.0
7.07.07.07.0
8.08.08.08.0
9.09.09.09.0
10.010.010.010.0
VietnamVietnamVietnamVietnam MalaysiaMalaysiaMalaysiaMalaysia PhilippinePhilippinePhilippinePhilippine SingaporeSingaporeSingaporeSingapore IndonesiaIndonesiaIndonesiaIndonesia ThailandThailandThailandThailand
FMCG MAT FMCG MAT FMCG MAT FMCG MAT Q2’19 Q2’19 Q2’19 Q2’19 growth vs. YAgrowth vs. YAgrowth vs. YAgrowth vs. YA
VietnamVietnamVietnamVietnam MalaysiaMalaysiaMalaysiaMalaysia IndonesiaIndonesiaIndonesiaIndonesia ThailandThailandThailandThailandSingaporeSingaporeSingaporeSingapore
123123123123 110110110110130130130130
92929292126126126126
105105105105
0000
20202020
40404040
60606060
80808080
100100100100
120120120120
140140140140
VietnamVietnamVietnamVietnam MalaysiaMalaysiaMalaysiaMalaysia SingaporeSingaporeSingaporeSingapore IndonesiaIndonesiaIndonesiaIndonesia ThailandThailandThailandThailand
Consumer Confidence Consumer Confidence Consumer Confidence Consumer Confidence
IndexIndexIndexIndex
• Source: GSO Vietnam. Economist Intelligence Unit. Nielsen Quarter by number report Q2’19
PhilippinePhilippinePhilippinePhilippine
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CONSUMERS ARE STILL ASSURED. CONSUMERS ARE STILL ASSURED. CONSUMERS ARE STILL ASSURED. CONSUMERS ARE STILL ASSURED.
HOWEVER, WITNESS CUTHOWEVER, WITNESS CUTHOWEVER, WITNESS CUTHOWEVER, WITNESS CUT----BACKS & PRICE CONCERNSBACKS & PRICE CONCERNSBACKS & PRICE CONCERNSBACKS & PRICE CONCERNS
% Respondents say they will spend on this item after necessities
CONSUMER CONFIDENCE CONSUMER CONFIDENCE CONSUMER CONFIDENCE CONSUMER CONFIDENCE INDEX*INDEX*INDEX*INDEX*
112112112112120120120120114114114114
129129129129117117117117 122122122122117117117117
129129129129117117117117 123123123123
Asia PacificAsia PacificAsia PacificAsia Pacific VietnamVietnamVietnamVietnam
2018-Q22018-Q22018-Q22018-Q2
2018-Q32018-Q32018-Q32018-Q3
2018-Q42018-Q42018-Q42018-Q4
2019-Q12019-Q12019-Q12019-Q1
2019-Q22019-Q22019-Q22019-Q2
6363636366666666
72727272 7373737370707070
72727272
7878787875757575
69696969
36363636
44444444
4949494951515151
46464646
53535353 5353535355555555
46464646
38383838
44444444 4444444446464646
49494949 4848484850505050
53535353
48484848
31313131
44444444
40404040
46464646 46464646 47474747
43434343
47474747
39393939
29292929
3838383841414141
43434343 4343434346464646
4848484846464646
40404040
30303030
37373737
42424242 42424242
38383838
48484848
39393939
47474747
39393939
Q2'17Q2'17Q2'17Q2'17 Q3'17Q3'17Q3'17Q3'17 Q4'17Q4'17Q4'17Q4'17 Q1'18Q1'18Q1'18Q1'18 Q2'18Q2'18Q2'18Q2'18 Q3'18Q3'18Q3'18Q3'18 Q4'18Q4'18Q4'18Q4'18 Q1'19Q1'19Q1'19Q1'19 Q2'19Q2'19Q2'19Q2'19
SavingsSavingsSavingsSavings
New clothesNew clothesNew clothesNew clothes
Holidays/vacationsHolidays/vacationsHolidays/vacationsHolidays/vacations
New technology productsNew technology productsNew technology productsNew technology products
OOH entertainmentOOH entertainmentOOH entertainmentOOH entertainment
Home improvementsHome improvementsHome improvementsHome improvements
VIETNAMESE TOP SPENDING AFTER NECESSITYVIETNAMESE TOP SPENDING AFTER NECESSITYVIETNAMESE TOP SPENDING AFTER NECESSITYVIETNAMESE TOP SPENDING AFTER NECESSITY
TOP VIETNAMESE INCREASING CONCERNSTOP VIETNAMESE INCREASING CONCERNSTOP VIETNAMESE INCREASING CONCERNSTOP VIETNAMESE INCREASING CONCERNS
HEALTHHEALTHHEALTHHEALTHCHILDREN CHILDREN CHILDREN CHILDREN
EDUCATIONEDUCATIONEDUCATIONEDUCATIONINCREASING BILLSINCREASING BILLSINCREASING BILLSINCREASING BILLS
44%44%44%44%(+2pts vs. Q2’18)(+2pts vs. Q2’18)(+2pts vs. Q2’18)(+2pts vs. Q2’18)
13%13%13%13%(+1pts vs. Q2’18)(+1pts vs. Q2’18)(+1pts vs. Q2’18)(+1pts vs. Q2’18)
9999%%%%(+2pts vs. Q2’18)(+2pts vs. Q2’18)(+2pts vs. Q2’18)(+2pts vs. Q2’18)
ELECTRICITY PRICE INCREASEELECTRICITY PRICE INCREASEELECTRICITY PRICE INCREASEELECTRICITY PRICE INCREASE
Electricity price uplifted 8.368.368.368.36%%%%
in Mar’19 after 2 years of stability
% Respondents say these are there top 2 biggest concerns
Consumer Confidence Index: Perceptions of local job prospects, Perceptions of state of personal finances over the next 12 months, Perceptions of good/bad time for people to buy the things they want and need over the next 12 months. Source: Nielsen
Global Survey Consumer Confidence Section
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2015
7%
7%
GEN Z(15-19 y.o)
MILLENNIALS(20-49 y.o)
SHARE OF POPULATION
48%
43%
14%
18%
2025
BABY BOOMER(50-64 y.o)
VIETNAM HAS A YOUNG POPULATION WITH MILLENNIALS DOMINANT & GEN Z ARE CONSUMERS OF FUTURE
• Seek for greater convenience• More going out• Open to new things• Go premium but value for money
• Super connected with synergy between Online & Offline activities
• Care about society issues (social responsibility, gender equality, LGBTQ)
• Strong POV & KOL influence
• Seek for delivery services• Willing to try Health supplement
products
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FAST CHANGING PACE OF MODERN “CASH-RICH TIME-POOR” LIFESTYLE LEADING TO THE BOOMING OF CONVENIENCE SOLUTIONS
VIETNAMESE ARE LIVING IN VIETNAMESE ARE LIVING IN VIETNAMESE ARE LIVING IN VIETNAMESE ARE LIVING IN
SMALLER YET RICHER HOUSEHOLD SMALLER YET RICHER HOUSEHOLD SMALLER YET RICHER HOUSEHOLD SMALLER YET RICHER HOUSEHOLD
THEY ARE ALSO LOOKING FOR & THEY ARE ALSO LOOKING FOR & THEY ARE ALSO LOOKING FOR & THEY ARE ALSO LOOKING FOR &
WILLING TO SPEND ON WILLING TO SPEND ON WILLING TO SPEND ON WILLING TO SPEND ON
CONVENIENCE PRODUCTSCONVENIENCE PRODUCTSCONVENIENCE PRODUCTSCONVENIENCE PRODUCTS
� Vietnam average household size & wage Vietnam average household size & wage Vietnam average household size & wage Vietnam average household size & wage
4.594.13
3.78 3.60 3.50
0
50
100
150
200
250
300
0.00
1.00
2.00
3.00
4.00
5.00
2000
2005
2010
2015
Est. 2020
Household size('person)
Wage per month('USD)
Source: EIU. CEICDATA.com. International Labor Organization est. for 2025
BUSIER WORKBUSIER WORKBUSIER WORKBUSIER WORK
LongerLongerLongerLonger working hours with more pressure 5.1 more pressure 5.1 more pressure 5.1 more pressure 5.1
hours/week ~ 9 hours9 hours9 hours9 hours/day
EVOLVING WOMAN’S ROLEEVOLVING WOMAN’S ROLEEVOLVING WOMAN’S ROLEEVOLVING WOMAN’S ROLE
79.6% 79.6% 79.6% 79.6% - FemaleFemaleFemaleFemale labor force participation rate. Highestparticipation rate. Highestparticipation rate. Highestparticipation rate. Highest in
APAC (average of 50.1%)
Source: Nielsen shopper trend 2017-2018
56%56%56%56%“Anything that saves me time is worth
paying extra for”
7,968| 7,968| 7,968| 7,968| +14% +14% +14% +14% vs YA
MTMTMTMT
Top 2 important attributes for shopping in
Supermarket/ CVS/ Mini-mart
# of stores # of stores # of stores # of stores –––– Mar’19 Mar’19 Mar’19 Mar’19
SUPERMARKETSUPERMARKETSUPERMARKETSUPERMARKET CVS/ MINICVS/ MINICVS/ MINICVS/ MINI----MARTMARTMARTMART
Convenient to get to
Easy to find what I need
Convenient to get to
Always available in stock
Copyright © 2017 The Nielsen Company. Confidential and proprietary.
THE RISE OF THE RISE OF THE RISE OF THE RISE OF NEW NEW NEW NEW
CHANNELSCHANNELSCHANNELSCHANNELS
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Source: Nielsen Retail Measurement, Nielsen Universe Update, * including independent stores, ** including Health & Beauty store MAT : Moving Annual Total, FMCG includes 37 categories without Cigarette
~ 1.5 MIL STORES (+0.2% vs. YA)
Market Stall 65,248
ON Premise 675,469
OFF Premise 811,032
MODERN TRADETRADITIONAL TRADE
5% 19%
Value % contribution – Total Vietnam OFF+ON Premises in
MAT Jul’19
Growth % vs. YA
MODERN TRADE IS BOOMING RAPIDLY ACROSS STORE TYPES & DRIVING THE GROWTH OF FMCG
Updated: Universe Update H1’18
Hyper/ Supermarket* 717
Minimart & Food Store* 5,301
Convenience Store 889
Modern Drug Store** 434
Mom & Kid Store 627
7,968 STORES (+14% vs Oct’18)
Updated: Jul’19
87% 13%
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Wet Markets Traditional
Grocery
Supermarkets Department
Store
Health &
Beauty
Drugstore
Convenience
Stores
Minimarts
PENETRATION 86 81 97 14 32 46 51
FREQUENCY 18.7 7.0 2.3 0.7 1.2 4.2 3.7
36 7 45 0 1 3 2
Base: 2018 (n=1500), 2019 (n=1702)
Ref: Q7a Which of these types of stores have you visited in the past 7 days?
Ref: Q8 On average, how often would you shop at the following type of store?
Ref: Q7d Which of these types of stores would be the one where you normally buy most of your food and grocery items?
SPEND MOST AT
SMALL FORMAT CONTINUES GAINING IN “PENETRATION”, “FREQUENCY” AND “MOST SPENDING”
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This artwork was created using Nielsen data.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
EEEE----
COMMERCECOMMERCECOMMERCECOMMERCE
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APAC 51%
Japan 94%
APAC 86%
Hong Kong 95%
APAC 7H 34M
Thailand 9H 38M
Myanmar 29% Phillippines 58 % South Korea 5H 04MHighest in APAC
Vietnam 58% Vietnam 94 % Vietnam 6H 52M
INTERNET PENETRATION
4,021 4,021 4,021 4,021 BILLION
CONNECTED PEOPLE
53%
FREQUENCY OF INTERNET USE
85%
DAILYTIME SPENT
6H 33M 6H 33M 6H 33M 6H 33M DAILY TIME
SPENT ONLINE
DAILY
6.5H
3,418 3,418 3,418 3,418 BILLION
CONNECTED PEOPLE
Source: Internet Penetration: Demand Institute | Mobile Internet Penetration, Frequency and Daily Time Spent: We Are Social & Hootsuite, Digital in 2018
HIGH INTERNET PENETRATION FUEL THE GROWTH OF ONLINE PURCHASE IN VIETNAM
Lowest in APAC
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INFRASTRUCTURE & DEVELOPMENT RATE OFE-COMMERCE IN VIETNAM TO 2020 REACHING $10 BILLION MARKET VALUE
2018201820182018 2020202020202020
8.1 billion8.1 billion8.1 billion8.1 billion
USDUSDUSDUSD
8.1 billion8.1 billion8.1 billion8.1 billion
USDUSDUSDUSD
10 billion10 billion10 billion10 billion
USDUSDUSDUSD
10 billion10 billion10 billion10 billion
USDUSDUSDUSD
$250/ person$250/
person30%/ year30%/ year $350/
person$350/
person20%/ year20%/ year
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E-COMMERCE SIZE & EVOLUTIONIn 2018, US$2.901 Billion globally (12.0% of Total Retail Sales)
Source: eMarketer | Worldwide Retail e-commerce Sales by Region | 2018 – All categories | Hootsuite 2018
AFRICA &
MIDDLE EAST
SALES 2.2%
GROWTH +22.6%
ASIA-PACIFIC
SALES 18.3%
GROWTH +30.3%
WEST
EUROPE
SALES 9.6%
GROWTH +11.6%
LATIN AMERICA
SALES 2.7%
GROWTH +17.9%
NORTH AMERICA
SALES 9.9%
GROWTH +16.5%
CENTRAL &
EAST EUROPE
SALES 5.2%
GROWTH +20.6%
VIETNAM
SALES <1%
GROWTH +30%
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FMCG ONLINE TO GROW ~4X FASTER THAN FMCG OFFLINE & GDP
* Nielsen forecasts based on 34 countries
** CAGR: Compound Annual Growth Rate
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ONLINE SALESLegend: OFFLINE SALES
Skin Care, China
35%
68%
Diapers, South Korea Cosmetics & Fragrances, UK
20%
14%
OTC, Germany
16%
Pet Food, Sweden
ONLINE IS ALREADY A DOMINANT CHANNEL IN
SOME MARKETS
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WHAT PEOPLE BUY ONLINE THESE DAYS - VN & APAC
Source: Nielsen Global Commerce Study 2018
% of consumers who have purchased the following categories online (penetration)
69%
51% 53% 55%
47%
40%44%
70%
26%
49%
61% 45% 40% 38% 36% 34% 31% 29% 24% 23%
Fashion Beauty &Personal care
Books & Music IT & Mobile ConsumerElectronics
Household care Packagedgrocery food
Travel Children &baby products
Event Tickets
APAC VIETNAM
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PROMOTION IS KEY TRAFFIC DRIVING FACTOR FOR MOST E-RETAILERS
SENDO SALE DAY 7.7 SHOPEE SALE DAY 9.9 TIKI MUSIC SPONSORSHIP
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Products may have a problem when
delivered
Products may have a problem when
delivered
Some websites are not easy to
process
Some websites are not easy to
process
Not familiar with online shoppingNot familiar with online shopping
Do not have a credit card
Do not have a credit card
Actual product is not the same as
website
Actual product is not the same as
website
DO NOT TRUST online shoppingDO NOT TRUST online shopping
“Inconvenience”“Inconvenience”
“I want to see products in reality
before purchasing”.
“I want to see products in reality
before purchasing”.
Afraid of FRAUD Afraid of FRAUD
Source: The Nielsen Vietnam Omni-Shopper Trend Report 2018
PRODUCT QUALITY AND SERVICE
ACCESSIBILITY EXPERIENCE
“The real stores are not far from
where I live”
“The real stores are not far from
where I live”
TRUST
VIETNAM E-COMMERCE BARRIERS
Copyright © 2017 The Nielsen Company. Confidential and proprietary.
ENABLE ENABLE ENABLE ENABLE YOUR SUCCESS IN VIETNAM YOUR SUCCESS IN VIETNAM YOUR SUCCESS IN VIETNAM YOUR SUCCESS IN VIETNAM
MARKET POTENTIAL
• Vietnam holds promising growth
in both GDP & FMCG
• Consumers are young, optimistic,
and seeking convenience
solutions
MARKET
LANDSCAPE
• Traditional Trade is still key
channel with 1.5M stores,
contributing to 87% of FMCG
• Modern Trade is booming with
store expansion and higher
consumer penetration
E-COMMERCE
• Vietnam has strong foundation for E-commerce to take off with high
internet and smartphone penetration
• Still humble, ~1% FMCG, growing 30+%
• Have much white space for across categories,
• Very promotional driven
• Need to overcome trust issue for sustainable growth
