Market research top-line Mar 2011

How inflation affects on consumption’s behavior and

consumers’ attitude

HIGHLIGHTS:

HCMC HA NOI DANANG

About Viettrack is a monthly research news-letter developed by FTA Research & Consultant,

the representative of ESOMAR in Viet Nam. It is conducted base on a monthly

research. It aims at delivering comment, evaluation and true feeling of research

objects about present time’s economic situation as well as promotion campaigns or

products to producers and marketers. It is expected to help them understand to offer

better service to unsatisfied demand of consumers.

Viettrack is done according to ISO 20252:2006, the international quality standard in

market research and ESOMAR Code of Conduct.

Viettrack Mar 2011 is conducted on general population (18-50) in 3 largest cities of

Vietnam (Hochiminh, Hanoi, Danang) with N=600. This study aims at finding how

inflation affects on consumption’s behavior and consumers’ attitude in 2011. Thus,

this information will help marketers to have some suitable adjustment in their

strategy in the current situation.

Inflation & consumer attitude

Inflation impact

Almost consumer in HCM, HN and Da Nang is affected by inflation.

The group is affected more than others is: o Who live in Da Nang. o Older age (41-50). o Married .

Da Nang Location?

41-50

Age group?

Married Status?

Sensitivity group

Total HCM HN Da Nang 18 - 30 31 - 40 41 - 50 Single Married

2.48 2.41 2.46 2.56* 2.43 2.46 2.58* 2.41 2.52* Mean

600 200 200 200 268 162 170 244 356 N=

%

Note: (*) is significant difference at 95% confidence interval / Lưu ý: (*) là khác biệt có ý nghĩa ở 95% độ tin cậy

Economic information follow up

Total HCM HN Da Nang Male Female Class A Class B Class C Class D

3.15 3.14 3.00 3.33* 3.22 3.12 3.19 3.20 3.21 3.07 Mean

600 200 200 200 300 300 134 158 172 136 N=

Almost consumers in 3 cities follow inflation information frequently. Inflation seems

be one of the hottest issues right now.

Just some don’t pay much attention to the economic situation. They are:

Ha Noi people (26%)

Female (22%)

Class D (23%).

Note: (*) is significant difference at 95% confidence interval/ Lưu ý: (*) là khác biệt có ý nghĩa ở 95% độ tin cậy

Ha Noi (vs DN: 11%, HCM: 20%)

Female (Vs Male:16%)

Class D (Vs BC:17%, A 20%)

26%

22%

23%

%

Social and economic concern

Top concern: the economic situation which impact on

consumer’s life directly and immediately. They are: price

increase in electricity, food, oil, gas, gold and economic

depression.

Less concern: social situation – long term issues including

unemployment, corruption, nature disaster, climate changing.

Not concern: safe and security problems including crime

increasing, terrorism…) and absolute pays no worry about

political instability in Middle East, Korean war, foreign

currency aid cuts. Vietnamese doesn’t pay attention to world

issues, which don’t affect their life directly.

Electricity price increase

Food price increase

Economic depression

Oil price increase

Gold price increase

Unemployment

Gas price increase

Corruption

Natural disasters

USD-VND Ex-rate increase

Climate changing

N=600

% Total

Consumers are losing their confidence in Vietnam economy. Almost think that it will keep the same (48%)

or worse (36%).

Consumer confidence

HCM

41 - 50

31 - 40

Class A

Married

Total average

HN

Single

Da Nang

18 - 30

Da Nang

18 - 30

Single

Total average

41 - 50

Married

31 - 40

Class A

HCM

HN

Pessimistic

Optimistic

o Pessimistic group : • Living in HCMC • Older age group (31-50) • Class A • Married

o Optimistic group • Living in Da Nang. • Younger age group (18-30). • Single

%

%

Inflation & consumption’s behavior

In general, almost use their spare money in bank saving service first then

buying gold – the low risk areas right now. However, Danang people prefer

buying gold (48%) to bank saving (33%).

Investment/Uses spare money

Bank saving

Buy gold

Invest in business

Invest in real estate

Buy USD

Invest in security

Total Da Nang

N=600 N=200

%

Expenditure

65

62

57

55

45

44

29

25

20

18

15

9

29

31

34

37

42

47

59

42

42

68

57

64

6

7

9

8

13

10

12

33

38

15

28

27 % Total HCMC HN DA NANG

Education Foods&Drinks

Healthcare Transportation

Electric, waters Communication Home appliance

Entertaiment Beauty Clothes

Luxury goods Travel

Giảm Bình thường TăngN = 600 200 200 200

As this inflation situation, activities that consumer has to cut down are traveling, luxury products, clothing, beauty care

service, home appliance, entertainment, telecommunication (telephone, internet).

Necessities products/ services are the group they cannot reduce including education, transportation, food & beverage,

electric, waters, healthcare services.

Hanoi people cut down budget across categories.

60

57

53

52

37

38

30

22

21

11

14

7

25

29

29

38

40

50

58

39

30

65

44

57

15

14

19

10

24

12

13

39

50

25

43

36

63

60

56

57

45

47

23

24

21

23

18

15

36

37

42

39

51

44

63

61

67

74

74

79

2

3

3

4

5

10

14

16

13

4

8

7

72

72

63

57

54

47

36

31

20

20

13

2

25

25

31

34

35

46

55

26

30

64

55

52

2

3

6

9

11

7

10

44

51

16

33

46

In the inflation, consumer trends to switch shopping channel from modern trade (supermarket, hyper market,

convenience store, etc.) into wet market. They especially shopping more when having sales promotion.

Shopping habit

Total

N=600

Shopping at wet market

Shopping when having sales promotion

Shopping at grocery store

Shopping at hypermarket

Shopping at supermarket

Shopping at convenience store

Shopping at fair, exhibition

%

Consumers reduce almost entertainment activities including watching film, music, eating out and party, drinking.

Daily activities

Total/tổng cộng

N=600

Using electric utilities

Using internet

Go out for coffee

Go out for eating

Using air condition

Party, drinking

Watching film, music, play

Laudry

% Mean

1.67

1.64

1.60

1.48

1.45

1.43

1.34

1.21

Confectionary, products from milk, skincare products are the categories could be hurt in the

inflation.

FMCG consumption

Total

N=600

Seasoning product

Personal care product

Baby care

Cleaning products

Skincare products

Products from milk

Confectionary/

% Mean

1.92

1.91

1.90

1.88

1.75

1.71

1.57

Except confectionary, almost consumers are loyal with their most often use

brand.

FMCG brand choice

Total

N=600

Baby care

Seasoning product

Cleaning products

Personal care product

Skincare products

Products from milk

Confectionary

% Mean

1.96

1.95

1.93

1.93

1.93

1.91

1.84

FMCG pack size choice

Not much change in pack size choice. consumer trends to purchase the normal or smaller pack size

for confectionary, skincare products, products from milk and babycare product only.

Total

N=600 Cleaning products

Seasoning product

Personal care product

Baby care

Products from milk

Skincare products

Confectionary

% Mean

2.01

2.00

2.00

1.95

1.91

1.84

1.74

Conclusion

Conclusion

In general, the high inflation rate situation at the beginning of 2011 affects all 3

largest cities of Vietnam (HCMC, Hanoi, Danang). Their confidence in Vietnam

economy seems be losing their confidence people may be more careful with

money spending in near future.

The most concerns are the economic situation including price increase in electricity,

food economical fuel/ electricity consumption products could be welcome at this

time.

They would like to use their spare money in bank saving service first then buying

gold those would be safe more than high profit (invest in business and real estate or

stock).

Conclusion

Living in the inflation, consumer has to cut down some expenditures which is not

necessaries. FMCG seems be not affected (except confectionary) and consumers are

loyal to FMCG brand and pack size they use most often to survive this period,

confectionery should be more active.

The shopping channel is change as consumers switch from shopping at modern trade

into wet market should consider to focus on branding and brand activation at wet

market and GT.

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