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Vietnam
From Great to Good
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Vietnam Today
Fundamentals arenot so great
Confidence and behavior changes A Tale of Two Consumers
Value is King
2
Copyright 2011 The Nielsen Company. Confidential and proprietary.
Its not all bad; opportunities await
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1st Half 2011
Setting the Scene
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Challenges arose in late 2010 and hit hard in 2011: Growth vs Stability
Inflation is a Killer
21
%
5% 7%
1
2%
3% 8%
10%
16
%
17
%
2
9%
3%7%
Retail Sales
Growth
GDP Growth Inflation Unemployment FDI Growth Trade Deficit
4
Copyright 2011 The Nielsen Company. Confidential and proprietary.
= indicates health; = indicates challenges
Source: 2011 Estimation by Vietnam government;
GDP Growth, Inflation, CIEC: 2008-2009;Vietnam GSO
2011 Growth Estimation
5.8% 18.7%
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The most problematic factors for doing business
5
Copyright 2011 The Nielsen Company. Confidential and proprietary.
The Global Competitiveness Report 2011-2012 2011 World Economic Forum
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Vietnams retail market attractiveness has slid further
GRDI Rank
2008: 02
2009: 06
2010: 14
2011: 23
2011 GRI country attractiveness
6
Copyright 2011 The Nielsen Company. Confidential and proprietary.
Source: AT Kearney Analysis
*) Based on weighted score of market attractiveness, market saturation
and time pressure of top 30 countries
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Highest Inflation in Asiaand volume growth moderatesRegional Summary FMCG Growth Q1 2011
7
Copyright 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Retail Audit
Nielsen Consumer Confidence Index: Vietnam
106118 117
10697
85
109101
119
88103 98 97
0
20
40
60
80
100
120
140
2006
-Q1
2006
-Q3
2007
-Q1
2007
-Q3
2008
-Q1
2008
-Q3
2009
-Q1
2009
-Q2
2009
-Q3
2009
-Q4
2010
-Q1
2010
-Q2
2010-Q3
2010
-Q4
2011
-Q1
2011
-Q2
ASIA
Average
106
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Consumers, Companies Share Concerns
Top 5 Supplier / Mfr Concerns
1) Inflation
2) VND devaluation
3) Ability to pass on price increase
Top 5 Consumer Concerns
1) Health
2) Increasing food prices
3) Increasing utility bills(gas, electricity, water...)
$
$
8
Copyright 2011 The Nielsen Company. Confidential and proprietary.Source: Nielsen Business Barometer & Nielsen Omnibus March 2011
Which of the following issues concern you in terms of the impact they may have on your business? Rank thetop three issues that concern you where 1=most concern, 2=second most concern, etc...
4) Competitive pressure/Activity /growth
5) Low GDP growth
4) Job security
5) My children's future/ welfare
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Vietnam opportunities & challenges going forward
Fairly young & efficient labor
market
Infrastructure (quality of roads
and ports)
Opportunities Challenges
GDP Growth Inflation
6.5% 11%2012 Source: ADB
9
Copyright 2011 The Nielsen Company. Confidential and proprietary.
stage of development
Large market size (benefitsfrom a particularly large exportmarket)
(regulation is perceived as
burdensome with the number of
procedures and time required to
start a business)
Intellectual property protectionconcerns
CorruptionSource: GCI report 2011-2012
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1st Half 2011
Vietnam Consumer Insights
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81% of people are cutting spendingon Unnecessary items
Reduce Products for own consum tion
11
Copyright 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Personal Finance Monitor June 2011
*) Unnecessary items are subject to each respondents perceptions
(entertainment, eating out), but not
those for children & family
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Consumers claims Business Leader s opinions
2
12
51
41
41
50
64
Trade down to cheaper products
Not buy some 'non-essentials'
Purchase more on promotion
Business Leaders, Consumers Both Expect More Purchases onPromotion
12
Copyright 2011 The Nielsen Company. Confidential and proprietary.
Q.33 - 16
Source: Nielsen Omnibus March 2011; Nielsen Business Barometer 1stH -2011
22
10
31
41
27
32
32
Change channel to save money
Buy less / smaller packs of the
same products
Purchase more local/ Vietnamese
brands
S1-2011
S2-2010
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PRICE
Price of private label is 15 30%
lower compared to brands
Private Label Awareness
Key Private Label Categories
Private Label Goods Gaining Ground
13
Copyright 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Shopper Trend 2010
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14
Copyright 2011 The Nielsen Company. Confidential and proprietary.
Modern Trade
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More Stores, More Importance
Modern Trade (exclude Metro Cash & Carry)
Store Numbers ACV Contribution
National : 752 826 National : 11% 13%
15
Copyright 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Retail Census 2009 and 2010
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Local Players Dominate but Increasing International Presence
51
22 322
15
7
16
13 14 15 5
STORE NUMBER OF KEY PLAYERS UPDATED TO SEPTEMBER 2011
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Copyright 2011 The Nielsen Company. Confidential and proprietary.
8
2
22
2
101
59
Source: Nielsen Retail Census 2010
2 Super MarketFood store
Convenient store
Health & beauty
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In the face of current economic conditions, it is critical to understandwhat VALUEVALUE means to consumers
Promotion PricingLarge pack
sizes
Food for Thought
18
Copyright 2011 The Nielsen Company. Confidential and proprietary.
Expansion
to
secondary/
rural areas
Expansion to
modern trade
channel
Vietnamize
your brands
Brand
portfolio
Continue to invest to secure long-term growth future for your brands:
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Thank you
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