Nielsen VN - Personal Finance Monitor Mid-year 2010

1

Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Personal Finance Monitor 2010Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Personal Finance Monitor 2010

PersonalFinanceMonitor

Mid Year - 2010

2



Vietnam is Heating Up!

• Healthy GDP grows in both urban & rural areas

• Vietnam is currently ranked equal #2 in the world on Nielsen’s consumer confidence index

• Business leaders continue to show bullish expectations for business growth over the next 12 months

• Well over 50% of total population is under 30 years old

3



Vietnam 2010 Estimates

Population 87 millions

MaleFemale

43.1 millions (49.5%)43.9 millions (50.5%)

Urban 2009Rural 2009

29.6%70.4%

GDP growth rate 5.5%Inflation rate 10%

Wage growth 12.3%

Key cities: •Ho Chi Minh•Hanoi•Haiphong •Danang•Nhatrang•Cantho

CanthoHo Chi Minh

Danang

Hanoi

Haiphong

Nhatrang

4



A ‘young’ population means an increase in purchasing power as it joins and progresses in the workforce

General Economy: PopulationSource: U.S. Central Bureau, International Database

0 1,000 2,000 3,000 4,000 5,000

0 - 4 5 - 9

10 - 1415 - 1920 - 2425 - 2930 - 3435 - 3940 - 4445 - 4950 - 5455 - 5960 - 6465 - 6970 - 7475 - 79

80+

010002000300040005000

FemaleMale Vietnam 2009Total Vietnam Population

Population under 30 years old: 56%

5



0

10,000

20,000

30,000

40,000

50,000

60,000

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

Labor force ('000 individuals)

Source: Government’s General Office of Statistics (www.gso.gov.vn)

This workforce will further fuel the GDP Per Capita in the coming years

402 440552

725835

1,0241,074

1,200

2000 2002 2004 2006 2007 2008 2009 Expected2010

GDP Per Capita (in USD)Labor force (‘000 individuals)

6



Consumer Confidence Index

7



113108 105

101 99 98 98 98 97 97 97 94 93 92 9288 88

79 78 7873 73

69 6863 61

119119113 112109 107

102 101

6559

5556 52

129

88 87 8785 84 84 81

71

0

20

40

60

80

100

120

140

160

IN ID VN PH NO SG CN AU BR CO CA HK AE MY NZ DK IL SE NL CH PK AR TH MX ZA PL RU FI US AT BE TW DE UA GB EG CZ TR IT ES IE HU FR EE LV KO JP LT

Global average

Changes 2H10 vs.1H10

2H 2010 Nielsen Consumer Confidence Index

Vietnam shows sharp consumer confidence re-gains and is ranked #2 top confident country in Q2.2010

2 3 18 2 -2 5 1 -3 -1 5 2 2 -2 1 0 5 1 4 3 5 2 2 -3 5 4 3 2 3 2 -2 -1 -1 7 2 -2 -17 -1 3 -4 -10 1 4 -5 -1 6 0 1 6▲ ▲ ▲ ▲ ▼ ▲ ▲ ▼ ▼ ▲ ▲ ▲ ▼ ▲ ▲▲▲▲ ▲ ▲ ▲ ▼ ▲ ▲ ▲▲▲ ▲ ▼ ▼ ▼ ▲▲ ▼ ▼ ▼ ▲ ▼ ▼ ▲▲ ▼ ▼ ▲ ▲ ▲

Base : All respondents n=26995

Vietnam - 2nd most confident

93

8



Business Barometer

9



Source: Nielsen Business Barometer

Vietnam’s Business Leaders show high growth expectations towards the total economy and their own business conditions

What do you think GDP growth rate will be for the next 12 months?What do you think your industry growth rate will be for the next 12 months?

5.0

10.2

11.3

5.7

13.6

4.9

0

2

4

6

8

10

12

14

Est. Next 12 months GDPgrowth rate

All industry est growth rate

%

2010 1st half

2009 1st half 2009 2nd half

4 5

17 14

1712

20

17

2131

23

11

0%

20%

40%

60%

80%

100%

2009 2nd half 2010 1st half

25%+

21% - 25%

16% - 20%

11% - 15%

6% - 10%

Less than 5%

What do you think your company growth rate will be for the next 12 months?

10



Tracked vs. 1 year ago, the workforce numbers are expected to increase to a good degree; which has a knock-on effect upon the manufacturers current concern of skilled labor shortage.

1 211

2

53

30

31

4

46

11

0%

20%

40%

60%

80%

100%

2009 1st Half 2010 1st Half

Increase significantly (5)

Increase somewhat (4)

Remain the same (3)

Reduce somewhat (2)

Reduce significantly (1)

Over the next 6 to 12 months, how do you anticipate your company's work force numbers to change?

11



Personal Finance Monitor

12



Research Design

Research Design• N=600 per month• HCMC / Hanoi

Primary source

Secondary sources

Respondent Criteria• Male & female• 18-50• HIB: ABCD• Decision makers

Methodology• Random sampling• F2F interviews

Nielsen Database

(2006, 2008, 2009)

Nielsen Regional Differences

Qualitative & Quantitative Studies

June 2009

General Statistics

Office

13



Despite all of the rapid changes and the positive indicators Vietnam is currently a very crowded financial market place with approaching 100 financial service suppliers operating.

http://www.mastercard.com/mcweb/redirect.jsp?mcref=%2Fmcweb%2Findex.jsp&mctar=%2Fmcweb%2FHome.do�

http://www.americanexpress.com/�

http://www.aig.com/gateway/home/1-73-0-0-index.htm�

14



Highlights

Debit & Credit cards see high levels of future

usage intention. Savings are still

largely untapped.

Half of the target remain unbanked

and amongst those around 50%

are either self-employed or have involvement in a

business

Customer service expectations are rising coupled

with an increase in multiple

account holdings

Highlights – Customers

Who to target?

Future Intentions

Keep your customers satisfied

Target Market is around 4 million

customers.50% of which are currently using

banking services

Triggers to attract new customers?

(*): target population from 18-50 years old in class ABCD residing

in Hanoi and HCMC.(Source: Nielsen database 2009)

A young urban population with

high internet penetration but still almost no

engagement with internet banking.

Why?

Internet

16



Transactional account

ATM/ debit card

Deposit/ saving account at bank

Loan services provided by banks

Foreign exchange service

Domestic money transfer/payment

International money transfer/Expatriates' inward remittance

Credit card

transaction account (without card)

Custody service

Other banking services

Banking Services – Awareness and Usage - Total

Aware Currently using Lapsed

Q9a - Which of the following FINANCIAL SERVICES are you aware of? [MA]Q9b - Which of the following FINANCIAL SERVICES did you ever use? (but stopped) [MA]

Q9c - Which of the following FINANCIAL SERVICES are you currently using? [MA]

Base: All Respondents (n=1800)

Awareness and usage are limited to some traditional banking services. More education of advanced products needs to be implemented.

100

100

99

99

87

79

54

40

36

23

16

36

36

16

4

3

5

1

1

1

0

0

5

5

6

5

7

5

2

0

0

0

0

Approaching 50% of our

sample have a bank

account

9% of them have both

transactional and time deposit account

17



Overall satisfaction towards main banks

Q17 – Using the following scale, please describe how satisfied you are with your main bank in each aspect. [SA]

There are some improvement areas in order to enhance customer satisfaction. These include more convenient opening hours, appealing promotions and superior services for VIP customers.

0 20 40 60 80 100

Total (n=891) HCM (A) (n=413)

HN (B) (n=478)

Staff's customer service (friendly, responsive)

Convenient opening hours

Quick and simple transactions and procedures

Staff's knowledge and ability to consult

Range of services/ products

Convenient transaction methods

Low service fee and competitive interest rate

Network of branches/ATM

Appealing promotion program

Facility at the transaction point

Superior services for VIP customers0 20 40 60 80 100 120

Under 35 yo (A) (n=530)

Over 35 yo (B) (n=361)

TOP 2 BOX – Strongly agree & Agree By region By age

Base: Bank users

B>A

A>B

B>A

B>A

B>A

B>A

A>B

B>A

B>A

B>A

18



2

17

81

14Banks

3Banks

2Banks

1 Bank

Number of Banks Used

Total(n=596)

U35(n=344)

O35(n=252)

Class AB(n=262)

Class CD(n=334)

At this stage many customers still only use a single bank but this is changing. Whilst switching is rare, secondary accounts are increasing.

2

13

84

1

1

22

77

0

3

23

73

1

1

12

87

0

Mean score 1.22 1.20 1.25 1.33 1.14

19



1st

2nd

3rd

Inconvenience – 45%

Procedures - 9%

Others – 23%4th

Poor customer service – 14%• No branch close to my house (30%)

• Not enough ATM’s (8%)

• Not convenient to use only one bank (5%)

Reasons for switching main banks

Q15 - Could you please let me know reasons why you stop using the service of your first bank?

• Staff are not enthusiastic (14%)

• Staff are not happy (9%)

• No demand (5%) • Complicated procedures (9%)

• ATM card is expired (9%)

20



Debit&

Credit Cards

21



ATM/Debit Card23%

(~0.9 mil people)

Credit Card1%

(~0.04 mil people)

• No demand• Knowledge

• InconvenienceDebit Card 24%

Credit Card 7%

• Broader coverage of ATM’s 71%

• ATM’s placed in Convenient and safe place 62%

• Safety of the card 52%• Issued by a trustworthy

bank 35%

Highlights – Cards

Future Intention

Reason for not using

Ownership

What could attract more customers?

(Source: Nielsen database 2009)

100

62

46

13

10

0

37

15

100

54

43

10

10

0

33

13

24

0

0

0

8

14

0

92

Card type awareness

* Base: Not Code 12 in Q9c

Awareness of both Debit and Credit cards has increased significantly over the past 5 years among the banks customers.

Q36a – Which kind of cards are you aware of?

ATM

Credit card

Debit card

Multi-functional card

Student associated card

Associated card

Integrated card

None of the above

21

0

0

0

9

8

0

91

2006 (n=1000)

2008 (n=1000)

Q2 - 2010 (n=891)*

2006 (n=500)

2008 (n=500)

Q2 - 2010 (n=413)*

2006 (n=500)

2008 (n=500)

Q2 - 2010 (n=478)*

19

0

0

0

9

5

0

91

Total HCM HN

98

23

15

0

0

2

0

0

99

22

15

0

0

1

0

0

97

25

13

0

0

3

0

0

100

32

35

2

8

0

23

6

2nd

No demand 59%1st

Reasons for no use – Credit Cards

3rd Inconvenience 13%

Key responses :

• No demand (majority)

• Already have ATM card

• Do not prefer use credit

Key responses:

-I am not qualified to open a account

-Complicated procedures

-Not many places accept card payment

Knowledge 31%

Q38R2: Could you please let me know the reason why you do not use/own any credit card?

Key responses :

• Do not know how to apply for

• Do not know much about this service

• Do not know much about the credit function

The same is primarily true for Credit Cards but with inconvenience being given more importance.

24



Lending

25



At bank: 11%Non-bank: 14%

From family: 66%From friends: 54%Own savings: 34%

Interest rate(67%)

Simple procedure (66%)

Offer unsecured loan(38%)

Bank loan 2%(~0.08 mil people)Non-bank loan 6%(~0.2 mil people)

Highlights – LendingOwnership

Sources for non-bank lending Triggers for

usage

Future Intention


26



Savings & Investments

27



Highlights – Savings & Investments


• Competitive interest rate 60%• Prestigious bank 56%• Highly recommended by others 52%• Good customer service 50%

Saving at non-bank sources 53% (~ 2.1 mil people). Saving at bank 10% (~0.4 mil people)

• Put money into my own business 61%• Gold trading 35%• Real estate 23%

Savings

Why I choose it as my main bank?

Main Banks

•ACB 21%• Vietcombank 14%• Agribank 14%• Sacombank 11%•Vietinbank 11%

Top 3 current Investment methods


28



Non-banking Savings

Q9a - Which of the following FINANCIAL SERVICES are you aware of? [MA]Q9b - Which of the following FINANCIAL SERVICES did you ever use? (but stopped) [MA]

Q9c - Which of the following FINANCIAL SERVICES are you currently using? [MA]

Base: All Respondents (n=1800)

85% of the target customers have savings that are not held in a bank. This suggests a lack of understanding of the benefits of using banks for these services.

Life insurance

Saving (not at banks)

Loans (from other sources apart from banks)

Investment (into real estate, securities, etc.)

100

99

95

91

Aware Currently using Lapsed

7

85

9

6

3

7

23

3

29



Insurance

30



Highlights – Insurance

• Life insurance• Educational • Accident

• Prudential 54%• AIA-AIG 25% (focus in HCMC)• Bao Viet 13% (focused in Hanoi)

Current use and most important

products Reason for Non-Owner Ship

Top 3 current Insurance Company

• Do not believe 48%• Have no knowledge 43%• Customer Service 41%

• Protection 74%• A form a savings 68%• Buying security 59%

Top Perception

31



Non-bank users

32



Barriers to banking?Barriers are largely around a perceived lack of value or convenience. Coupled with this is a reluctance to submit personal financial information.

Lengthy application procedures

63%

Valued pledged assets

required49%

High interest rates

38%

Financial evidence required

48%

Key Barriers to Banking

(n=909)

Q60 – Could you please let me know reasons why you do not use banking services?

Base: those who are not using banking services

Affordable interest rate

63%

Simpleapplicationprocedures

58%

No financial/ income

evidence required

38%

Prestigious banks39%

Potential Triggers

(n=909)

Q61 – Could you please let me know some factors that can help encourage you to use banking?

33



HCM(A) (n=470)

Non-Bank - Saving

Top ranked

Total (n=850)

Top ranked

HN(B) (n=380)

Top ranked

97

2222

I buy gold and save at home.

I buy foreign currency and save at home.

I save money at home

I buy insurance for myself and my relatives in case unexpected problems happen.

Q62 – Could you please rank those investment (which are the most 3 preferred investment)?

Base: those who are not using banking services and save at home

97 98 94

These potential customers are seemingly happy to continue to save money at home. How much money is out there?

242

98

2





13 2

94

1





B

B

Self-employed & Business owners

Base: Self employed people (n=663)

Transactional account

ATM/ debit card

Credit card

Time deposit saving account

Loan services provided by banks

Foreign exchange service

Domestic money transfer/payment

International money transfer/ Expatriates' inward remittance

Investment

Loans (from non-bank sources)

Saving (not at banks)

Life insurance

36

36

1

16

4

3

5

1

6

9

85

7

Bank services

Non-bank services

Bank usage amongst this group is far lower than the total target customers base despite their meeting the same target criteria.

Total Users (A) Non-users (B) Total Users (A) Non-users (B)(n=1800) (n=891) (n=909) (n=663) (n=240) (n=423)

77

75

2

34

8

5

10

3

6

6

74

9

0

0

0

0

0

0

0

0

6

12

95

4

20

19

0

14

4

2

4

1

9

11

88

8

58

56

1

41

11

5

12

4

9

7

76

9

0

0

0

0

0

0

0

0

9

13

95

7

Total target audience Total self-employed people

B

A

A

35



Banking Channels

36



9

4

50

36

37

42

4

16

Everyday Every other dayOnce a week 2-3 times a monthOnce a month Once every 2-3 monthsLess than once every 3 months

Transaction channels – Total

Bank counter

ATM machine

83

77

Q26a - In past 6 months, which channels have you ever contacted/done transaction deposit/withdrawal/transfer/payment? [MA]

Q26b - How frequently do you make a transaction by each method? [SA]

Branch usage remains high to meet the largely simple needs of most customers. Trust and confidence issues overcome any inconvenience.ATM usage for simple transactions has soared rapidly as customers become aware of the benefits, boding well for new channels.

0.18 times/ week

0.50 times/ week

Mean scoreChannels Frequency

Base: All respondents

37



Internet Access (% of population)

7

15

22 24

0

10

20

30

40

50

India Philippines China Vietnam

Internet usage in Vietnam is higher than many of its SE Asian neighbours and is growing significantly.

Source: Nielsen Omnibus Aug 2008 - Generation V Study

Nielsen Vietnam Mobile Insights Mar 2009

63

Malaysia

38



Source: Nielsen Omnibus August 2008

Internet Access (% of population)

In urban areas and amongst the under 30’s internet usage is extremely high.Around 50% of them access the internet ‘at least once per day’.

Q38: Use of Internet in the past 12 months

7

15

22 24

63

45

73

21

7

0

10

20

30

40

50

60

70

80

India Philippines China Vietnam Malaysia HCM &Hanoi

18-30 31-40 41-50

And yet despite this behaviour, Internet banking is still only used by around 1% of customers.

Personal Finance Monitor 2010 Q28 - Could you please let me know the reason why you do not conduct transactions by_________ (READ OUT EACH CHANNEL THAT IS NOT CHOSEN IN Q27 FOR TRANSACTION TYPES)?Base: All Respondents

Call operatorn=890

SMS bankingn=891

Internet bankingn=889

Bank countern=181

ATM machinen=185

Awareness (54%)

- Lack of awareness about this channel (37%)

- Don’t know how to use this channel (9%)

Safety (32%)

- I don’t feel secured (27%)

Inconvenience (11%)

No demand (5%)

Others (6%)

Awareness (52%)



Safety (32%)


Inconvenience (11%)

No demand (5%)

Others (4%)

Awareness (52%)



Safety (28%)


- Lack of trust (5%)

Others (13%)

- I don’t know much about the internet (6%)

No demand (82%)

Inconvenience (18%)

- Time consuming (10%)

No demand (80%)

- I don’t use ATM card (46%)

- I have no demand (34%)

Safety (13%)


- Afraid of losing money (5%)

Inconvenience (10%)

- Not convenient to do transaction (6%)

40



Q76 – What are the most 3 popular websites that you have visited during past 7 days? [MA]

Base: Those who choose code 4 in Q71a

vnexpress.net64%

24h.com.vn49%

tuoitre.com.vn48%

HCMC(n=309)

Hanoi(n=427)

Under 35(n=584)

Over 35(n=152)

dantri.com.vn73%

vnexpress.net60%

vnexpress.net62%

24h.com.vn63%

24h.com.vn57%

tuoitre.com.vn44%

vnexpress.net50%

dantri.com.vn38%

24h.com.vn41%

If you know who they are, where they spend their time and how often they go there, can you develop education and trust?

41



Summary – Vietnam is heating up!

• Education – one should not underestimate the lack of understanding that exists around banking products amongst many customers. Communication and education will be an essential part of building relationships with those groups currently untapped.

• Youth – Vietnam has a large, young population and the signs, across all sectors, are that they are increasingly exposed to new products and services and they are increasingly open to investigating them.

• Operations & Channels – the best brand promise in the world must be backed up by operational delivery. Be bold with your channel delivery. Almost 50% of business leaders in Vietnam said that the internet will see an increase in spend as a communications channel this year.

Nielsen VN - Personal Finance Monitor Mid-year 2010

Documents

Transcript of Nielsen VN - Personal Finance Monitor Mid-year 2010