retail in vietnam from greate to good

7/29/2019 Retail in Vietnam From Greate to Good

1/19

Vietnam

From Great to Good

1

Copyright 2011 The Nielsen Company. Confidential and proprietary.


2/19

Vietnam Today

Fundamentals arenot so great

Confidence and behavior changes A Tale of Two Consumers

Value is King

2


Its not all bad; opportunities await


3/19

1st Half 2011

Setting the Scene


4/19

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


= 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%


5/19

The most problematic factors for doing business

5


The Global Competitiveness Report 2011-2012 2011 World Economic Forum


6/19

Vietnams retail market attractiveness has slid further

GRDI Rank

2008: 02

2009: 06

2010: 14

2011: 23

2011 GRI country attractiveness

6


Source: AT Kearney Analysis

*) Based on weighted score of market attractiveness, market saturation

and time pressure of top 30 countries


7/19

Highest Inflation in Asiaand volume growth moderatesRegional Summary FMCG Growth Q1 2011

7


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


8/19

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


9/19

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


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


10/19

1st Half 2011

Vietnam Consumer Insights


11/19

81% of people are cutting spendingon Unnecessary items

Reduce Products for own consum tion

11


Source: Nielsen Personal Finance Monitor June 2011

*) Unnecessary items are subject to each respondents perceptions

(entertainment, eating out), but not

those for children & family


12/19

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


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


13/19

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


Source: Nielsen Shopper Trend 2010


14/19

14


Modern Trade


15/19

More Stores, More Importance

Modern Trade (exclude Metro Cash & Carry)

Store Numbers ACV Contribution

National : 752 826 National : 11% 13%

15


Source: Nielsen Retail Census 2009 and 2010


16/19


17/19

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

17


8

2

22

2

101

59

Source: Nielsen Retail Census 2010

2 Super MarketFood store

Convenient store

Health & beauty


18/19

In the face of current economic conditions, it is critical to understandwhat VALUEVALUE means to consumers

Promotion PricingLarge pack

sizes

Food for Thought

18


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:


19/19

Thank you

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19


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retail in vietnam from greate to good

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