2Source: GSO Vietnam
FAST-MOVING CONSUMER GOODS (FMCGS)
OR CONSUMER PACKAGED GOODS (CPGS) ARE
PRODUCTS THAT ARE SOLD QUICKLY AND (GENERALLY)
AT A RELATIVELY LOW COST.
3
KEY ECONOMIC INDICATORS : VIETNAM LOOKING GOOD
FOR GROWTH
Q1 2017 vs. YA
Source: GSO Vietnam
CPI
4.09
0.63
2.663.53 3.54
GDP
5.98
6.68
6.21
6.817.08
Retail Sales of Consumer Goods
11.39.5 10.2 10.9
12.4
4
HOWEVER FMCG GROWTH HAS SLOWED MORE RECENTLY
Urban
4 Cities
Rural
Value Growth% Volume Growth%
*: To calculate FMCG price paid change, we calculate how much price contributes to the value change for each category, sum up
these contributions and relate to value YA
**: To calculate FMCG volume change, we calculate how much volume contributes to the value change for each category, sum up
these contributions and relate to value YA (this results in an average category change in volume)
Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam |
Total FMCG excluding Gift
10.58.28.6 7.3
2.7 1.24.5
1.26.4
4.1
3.91.32.6 1.7
4.82.4
5.42.42.3
0.0
2014 2015 2016 2017 2018
5
FAST GROWTHSLOW GROWTH GROWTH H1’18 vs YA
Agriculture
3.9% GDP 7.1%Industry
9.1%
Services
6.9%
HRC
9.6%
Retail
10.7%
FMCG
+0.0%Phones*
9.4%
Big Appliances*
17.1%
Pharmaceuticals*
10.0%
Motorbikes*
4.8%
Consumer
Electronics*
14.7%
Small
Appliances*
8.2%
Tourism
19.5%
Telecom
7.1%
DESPITE THE POSITIVE ECONOMIC ENVIRONMENT, CONSUMERS ARE SPENDING
LESS FOR FMCGS, AND MORE FOR A FOR LIFESTYLE UPGRADATION
Source: Vietnam GSO Social and Economic Situation in H1’18, Vietnam Association of Motorbike Manufacturers FY 2017 (http://vietnamnews.vn/economy/421098/sale-
of-motorcycles-up-in-2017-vamm.html#bwI7WEpraq4DLhJC.97), GfK TEMAX results for Vietnam, FY 2017; http://english.vietnamnet.vn/fms/business/192807/vietnam-
s-pharmaceutical-sector-expected-higher-growth.html; Nielsen RA ending Jun’18;
• FMCG brands need to invest in the right innovations to spur
growth by addressing better the new changing lifestyles
RAPID URBANIZATION AND RISING MIDDLE CLASS
6
(*) Urbanization: increasing the densities of people and production in cities and towns
Source: Vietnam 2035 report – World Bank, Vietnam Ministry of planning Investment
Vietnam’s urbanization(*) was
faster than the global rate.
50% of population will belong to
Global middle class by 2035
• Premiumization trends
• Rising demand for Health & Wellness products and services
FURTHER IMPACTING FMCG CONSUMPTION IS INCREASED AWARENESS OF
FOOD SAFETY AND HEALTH AND WELLNESS
7
The Vietnamese government imposition of a special consumption tax (SCT) for sugary drinks
will be placed on carbonated and non-carbonated soft drinks, energy drinks, sports drinks and
bottled instant coffee and tea. Vietnam's Ministry of Finance (MoF) announced its plans at a
press conference in mid-August 2017 to apply a 10% or 20% tax that will take effect from
2019.
Source: Asia Pacific Journal of Clinical Nutrition – Non-communicable diseases, food and
nutrition in Vietnam from 1975 to 2015: the burden and national response
• Opportunity to develop better-for-me products • Promote good related health functions (i.e. anti pollution)
-0.7%
3.9%0.7%
6.3% 5.8%
-2.6%
1.2%
-1.0%
2.1%4.9%
8
DAIRY AND PACKAGED FOODS STAGNANT
DAIRY BEVERAGES PACKAGED FOODS PERSONAL CARE HOME CARE
7.9% 8.1%
3.9%
9.0%
2.8%6.6%
3.6% 3.7% 4.4%0.8%
URBAN 4 CITIES
RURAL
Value change%
Volume* change%
2018 versus year ago
*: To calculate FMCG volume change, we calculate how much volume contributes to the value change for each category, sum up these contributions and relate to value YA (this results in an average category change in volume)
Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG excluding Gift
Source: Vietnam Retailer Sentiment Q2’16
FOOD SAFETY HAS IMPACT BEVERAGES IN PARTICULAR
Extensive marketing campaigns employed
and to regain consumers' trust.
11
AGEING POPULATION WILL IMPACT FMCGS INCREASINGLY TARGETING AN
OLDER AGE BAND
32% 27% 24% 23% 23% 22%
10%11%
10% 7% 7% 7%
26%27%
27%27% 25% 21%
18% 20%21%
21%22%
23%
7% 9% 12% 14% 16% 17%
6% 7% 7% 7% 8% 10%
2000 2005 2010 2015 2020 2025
0-14 15-19 20-34 35-49 50-64 65+
❑ Vietnam – Total population and % by age group
2000 - 2025 CAGR
Total 1.0
0-14 -0.4
15-19 -0.6
20-34 0.2
35-49 1.9
50-64 4.3
65+ 2.8
80,286 84,309 88,473 93,572 98,360 102,764
Vietnam population (‘000 people)
Gen Y
and Z
❑ Vietnam – Population CAGR 2000 - 2025
Source: United Nations, WUP, 2014
Connected households
% Households with Internet % Households with Smartphone
69%95%88% 38%
Urban 4
cities
Urban 4
citiesRural Rural
Online shopping evolution
Triple-digitgrowth rate
% shoppers shop online:
Online
hot categories
Urban
4 cities
Rural
22%
+225k new households
6%
+478.5k new households
Source: Kantar Worldpanel | Family Form & Media Report & Households Panel | 2018 vs 2017
VIETNAM HAS GONE MOBILE, ECOMMERCE WILL THRIVE1
33 33
39
13
7
17
Traditional advertising Digital advertising
Gen
Z
Gen X Gen Y
People are less accepting of digital
advertising
People use technology to avoid ads (e.g. ad blockers) as
well as skipping and engaging in other activity
72% skip or pay
to avoid ads
47% use tech
to block ads
40% don’t watch/
do something else
Net Positive attitude to advertising format
EVEN THOUGH CONSUMERS NOW SPEND AN AVERAGE OF OVER 4 HOURS/DAY
ON DEVICES IN VIETNAM, THEY ARE GENERALLY LESS RECEPTIVE TO DIGITAL
ADVERTISING, WITH MANY TAKING ACTION TO AVOID IT
LESS THAN 1 IN 10 BRANDS GREW SIGNIFICANTLY OVER A 3 YEAR TIME
FRAME
15
▪ In many categories no brands grew
▪ Growth tends to come in the form of a step
change, something that disrupts the status
quo
▪ Incremental gains are easily countered by
the competition and the status quo remains
▪ Budgets, protocols and processes create a
“comfort zone” which encourages business
as usual
Source: BrandZ™, analysis of 2,052 brands between 2014 and 2017
6%
Source: BrandZ™, profile scores comparing absolute to expected values for
each brand, brands that grew or declined measured across 3 years16
THE NEW WISDOM SUGGESTS THAT SALIENCE IS ALL A BRAND NEEDS TO
GROW
So which of our three topline measures of brand equity best anticipates whether brands grow or decline?
-25 -5 15 35 55 -25 -5 15 35 55
SALIENCE DIFFERENCE
Disruptors
Brands that grew
Brands that declined
Dead and dying
-25 -5 15 35 55
MEANING
10
7
11
33
39
Beverages
Dairy
Home Care
Packaged Foods
Personal Care
33
32
35 New brand
New variant(flavor, benefit)
Changes to existing products(pack size/type, format)
Source: Kantar Worldpanel | Households Panel | New Launch Tracker
THERE ARE NOW 20 NEW LAUNCHES IN FMCG EACH DAY
Personal Care & Packaged Foods:
The most innovative environment
2018
More focus on brand’s variant portfolio
Successful launches remain hard to achieve
4.4%% Households a new launch
reached after 1 year
% Households repeat
purchase in the 1st year
Urban 4 cities
(< 5.4 in 2014)
23.9% (< 26.9% in 2014)
(2017 – 2018)
% of new launches
(2018 vs 2014)
2018
% of new launches
(2018 vs 2014)
18
INNOVATIONS THAT ARE DIFFERENT IN SOME WAY HAVE A GREATER CHANCE OF
SUCCESS
Vinamilk organic milk Sunlight Nature
Vinamilk introduced the first
organic RTD milk in Vietnam
Sunlight new added value variant
(with white tea, mineral salt,
lemon) claimed to be safe for kids,
gentle to skin and have mild
fragrance
[1] Natural products with clear evidence of nature
Clear’s new variant with 9 herbal
extracts such as Centella,
Asiatica, Cinnamomum, Ginseng
… to help get rid of dandruff
and helps to restore the
necessary nutrients for the scalp.
Clear Herbal Colgate Naturals
Colgate Natures -
reconnecting with nature to revive
our senses, rejuvenate our mind
and revitalise our body for a
healthy life with Lemon oil, Tea
Tree oil, Seaweed and Aloe Vera
extract, for a fresh and clean
mouth
19
Omo pioneered in UPGRADING THE
PACKAGE WITH A BALL helped to make
laundry easier – containing the liquid for
accurate dosage and supporting washing
machine from within.
Omomatic liquid washing ballAjinomoto with diverse
range of culinary products
Ajinomoto with WIDE RANGE OF
PRODUCTS facilitates the cooking process,
helping Vietnamese cook delicious food in
the convenient and less time-consuming
way.
[2] Make Life Easier
INNOVATIONS THAT ARE DIFFERENT IN SOME WAY HAVE A GREATER CHANCE OF
SUCCESS
20
[3] Mix of traditions and the modern
Number 1 Salted Lemon
Revive Salted Lemon
Number 1 Salted Lemon initiated the
salted lemon segment in isotonic drink
category, and Revive Salted Lemon
soon joined the band wagon.
Both could grasp significant growth,
hurting the long-established hard-core
isotonic segment, by delivering the great
traditional taste via a modern sporty &
youthful imagery
Push Max Passion fruit
Push Max was the first RTDJ brand
launching passion fruit flavor (a
popular fruit flavor in North), gaining
grounds quickly and hurting Twister
market share in this market
Cobote
Cobote - a new local brand offers wide
range of natural personal care
products made from natural
ingredients coconut, cucumber, ginger,
lemon grass,…
INNOVATIONS THAT ARE DIFFERENT IN SOME WAY HAVE A GREATER CHANCE OF
SUCCESS
21
[4] New mixes of ingredients
Coke Coffee
Coke Coffee offers a different experience
of Coke, which can also help them
refreshed and wake them up.
Fuzetea
The combination of Chia seed and
peach/ passion fruit flavour
ADM Chuối
Vinamilk launched ADM Banana – the
first-ever combination of milk and
banana in Vietnam
INNOVATIONS THAT ARE DIFFERENT IN SOME WAY HAVE A GREATER CHANCE OF
SUCCESS
22
[5] Packaging innovations that excite
Pepsi Next Generation
packaging collection
Pepsi is reintroducing its
iconic vintage design on
regular Pepsi products for
a limited time.
Coke and Pepsi launched
limited editions of packaging to
celebrate World Cup 2018
Milo launched can,
making it the first-ever
dairy drink in Can
format
Cocoxim excites
Vietnamese consumers
with packed coconut juice
Pepsi Coke and Pepsi
Milo
Milo Cocoxim
INNOVATIONS THAT ARE DIFFERENT IN SOME WAY HAVE A GREATER CHANCE OF
SUCCESS