Insight Handbook 2019 - VIETDATA

2019

Insight Handbook

Follow the shopper where the growth is

A Message from Managing Director

Technology continues to evolve at a fast rate and digital disruption is more and more common and impacting our lives in ways we

didn’t expect.

Insight Handbook 20194

5INTRODUCTION

The way we make decisions, like what to buy, has changed and the way we interact with brands is being constantly redefined by the changes in technology and the rise of social media which has impacted greatly on the consumer journey.

We have to continue to understand how people live, get exposed and influenced, interact with each other, and how they shop between offline and online. As a brand, it is vital to think about your entire customer experience, everything from your logo, your website, your social media experiences as well as the product quality. Brands need to build emotional connection with their audience and media owners need to provide content that people choose to watch.

Knowing this, finding out the real factors which influence consumer’s attitude and purchase behavior are our

priorities more than ever and successful brands and retailers will be the ones who dig deeper and truly understand how their consumers and shoppers are changing.

But it certainly won’t be easy.

In recent years the data that consumers have allowed to be collected so easily have given brands an edge in terms of marketing but with more and more issues over misused data and even data breaches, will 2019 be the year that we will see a backlash? It is noticeable that many have joined in exodus of some websites and platforms that have lost the trust.

Welcome to our 2019 edition of the Kantar Worldpanel Vietnam Insight Handbook, we wish to continue giving you the must-know foundation to contribute to your success.

Fabrice CarrascoManaging Director of Kantar Worldpanel Vietnam | Philippines Asia Strategic Projects Director

6 Insight Handbook 2019

The Kantar Worldpanel Vietnam Insight Handbook is our initiative

providing you with a deeper understanding of Vietnamese families and a comprehensive, up-to-date picture of the most

important consumer and shopper trends in Vietnam.


7INTRODUCTION

Dear Friends and Partners,

Now in its fourth edition, we are proud to keep you updated on changes in consumers’ thoughts, perceptions and shopping behaviours and bring you our insights and forethoughts moving for-ward to 2019 and beyond, in order to help you stay one step ahead of the market.

Above all, you will need to pull out all the stops to win as many shoppers as pos-sible to drive growth. Since all markets are composed of different segments of consumers, based on their needs, desires and behaviours; segmentation is essen-tial for any business to find new shoppers, to grow broadly and sustainably. Notice-ably, in the next 5 years, Millennials still matter to many brands and retailers, but furthermore, the growing senior popula-tion and the rising wave of centennials hold a huge potential to capture incre-mental growth.

On one hand, Vietnamese consumers have a tendency to go out more and enjoy different leisure activities such as eating and drinking and travel. This

provides many more touchpoints that marketers could utilize to reach their target consumers, especially the younger generations. In addition, this rising trend will also drive further the explosion of out-of-home market.

On the other hand, consumers seek greater convenience, which leads to the exponential development of E-commerce today. However, online shopping will not completely replace physical retail presence. Instead, with technological advancements, the boundaries between online and offline will be more blurred, offering enhanced shopping experienc-es. The big question that brands and retailers should think about is how to take advantage of technological innovations to build a deeper level of engagement with personalized experiences and em-bed them into their current omnichannel strategy to ensure a seamless path to purchase for consumers.

Enjoy your reading, get inspired, and we wish you a successful year 2019!

David AnjoubaultGeneral Manager of Kantar Worldpanel Vietnam


Table of Contents

9

17

68

01 K-FACTSThe new pace of FMCG growth

02 K-FORETHOUGHTSThe macro forces to unlock the future growth

03 K-TEAMMeet, Greet & Get Inspired

Macroeconomic stability

Shifts in consumer spending

FMCG slowdown & growth opportunities

The many faces of future consumersMORE GROUPS WITH MORE OPPORTUNITIES

PolarizationONE SIZE DOESN’T FIT ALL

InnovationUNLOCKING NEW VALUE

Living well. Playing wellELEVATING CONSUMERS’ LIVES

Beyond DigitalTHE FUSION OF ONLINE AND OFFLINE

Enhanced Shopping ExperienceTHE BLEND OF DIFFERENT SHOPPING CHANNELS

10

13

14

18

26

32

38

50

58

01

02

03

04

05

06

K-FACTS01The new pace of FMCG growth


Macroeconomic stability

Source: GSO Vietnam

2010 2011 2013 2015 20172012 2014 2016 2018

6.8 5.9 5.3 5.4 6.0

24.5 24.2

16.0

12.610.6

9.510.2

12.012.4

9.1

6.6

4.12.7 3.5 3.5

9.2

18.7

0.6

6.77.1

6.26.8

Expectation for 2019 - 2022

GDP6-7% 3-4%

CPI

GDP Growth (%) Inflation (%) Sales of Goods & Service (%)

11K-FACTS

Beside major driving forces for Vietnam’s economic growth, both challenges and opportunities are lying ahead…

Source: GSO Vietnam | 2018 versus 2017

14% GROWTH 20% GROWTH

Total export turnover Tourism: International Visitors

12% GROWTH

Total retail sales of services & consumer goods

9% GROWTH

FDI (implemented)

OPPORTUNITIES CHALLENGESTrade agreement: EVFTA, CPTPP,…• Opportunities for export• More foreign investment• Technology transfer & development• Wider range of imported products with

good quality and competitive price

Business environment• Legal reforms• Competitiveness and attractiveness of

local companies

ASEAN Smart Cities Network: smart solutions in transport systems, urban management, flood monitoring systems and e-government services.

Rising global price of oil threatens inflation

Privatization of State-Owned-Enterprises (SOE): attract foreign investment, increase Government budget

Public debt burden

Growing urban middle class: strong domestic demand & consumption

Exchange rate pressure amidst US-China trade warEnvironmental issues (climate changes, air pollution, plastic pollution,…)

12 Insight Handbook 2019Source: Kantar Worldpanel | LinkQ project | Vietnam Urban 4 key cities

Along with a brighter outlook, Vietnamese consumers are more optimistic

Top 3Household’s Concerns

1st 2nd 3rd

Environmental issues / Diseases

Health & Wealthness

Food safety

Most key decisions makers for FMCG BELIEVE IN A POSITIVE SITUATION in the coming months

% Housewives agree

Vietnam economic growthBetter or same as today

Household’s purchasing powerBetter or same as today

86% 96%

13K-FACTS

Fresh Food & FMCG dominate households’ share of wallet, however, consumers have a tendency towards new aspirations

URBAN(4 cities)

RURAL

Investment

Housing

Others

Savings

Basic Needs*

Education & Healthcare

New Aspirations*

Fresh food & FMCG

New Aspirations*

Housing

Others

Education & Healthcare

Basic Needs*

Savings

Investment (incl. farming cost)

Fresh food & FMCG

4.4

2.9

5.4

11.8

15.6

16.0

17.2

26.8

25.9

16.8

6.4

7.3

9.7

9.8

11.2

12.6

% Spending per month

Source: Kantar Worldpanel | Expenditure Survey 2017 | Urban 4 cities & Rural Vietnam

*Basic needs: Transportation, Communication, Household utilities*New aspirations: Eating/Drinking out, Travel/holiday, Entertainment


FMCG slowdown & growth opportunities

Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam | FMCG excluding Gift | Value growth % | 12 months ending September 2018

% Value growth

Forecasted for 2019 - 2022:

5-6%FMCG market value growth

CAGR (2012-2018) Urban (4 cities) Rural

Value 6% 7%

Volume 4% 8%

Avg. paid price 2% -1%

RuralUrban (4 cities)

2012

14.8 12.3

2015

2.7 8.5

2013

9.8 12.0

2016

4.8 2.7

2014

3.8 10.4

2017

5.3 4.4

2018

2.3 6.4

15K-FACTS Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam | FMCG excluding Gift | 12 months ending September 2018

There is room for many categories to develop further across all sectors


% Value Share in total FMCG

MAT P9'18Dairy

Beverages

Packaged Foods

Personal Care

Home Care

URBAN(4 cities)

RURAL

Dairy

Beverages

Packaged foods

Personal care

Home care

29.8%22.6%

9.4%

29.5%27.0%

9.6%

22.1%

22.5%

% No. categories reach <50% households

Dairy Beverages Packaged Foods

Personal Care Home Care

71 79 71 76 74 76 78 86 58 58

16.0%11.5%

Beverages and Personal Care are gaining more share, partly thanks to the push of innovation

• Vietnam macro-economy stabilized

• Vietnamese consumers’ confidence stays high

• Both opportunities and challenges are lying ahead

• New aspirations are arising• FMCG is growing, but slowing• Room for growth across many

categories

Key take-aways

Macro Economy

Consumer Spending


K-FORETHOUGHTS02The macro forces to unlock the future growth


01 The many faces of future consumersMORE GROUPS WITH MORE OPPORTUNITIES

All markets are composed of different consumer segments, based on their needs, desires and behaviors.

Hence your market strategy must take segmentation into account in order

to find new growth opportunities.

18

19K-FORETHOUGHTS Source: Kantar Worldpanel | Brand Footprint 2018

The growing Senior populationVietnam is now considered as one of the world’s fastest aging population by the World Health Organization. Getting older ultimately impacts consumer choices, attitude and behaviors. This will force businesses to adjust their growth strategies in the years to come to meet the needs of this growing consumer group. With well-being as their top priority, this consumer group will be focusing on products that help preserve their health, thus providing numerous opportunities for businesses to uncover.

Millennials still matterBrands and retailers still need to keep their eyes on millennials as they are the most valuable consumer group in Vietnam today (contributing 36% of value to in-home FMCG market) and will remain the core workforce for the country in the next 5 years. Millennials value innovations (those that bring truly new benefits, new formats) and seek for greater convenience to help them ease their lives. They also have influence on other generations’ decisions, so it’s crucial to convince them.

Centennials: The next wave of influencers and consumersTalks around Centennials, known as GenZ or post-Millennials, are happening more and more these days. Born after 1997, they have grown up surrounded by smartphones and tablets, forming digital natives who are mostly connected. They love going out and gathering with friends - making the greatest contribution to the development of milk tea market today! As their spending will increase , this group offers great opportunities for the out-of-home F&B market.

What’s changing?


2017

The aging population offers more opportunities for manufacturers and retailers

2018 2038105 Million95 Million

20 Million 36 Million~22% pop. ~34% pop.

Seniors are in high need for nutrition and health, save or invest more for the future, and are price conscious.

80+

75-79

70-74

65-69

60-64

55-59

50-54

45-49

40-44

35-39

30-34

25-29

20-24

15-19

10-14

5-9

0-4

1,922

1

2,077

3,558

4,790

5,555

6,103

6,730

7,269

8,084

8,766

8,525

6,740

6,683

7,360

7,752

1,390

1,141

2,206

3,464

4,505

5,319

5,856

6,887

7,676

8,477

7,130

6,451

6,703

7,255

7,676

7,320

6,460

5,136

6,359

The growing Senior population

Source: United States Census Bureau | GSO Vietnam

1

21K-FORETHOUGHTS Source: Household panel | Urban 4 cities | % Value among FMCG excluding Gift |12 months ending September

Mature families – those without kids and teens – are dedicating more spending to dairy consumption

Dairy value share (%) in their FMCG wallet

2018 20182017 2017

All Families

All Families

Mature Families

Mature Families

Dairy value growth (%)

31.5 20.7

-2.7% 11.1%

29.8 21.0

22 Insight Handbook 2019Source: United States Census Bureau | GSO Vietnam | 2018

Millennials are still the most sizeable consumer base

* Millennials who were born between 1980 and 1996

Vietnamese Millennials

of Vietnam population

of Global population

Millennials are well educated, tech-savvy, open minded and early

adopters of healthy lifestyle.

~33 millions~35%

32%

2 Millennials still matter

23K-FORETHOUGHTS

Millennials are more responsive to innovative products and concepts, which opens opportunities for brands to experiment and create new things that fulfill their aspirations

Source: Kantar Worldpanel | Households Panel | Vietnam Urban 4 Cities | FMCG excluding Gift | 12 months ending June 2017 | Millennial under 40 y/o

Number of Variants

New flavors - % buyers

Biscuits

Biscuits – Seaweed flavor

Snack – Cheese flavor

Snacks & Nuts

Older Gen Older Gen4.7 3.6

Millennials Millennials5.0

5.9

18.6

11.3

22.7

4.4

MillennialsOlder Gen


Vietnamese Centennials 2018

Born in a digital world with full access to information

Inseparable from mobile phones and most active on social media platforms

Seek out new news, new experiences

Influenced by Korean culture and concerned about social issues

Early self-conscious about appearance

*Known as GenZ who born from 1997 to present

Who are Centennials?

>29 millionsof Vietnam population

30%

Source: United States Census Bureau | GSO Vietnam

3

Centennials, consumers born after 1997, account for one third of Vietnam population and are increasing their influence in society

3 Centennials: The next wave of influencers and consumers

25K-FORETHOUGHTS Source: Kantar Worldpanel | Out-of-home Panel | Individuals 15-49YO | HCMC | Food & Drinks | 3 months ending November 2018

*Bubble tea includes milk tea, tea with milk foam, milk with brown sugar bubble

They love being out of home with the hottest food and drink trends, especially bubble tea craze

Ready-to-drink and ready-to-serve Bubble Tea* for Out of home consumption

% Reach

Centennials (15-22yo)47%

Average shoppers38%


02 PolarizationONE SIZE DOESN’T FIT ALL

All price tiers are making efforts to justify their

position, hence getting closer to each other

in terms of offers and sharing consumer base

26

27K-FORETHOUGHTS

What’s changing?

Premium Brands go reasonable

Lower tier won’t die easily

Source: Kantar Worldpanel | Brand Footprint 2018

Consumers are paying higher price on 40% of their FMCG products, especially for personal care items.

High-priced products in mass categories have paved their way into more families thanks to affordable cash outlay of small size or saving packs. Meanwhile, some others justify their price by special ingredients or serving niche needs of consumers. The rest rely on their international image or imported origin to capture the growing desire of Vietnamese consumers for foreign products.

Given approx. 60% of Vietnamese households still live in Rural with lower income than Urban, a majority of them use low tier brands. Premiumisation does happen there, yet largely up to mainstream tier, while premium tier remains at trial stage.

Even in Urban cities, those who use mostly premium items also spare a part of their wallet to buy lower tier products, possibly for different usage purpose or simply being satisfied with their adequate quality.

In high usage frequency categories, manufacturers are pushing jumbo packs to leverage saving price and secure usage loyalty. Others thrive by premiumizing their image with added nutrients or special format.


The hot keyword is ‘uptrading’, as >40% of FMCG categories can grow their average price higher than the CPI rate

Source: Kantar Worldpanel | Households Panel | Urban 4 cities & Rural Vietnam | FMCG excluding Gift | 12 months ending September 2018

CPI YTD Sep 2018: 3.57%Urban 4 key cities: counting 108 significant categories, Rural: counting 81 significant categories.

Multi & Omni Channel1

% Categories

URBAN(4 cities)

RURAL

Uptrading (price increase > CPI)

Stable

Downgrading (price decrease < -3%)

53%

7%

40%

46%

44%

10%

29K-FORETHOUGHTS

That happens across sectors, majorly seen in Personal Care

Source: Kantar Worldpanel | Households Panel | Urban 4 cities & Rural Vietnam | FMCG excluding Gift | 12 months ending September 2018

% Categories

% Categories

URBAN(4 cities)

RURAL

Uptrading (price increase > CPI)

Stable

Downgrading (price decrease < -3%)

Dairy Beverages Personal CareHome Care Packaged Foods

13%

73%

13%

21%

71%

7%

37%

56%

7%

33%

50%

17%

60%

20%

20%

Packaged Foods

Beverages Personal CareDairy Home Care

29%

52%

19%

33%

58%

50%

50%

40%

47%

13%8%

67%

29%

5%

30 Insight Handbook 2019Source: Kantar Worldpanel | Households Panel | Urban 4 cities | FMCG excluding Gift | 12 weeks ending June / September 2018

* Super Premium Noodle: >=10k VND/ bag; Super Premium Shampoo: price index >120.** Economy-Mainstream Fish sauce: <60k VND/ liter; Economy Shower Gel: price index <90.

Nevertheless, Economy-Mainstream tier still has room to survive. Even households who buy a lot of Premium items still buy lower-priced items of that category or other categories

Within that category

Cross categories

Heavy buyers of Super Premium Noodle* still spend 20% wallet for

Economy-Mainstream Noodle

Heavy buyers of Super Premium Noodle* still spend 49% wallet for

Economy-Mainstream Fish sauce**

Heavy buyers of Super Premium Shampoo (*) still spend 26% wallet for

Lower tier Shampoo

Heavy buyers of Super Premium Noodle (*) still spend 44% wallet for Economy

Shower Gel**

20% 26%

49% 44%

31K-FORETHOUGHTS

What are the survival tips for Low tier brands?

What are the growth accelerators for Premium brands?

1.Big Pack Size

1.Affordable Pack Size

2.Added Value

2.Advanced Benefits

3.Pure Ingredient

3.Premium Concept

4. International Image


03 InnovationUNLOCKING NEW VALUE

33K-FORETHOUGHTSK-FORETHOUGHTS

What’s changing?


Innovation in a nutshell• Brands and manufacturers invest enormous amount of resources on

introducing new products to consumers. • Innovators now are moving to launch a whole new product (pioneering

product) rather than simply offering a new choice of size, packaging design under the same products or existing brands.

It’s never easy to make new launch succeed• It becomes more challenging to grab consumers’ attention among

numerous new products as they are more skeptical of the influencing factors around them.

• High quality innovation is needed as trial rate after 1 year of launching is getting lower over time.

A successful innovation translates consumer needs into an attractive story• New products hitting the market must meet the consumers’ needs and

expectations.• A successful innovation always comes with a long-term and sustainable

launching plan: Who should my brand talk to? Which channel to focus? Does Promotion work?


The FMCG market is much more innovative over time

Source: Kantar Worldpanel | Household Panel | Urban 4 key cities | FMCG

New SKUs is counted based on new brand, variant, pack size, pack type

New launches/day

2014 2017 YTD Nov 2018

URBAN (4 cities)

16.221.8 22.0

In 2018, new launches appear almost every hour!

35K-FORETHOUGHTS

More focus on stretching brand’s variant portfolio

Source: Kantar Worldpanel | Household Panel | Urban 4 key cities | FMCG 2018


Types of innovation (% of new SKUs)

New Brands New Variants Changes to existing products

URBAN (4 cities)

37% 31% 32%

37% 39% 35%

26% 31% 33%

2014 2017 YTD Nov 2018

36 Insight Handbook 2019Source: Kantar Worldpanel | Household Panel | FMCG | 12 months ending November 2018

Which sectors are the most innovative? Personal Care & Packaged Foods!

Beverages Dairy Home Care Packaged Foods

Personal Care


Share of innovation (% of new SKUs)

15%

30%

38% 7%

10%2014

YTD 2018

201740%

11%

11%7%

10%

37%

36%

8%

5%

35%

37K-FORETHOUGHTS Source: Kantar Worldpanel Vietnam | Household panel | Urban 4 key cities & Rural Vietnam


26.4%26.9%

New launches are facing more challenges to grap consumers’ attention and retain their loyalty

% Households a new launch reached after 1 year(Trial Rate %)

% Households repeat purchase in the 1st year(Repurchase Rate %)

2014 2017 2014 2017


2014 2017 2014 2017


5.4% 5.2% 5.1% 4.6%

25.7% 27.8%


04 Living wellPlaying wellELEVATING CONSUMERS’ LIVES

Simplifying household chores, relying more on convenience products/ services and investing

more on advanced values and new experience

39K-FORETHOUGHTS

What’s changing?

My Home: Modernizing & Smart Living leads to Advanced Home Care needs

My Kitchen: Less Cooking, Simpler Preparation, relying more on Convenient Foods

My Health: Active Lifestyle, Less Sugar, More Natural Ingredients & Vitamin Supplements

My Beauty: Self-Appearance is of Higher Importance, Endorsing Expert Solutions & Regime Beauty Care

My Budget: Spending more on Out-of-Home Experience

1

2

3

4

5


Vietnamese consumers are moving up the Maslow’s hierarchy of needs thus expecting more from products & services to ease their lives and indulge themselves

Less cooking & more convenient foodsIncreasingly, consumers are expecting to have more products/ solutions which make cooking simple and quick. Products offering ease of use in the cooking process such as Meal Maker and ready-to-cook, ready-to-eat are picking up strongly while necessity items struggle to find growth. Light meals and snacking items are increasingly adopted for in-home consumption. Modern retailers and E-commerce players are also offering more solutions to home meals.

Beyond the basicsTogether with the upgrading lifestyles, consumers are expecting more from the products/ services they use.

Basic and functional benefits are now taken for granted, thus at risk of becoming commoditized. Consumers spend less on routine items and are willing to spend a lot more on things that offer added values/ advanced features that differentiate from others and those that help reduce the tiring in-home daily tasks so that they have more “me” time.

Insight Handbook 201940 Insight Handbook 2019

Healthy, natural ingredients & self-apperance focusConsumers become more selective on the products that they consume. Natural ingredients, fortified values, plant based Foods & Beverages are on the rise inside consumer baskets. They also exercise more and take more vitamin supplements.

Self-appearance is also getting higher attention. Skin Care and Make-up items in new formats which promise higher efficacy and better results are being adopted more. Regime usage also starts to build up.

Out-of-home pleasuresConsumers are increasingly seeking new experience and enhancing their life quality. As majority of the population today are millennials, socializing needs including travelling and drinking/eating out are also more important.

People tend to behave differently when being out-of-home. Also, the product choice, price range and channel selection vary by gender, age and consumption occasions with lower brand loyalty, and stronger impulsiveness.

41K-FORETHOUGHTSK-FORETHOUGHTS


Modernizing & smart living lead to upgrading needs for products/ services to be quicker, more effective and more customized to meet their lifestyle

% Households agree

“I would like to have more products/services which can make cleaning tasks simple and quick”

2pts 1ptsRural

72%Urban

(4 cities)

76%

Washing Machine% households with ownership (2017 vs 2012)

Cleaning RobotGoogle search trend

87% 42%

13pts 30pts

URBAN (4 cities) RURAL2016 2018

614 million results

Source: Kantar Worldpanel | Family Form | Urban 4 Key Cities & Rural Vietnam | 12 months ending September 2018

Opportunity for

1 Home cleaning services

2 Multi-purpose cleaners

3 Quick effect products

My Home1

43K-FORETHOUGHTS

My Kitchen 2

69

Modernizing living, less cooking and more reliance on convenient products

% Working Housewives

Opportunity for

I rely heavily on convenience foods to make cooking

simple and quick

2013 2017

Rural45%

Urban(4 cities)

49%

64

% Households agree

Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities and Rural Vietnam | Packaged foods including Gifting | 12 months ending September 2018 vs. YA

Instant packaged foods

Ready-to-cook, ready-to-serve foods

Frozen/ chilled/ ready-to-eat & ready-to-drink F&B

Home delivery

44 Insight Handbook 2019Source: Kantar Worldpanel | Lifestyle 2017 & Heath Survey 2018 | Urban 4 cities & Rural Vietnam

Prevention is better than cure

With increasing health concerns and issues, people need to have a better prevention for health conditions.

% Households agree

% Households with members having

Back pain

Joint/muscle pain

High blood pressure

High cholesterol

Osteoporosis

Diabetes

89%

91%

79%

82%

59%

59%


I worry about my health more than before

I exercise regularly for better health

I often take vitamin or supplements

72%

42%

33%

21%

16%

64%

My Health3

45K-FORETHOUGHTS

Higher demand for sugar reduction

Source: Kantar Worldpanel | Household panel | Lifestyle Survey 2017 | Urban 4 cities & Rural Vietnam | Total RNGS

% Households agree

Liquid Milk – % Volume

H1’17 H2’17 H1’18

Less sugarNo sugar

7.0

8.1

15.3

16.917.1

9.3

Housewife 40+ YOTotal urban (4 cities)

“Nowadays, I am more concerned about my and

my family’s weight”

“I prefer to buy low/ free sugar drinks”

“I read the product label to avoid buying

unhealthy foods”

75 867076 8774

*RNGS: Rice, Nut, Grain, Seed

Natural ingredient need: plant based products are on the rise

Volume growth YTD P9’18 vs YA

Penetration

14.4%

44.5%

RNGS*

Soy Drink

61%

4%


As self-appearance becomes more important, consumers spend much more on beauty products and also expert services (spa, skin clinics…) to make them look good

Source: Kantar Worldpanel | Lifestyle Survey 2017 | Household panel | Urban Viet-nam 4 key cities | 12 months ending September 2018

% Households agree

Average spend per buyer (000 vnd)

Facial moisturizer Facial cleanser Sun protection

2013 20132017 2017

Nowadays you have to take care of your skin more

I often go for skin care services

2015

2016

2017

2018

355397

476

523

169 181 198 207 187

249

318338

My Beauty4

73 2175 25

47K-FORETHOUGHTS Source: Kantar Worldpanel | Lifestyle Survey 2017 | Household panel | Urban 4 key cities & Rural Vietnam | 12 months ending March 2018

Advanced Skin Care & Make Up items are growing the fastest on consumers’ shopping list as people adopt more new formats which promise faster /more effective results

Make up remover + oil cleanserBecome more relevant in the Vietnamese beauty care regimenMAT P3’18 vs 2YA

Make up remover

Oil Cleanser

82,500

20,000

ADDITIONAL BUYERS

TreatmentAlong with the rise of sophistication trend, new formats of Moisturizer are adopted

ADDITIONAL BUYERS VS 2YA

Serum20,000Lotion12,500Gel10,000

MaskMask category is gaining fast, esp sheet mask due to convenience. 90,000

ADDITIONAL BUYERS VS YA

Make upMAT P3’18 vs 2YA

Lipstick122,000

Concealer11,000

ADDITIONAL BUYERS VS 2YA


What’s more important to me?

With deeper pocket, what do consumers spend more on?Expenditure 2017 vs. 2012

My budget (% monthly spending)

Source: Kantar Worldpanel | Expenditure & Lifestyle Survey 2017 | Urban Vietnam 4 key cities

Vietnamese invest much more on the future (education, investment, savings); yet don’t neglect the presence: travelling & eating/ drinking out more often

Fresh food & FMCG

Housing

Household Utilities

Transportation

Communications

Healthcare

Education

Eating/drinking out

Entertainment + travel/holiday

Savings + investment

My family eats out regularly% Households agree

2015 2017

12

17

Education 2.1 PTS

Savings & Investment 1.8 PTS

Travel/ Holiday 0.6 PTS

Drinking/ Eating Out 0.4 PTS

My Budget5

26.8%

4.4%

6.6%

5.2%3.8%

3.9%12.9%

9.9%

7.3%

20.1%

49K-FORETHOUGHTS

Consumers spend a lot more for convenient foods & drinks out-of-home (OOH)

Source: Kantar Worldpanel Take-Home & Out-of-home purchase panels

*HCMC: 12 weeks ending November 2018

Global HCMC

Out-of-home versus take-home spend 52-weeks ending June 2017

In home E-commerce in-homeOut-of-home

41%56%

3%

China Indonesia Thailand

66%

33%

1%

48%

2%

50%

56%44%

63%

37%


05 Beyond Digital THE FUSION OF ONLINE AND OFFLINE

Everything goes online

51K-FORETHOUGHTS

The way we communicate

The way we shop

People no longer wait until they get home to get online via computers. Instead, they use their mobile devices to stay online everywhere, all the time.

Internet, especially Social Media and Chat applications are rapidly changing the way we interact with businesses and the way brands interact with consumers. This allows businesses to expand visibility to a larger population and connect with potential audience.

Gone are the days when a customer would simply walk into a store and purchase the items they were looking for.

With just a few clicks, they now can check the price of the item in stores around the world and read reviews from other people that have purchased the item before they make their decision.

They even use multi channels before making a purchase.

What’s changing?


Urban (4 cities)

Asian consumers are now more and more connected. Mobile technology, including smartphones and mobile data plans contribute to a greater reach of the Internet

Source: Internet World Stats and United NationsKantar Worldpanel I Household Panel I Urban 4 Key cities & Rural Vietnam I Lifestyle Survey

Internet Penetration by Countries (%) (2017)

% Household with Smartphone in VN

10pts

Rural

90 88 87

95 93

8479

67

5653

50

United Kingdom

South Korea

United States

Malaysia ChinaGermany Thailand PhilippinesFrance Vietnam Indonesia

8 8 9

58

28 36

13 13 1119

6

23pts

95% 69%

Internet Penetration (2017)

Penetration change (2017 vs 2012)

53K-FORETHOUGHTS Source: Kantar Worldpanel | Lifestyle Survey 2017 vs 2015

36%

More and more people move deeply into connected life


I am spending more and more time on internet during my free time

% Agree

I surf Internet to get updates about the world rather than traditional media

2015 2017 2015 2017

48%

31%

46%

34%

20%

29%

56%


Online is speeding up, reaching up to 8 out of 10 shoppers in Urban 2 cities and even having a higher usage time than TV. The growth rate in Rural is also very impressive

Reach (%) Frequency (hours/day)

(*) Internet usage time of Housewives < 30YO

2014

2015

2018

2018

Television Internet

Television Internet

Television Internet

Television Internet

3.4 1.52.9 3.0

2.8 1.32.4 2.1

The millennials spend up to 30% of their waking lives

online with 4.8hrs online/day*

DO YOU KNOW

100%

99%

62%

15%

98%

95%

81%

45%

URBAN(2 cities)

RURAL

Source: Kantar Worldpanel | Media 2018 | Urban 2 cities & Rural | Among key decision makers for FMCG

55K-FORETHOUGHTS

Reach (% households/day) Frequency (mins/day)

Social network and instant messaging apps heavily dominate online activity

A lot of purchases take place here, and thus make them

important e-commerce touch-points

Source: Kantar Worldpanel I Media 2018 I Urban 4 cities & Rural | Among key decision makers for FMCG

79% 179

70% 36

61% 32

45% 126

38% 34

25% 28

Internet

Social Network

Chat Online


56 Insight Handbook 2019Source: Kantar Worldpane | Europanel

[i] Modern trade includes: hypermarket and supermarket, convenience stores and discounters.[ii] Other include: door to door, drugstore, and pharmacy.

As a result, e-commerce is growing, especially in Asia

Global

Latin America

5.8%

61.8%

76.0%

24.0%7.3%

40.9% 51.8%

31.8%

44.9%55.0%

9.9%1.9% 5.6%

8.8%

88.2% 85.6%

0.1%

Africa & Middle East

USA

Asia

Western Europe

Globally e-commerce as a channel now accounts for 5.8% of FMCG sales & this number rises to 7.3% for Asia

FMCG value share by channel (2017)

Modern Trade (i) Traditional and others (ii) E-commerce

57K-FORETHOUGHTS

E-commerce

Source: Kantar Worldpanel | Households Panel | Urban 4 key cities & Rural Vietnam | FMCG excluding Gift | 12 months ending September 2018 versus year ago

Keeping up with the global trend, online shopping in Vietnam continues to rise and recruit more and more shoppers

E-commerce

% Penetration

Frequency/year

Spend per Trip (VND)

URBAN(4 cities)

4.6%

2.4

259K

19.4%

3.7

346K

RURAL

+7.7 pts (2018 vs YA)

Last year: 2.6

Last year: 327K

+3 pts (2018 vs YA)


06 Enhanced shopping experienceTHE BLEND OF DIFFERENT SHOPPING CHANNELS

58

Shifting dynamics in retail landscape and shopper trends that

businesses and brands must understand

59K-FORETHOUGHTS

What’s changing?

Multi and Omni-Channel

Modern Proximity


Shoppers now go to more channels to serve different shopping missions, with online playing a growing important role.

Yet, there is strong evidence that online formats – in isolation – are no longer the best option for winning share. It´s about how online and offline work together to create a better shopper experience.

It’s now the critical time for current retail giants and manufacturers to develop an effective omni-channels strategy.

Proximity secures itself among top reasons to choose a store because Vietnamese consumers have high preference towards convenience and ease of shopping.

Therefore, it is not surprising to see a dramatic development of the modern and convenient formats in Vietnam (convenience stores and mini markets), with the expansion in number of stores as well as strong shopper acceptance.

From Mass to SpecializedWe will see more and more new formats of modern retailers in everyday life, across all industries. Some examples of growing specialized formats are Mom & Baby stores, Health & Beauty stores, Lifestyle stores…

It is expected that Modern trade will develop towards more specialty and smaller scale format, and increase the presence with the expansion in number of stores.

Tech Embedded LifeTechnology empowers the creation of new occasion enhancement of experience, digital/mobile order method, auto replenishment and cashless society.

Technology enables us to witness future retail experience where there is more seamless shopping experience and online and offline boundaries are blurred.

With Technology development, new retail is crossroads of community, leisure and shopping.


Shoppers go to more channels to serve different shopping missions, driven by millennials housewives

Source: Kantar Worldpanel | Households Panel | Vietnam Urban 4 Key Cities | Total FMCG excluding Gift | 12 months ending September

<3 channels 3-4 channels 5-6 channels

7-8 channels 9-10 channels 11-12 channels

13-14 channels 15+ channels

% Visited Channels in

2018

< 3 channels

3-4 channels

5-6 channels

7-8 channels

9-10 channels

11-12 channels

13-14 channels

15+ channels

6%

21%

24%

24%

15%

6%

3%

1%

Average Number of Visited Channels (By Housewife Age)

20182016

<30

30-39

40-49

50+

TOTAL

7.1

6.6

6.4

6.4

6.3

6.4

6.1

6.1

6.0

5.8

Multi & Omni Channel1

61K-FORETHOUGHTS

In Vietnam, retailers are proactively stretching their retail portfolio to meet the needs of Omni-shoppers

Source: Kantar Worldpanel | Households panel | Urban 4 key cities | FMCG | 12 months ending September 2018

*Number of store: Updated to November 2018

Click & Deliverywebsite

Supermarket Minimart

Hybrid franchise format between medium-sized street shops and convenience stores

PENETRATION: 1%

PENETRATION: 42% PENETRATION: 13%

Convenience store

16 STORES

Hypermarket

PENETRATION: 5%

3 STORES 102 STORES 238 STORES

71 STORES

Hypermarket

13 STORES

Click & Delivery mobile app

Click & Delivery website

PENETRATION: 15%

Supermarket

PENETRATION: 18%

75 STORES

Click & Delivery

ConvenienceStores

PENETRATION: 18%

812 STORES

PENETRATION: 1%


% Agree in 2017 Minimarts &Convenience stores

% Penetration of Minimarts & CVS

“I choose a store because it’s NEAR my home”

39% Value growth 2018 vs YA

Urban(4 cities)

Rural

74%78%

Source: Kantar Worldpanel | Households panel | Urban 4 key cities | FMCG | 12 months ending September & Lifestyle Report 2017

36 42 53

Proximity & convenience are among top reasons to choose store, explaining the rise of mini stores

Modern Proximity2

2016 2017 2018

63K-FORETHOUGHTS

Ministores Performance in South East Asia

*Size of bubble is size of penetration %

Source : Kantar Worldpanel | GCD | 12 months ending September 2018 vs year ago (Except PH: 12 months ending December 2017 vs year ago)

0 2 4 6 8 10-10

14

12

10

8

6

4

2

0

-2

-4

-6

-8

-8 -6 -4 -2

Spend per Shopper Growth %

+/-

Pene

trat

ion

Cha

nge

VN

Penetration: 53%

Penetration: 87%

GAIN SHOPPERS & SPEND PER SHOPPER

GAIN ONLY SPEND PER SHOPPER

Penetration: 77%

Penetration: 18%

TH

ID

PH

GAIN ONLY SHOPPERS

64 Insight Handbook 2019Source: Kantar Worldpanel | Households Panel | Vietnam Urban 4 Key Cities | Total FMCG excluding Gift | 12 months ending September 2018 vs year ago

Online

Mom & Baby Store

Health & Beauty Store

Shops sell mainly baby and pregnant

mother products and over 80% of space dedicated for baby

and pregnant mother products display

Consumers make orders through Internet

merchandising sites, including E-retailers like

Lazada, Shopee and Social Commerce

79% 5%GROWTH PENETRATION



70 STORES

140 STORES

64 STORES

384 STORES

141 STORES

Specialized stores are having better growth than mass stores

From Mass to Specialized3

65K-FORETHOUGHTS

Direct Sales

Lifestyle Stores

Delegation Service

Merchandise is delivered to house (door to door, Multi Level Selling)


34 STORES 41 STORES 6 STORES

HAIR SALON

LAUNDRY SERVICE


Unmanned store with AI

Personalized & all-in-one

e-commerce platform

Retail as entertainment

= Retailtainment

In China and Indonesia, Tencent introduced unmanned stores using facial recognition, artificial intelligence and RFID tech, with an aim to provide future shopping experience.

Alibaba also launched the staff-less and cashless stores such as Tao Café.

COUPANG, the largest online retailer in South Korea won over fans with personalized service for e-commerce.GoJek is Indonesia super App with food delivery, fintech, logistics, payments, e-com and on demand service all baked into one Super App.

Alibaba’s Tmall “See Now, Buy Now” fashion show provided a seamless shopping and entertainment experience. The event was live and broadcasted across 7 media platforms incl. TV, online video site, socmed and shopping apps. Viewers were able to buy what they see, when they see it, on all those platforms.


Tech Embedded Life4

K-FORETHOUGHTS 67

Mom&pop store going digital

No cash society via digital

wallet

Auto-replenishment

Alibaba installed its cloud system in 600K++ independent retailers in China.Go-Pay has now ventured towards cashless payment system in 3000++ offline merchants such as “food street hawker.”

Asia Consumers’ are on the shifting point from cash to e-money fueled by integrated mobile online payment driven by online players who develop their own financial ecosystem. In Vietnam, MoMo, ZaloPay, Airpay are some among many e-wallet companies that offer consumers with flexible financial platforms.

Voice activated products encourage shoppers to give up non-experience products in favour of auto-replenishment for necessities and routine shopping.It’s expected to see the emergence of new hybrid models in Vietnam that offer consumer with maximum ease and convenience, such as subscription model, click and collect, click and delivery, virtual stores, etc.

K-FORETHOUGHTS


K-TEAM03Meet, Greet & Get Inspired

69

K-TEAM

K-TEAM

Worldpanel Geographic Coverage

Our Commitment Local, Regional, Global

MexicoVenezuelaGuatemalaHondurasEl SalvadorNicaraguaCosta RicaPanamaColombiaEcuadorPeruBoliviaChileBrazilArgentina

UKIrelandBelgiumFranceThe NetherlandsGermanyAustriaSpainPortugalItaly

IndiaVietnamThailandMalaysiaIndonesiaPhilippinesSouth KoreaGhana

NigeriaKenya

South Africa

Household samples:Largest panel sizes and largest number of panels worldwide

GDP coverageAsia

GDP coverageEurope

GDP coverageLatin America

Commitment to consumer panels

CroatiaBulgariaGreeceBosnia & HerzegovinaTurkeySaudi ArabiaEgypt

Poland,Czech RepublicRussiaSlovakiaHungaryRomaniaUkraineKazakhstanSerbia

DenmarkSwedenNorway

ChinaJapanTaiwan

Australia

USA

270,000

92% 96% 100%73%


Our Methodology

Panel Methodology Continuous Tracking

Urban Household Panel

Weekly data collection via diary

• Consumer purchase behavior of 5 sectors (~130 FMCG categories):- Dairy- Beverages- Packaged Food- Home Care- Personal Care

• Brand performance• Retailer performance• Shopper insights• Demographics and lifestyle• Household durables ownership

Rural Household Panel

Bi-weekly data collection via diary

Baby Panel

Bi-weekly data collection via diary

• Purchase behavior of ~ 10 baby categories

Out of Home Individual Purchase Panel

Smartphone data collection

• Major convenient F&B purchased for consumption away from home, including 6 sectors (~ 24 F&B categories):- Milks & Nutritional Drinks- Tea & Coffee- Other Non-Alcoholic Drinks- Sweet and Savoury Snacks- Light Meal- Beer

• Shopper KPIs• Shopping Channels• Shopper Profiling• Occasion Moments• Attitudes and Missions

71K-TEAM

Bottled WaterEnergy DrinksTonic Food DrinksAlcohol BeveragesSoft DrinksSoya MilkJuicesTeaCoffeeNon-dairy MilkOthers

SugarSaucesIce-creamInstant CerealCooking OilTaste EnhancersNoodles & SoupSnack & NutsConfectioneryCanned FoodPackaged BreadPastaOthers

Milk PowderLiquid MilkYoghurtButterMargarineCheeseCondensed MilkFermented YoghurtSpecialty MilkOthers

Beverages Packaged Foods

Dairy

Hair CareOral CareFacial CareBaby CareMake-upsSun ProtectionPersonal WashShaving ProductsHand & Body CareSanitary ProtectionDeodorant & FragrancesOthers

Toilet & Bathroom CleanerMulti-purpose CleanerDish Washing LiquidPaper ProductsInsect ProductsAir FreshenerDetergentFabric SoftenerBleachFloor CleanerGlass Cleaner

Personal Care

Home Care


Key Contacts

Fabrice CarrascoManaging Director of Kantar WorldpanelVietnam & PhilippinesAsia Strategic Projects [email protected]

Peter ChristouExpert Solutions [email protected]

Nguyen Thi Nhu NgocMarketing [email protected]

David AnjoubaultGeneral Manager [email protected]

Nguyen Phuong NgaNew Business Development Director [email protected]

73

Antoine Louat de BortAccount [email protected]

Nguyen Huy HoangCommercial [email protected]

Pham Quynh TrangInsight [email protected]

Le Thi Bach DuongAccount Director [email protected]

K-TEAM


Contributors

Fabrice CarrascoManaging Director of Kantar WorldpanelVietnam & Philippines

Asia Strategic Projects Director

Nguyen Huy Hoang

Commercial Director

Antoine Louat de Bort

Account Director

Nguyen Phuong Nga

New Business Development Director

Le Thi Bach Duong

Account Director

Peter Christou

Expert Solutions Director

Pham Quynh Trang

Insight Director

75K-TEAM

Vu Thi Thu Dung

Senior Account Manager

Ho Diem Phuong

Expert Solutions Manager

Le Thi Ha Nhi

Account Executive

Nguyen Ngoc Thuy

Marketing Trainee

Tay Cam Khanh LinhSenior Account

Executive

Tran Le Dung

Account Trainee

David AnjoubaultGeneral Manager of Kantar Worldpanel Vietnam

Nguyen Thi Nhu Ngoc

Marketing Manager

Vo Thi Kim Nhu

Associate Account Manager

www.kantarworldpanel.com.vn

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Insight Handbook 2019 - VIETDATA

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