Vietnam Advertising industry 2009

8/7/2019 Vietnam Advertising industry 2009

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VIETNAM: UNDERSTANDING OUR OPPORTUNITY


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What youWhat youll see todayll see today

Summary

An overview of a nation

Economic growth

Population trends

Advertising spending and industry growth

Implications and observations


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SummarySummary

Vietnam is a young and developing market, displaying many of the signs ofstrong potential:

A young and vibrant population Industrial growth and a rising GDP

However, the economic environment has slowed growth from the optimisticpredictions of just a few years ago.

But the advertising/communications industry seems ripe for growth as thepopulation becomes more sophisticated in their buying behaviour andincreased penetration of new media.


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Source: Wikipedia

There is amazing potential hereThere is amazing potential here

With a population of over 86 million, Vietnam is the 13th most populouscountry in the world!

And with one of the youngest populations in Asia - more than half the

population under the age of 30, they have decades of spending to go Vietnam is also one of the worlds youngest markets in other ways havingonly begun economic reform in 1986

1 of the fastest growing IT markets and top ten globally - IDC

Vietnam is young, hungry for growth and exposed to the the progress in other

nations which only reinforces their desire for progress.


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Source: Susan J. Adams, PhD - college ofeconomics, Vietnam National University,

Hanoi

But the shine is starting to dullBut the shine is starting to dull

Vietnam will remain one of the fastest growing economies in the world, but will fallshort of its initial medium-term plans to grow 7-8 percent per year to achieve theMillennium Development Goals by 2015.

Vietnam was growing faster than the rest of the world, but now will see about 2-2.5 percentage points less of GDP growth in the next two years.

It is predicted that export growth will weaken. Vietnam was inflating at double digit rates, but the economic slowdown will enable

Vietnam return to single digit inflation. Trade and budget deficits are high but expected to drop in 2009

Due to the cash economy here (little reliance on credit), the global economic crisis has

been slower to Vietnam as weve needed to wait until MNCs reduced theirinvestment level to see an impact. As such, recovery is expected to follow thesame pattern.


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Source: TNS "Vietnam- Emerging Tiger"

report, 2009

A closer look at the populationA closer look at the population

While the population is still heavily rural (73%), GDP is growing at a rapidpace.

Since 2006, GDP has grown by over 25%

Growth in the highest income segments (A&B) has tripled between 2001and 2008

And socially, they are ready to grow

They are one of the worlds most optimistic populations and the first in Asia

And one of the worlds most literate populations - 94%


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Source: Nielsen Vietnam Business Barometer

2009

In the next 12 18 months, to what extent will you look to rural Vietnam areas to drive your companygrowth?

64% 64%

There is optimism about rural growthThere is optimism about rural growth


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A 1st world economy within decades?A 1st world economy within decades?


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Sources: Wage growth, 2007 Economic Intelligence Unit , 2008-9 HRBS Asia-Pacific Pay Increase Guide 2009 (Survey Period: Jan 6 toFeb 6, 2009) ; Consumer Confidence, Nielsen Global Online Survey 2007-8; GDP Growth ; Inflation, 2006-2007 data from IMF

And CIEC: 2008-2010 IMA Asia Brief December 2008; Unemployment , 2007 est. 2008 CIA. ; FMCG Growth, NielsenVietnam Retail Audit.

GDP Growth

+6.2%2008

+5%2009E

+ 8.5%2007

+8.5%2007

+23%2008

Inflation

+11%2009E

+ 11.22007

+42008

+102009

Wage Growth

Unemployment

5.1%2007

4.3 %2008

5 %2009

+102007

+ 42008

+ 92009 Feb

FMCG Growth

+22007

June 08

Consumer Confidence

Nov 08

-11

-9

118 points

106 points

Rank 9th globally

97 points

Despite inflation, Vietnam is enjoying growth!Despite inflation, Vietnam is enjoying growth!


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HOW IS THIS IMPACTINGCONSUMER BEHAVIOR?


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Source: TNS Consumer Confidence Poll

Jan. 09

Shifting prioritiesShifting priorities

Whether its the economy or a spending conscious environment, there is animpact on the populations outlook.


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Source: TNS Consumer Confidence Poll -

Jan. 09

Despite negative trends, consumers are positiveDespite negative trends, consumers are positiveabout their standard of livingabout their standard of living


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Jan. 09

Will you reduce spending this year?Will you reduce spending this year?

And yet, according to the General Statistics Office of Vietnam, In Q1 of thisyear, retail sales are up by 21.9% equivalent to 6.5% in real terms yr-on-yr


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Jan. 09

Where are spending decreases predicted?Where are spending decreases predicted?


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Food price increases is the biggest concern forFood price increases is the biggest concern forconsumersconsumers

Q40: To what extent are you concerned about the following?Base: All respondents (n= 300) HCM= HN= 150

Consumers General Concerns

Global economy

Saving

Low increase in salary

How to take care of my children

How to develop own business

Future of my children

Price increase in petrol

Pollution

Price increase in daily food

Nielsen Vietnam Omnibus 2009


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2009

Total(n=61)Do you anticipate that Vietnamese consumers will change theirpurchasing behaviour next 6 to 12 months?

Expected changes in consumers purchase behavior

Which industry do you think will be impacted the most?

Categories most affected

How are businesses feeling about the market?How are businesses feeling about the market?


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2009

Total Market Your IndustryOver the next 6 to 12 months, do you believe that business conditions in the total market & your industry aremore likely to improve or deteriorate?

But businesses are expressing confidence inBut businesses are expressing confidence inthemselves!themselves!


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2009

Note: IA = Industry Average

*

Company versus Industry average growth rate (next 12 months)

Manufacturers are showing optimism aboutManufacturers are showing optimism aboutgrowthgrowth


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2009

Over the next 6 to 12 months, how do you anticipate your company's hiring of staff to change?

27% 27%

And their hiring plans will help spur economicAnd their hiring plans will help spur economicgrowth!growth!


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INDUSTRY FORECAST


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Advertising spend breakdownAdvertising spend breakdown


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Advertising is a growing industry here!Advertising is a growing industry here!


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Online spending (000) is growing!Online spending (000) is growing!


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2009

Over the next 6 to 12 months, how do you anticipate your company's spend on advertising tochange?

39% 39%

Businesses have mixed opinions on advertisingBusinesses have mixed opinions on advertisinggrowth thoughgrowth though


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Implications and observationsImplications and observations

While Vietnam continues to be seen as a high-potential growth market,businesses are displaying caution.

Unwilling to risk larger investment the way they did a few years ago

Wary of financial commitments

But at the same time, this caution is allowing new entrants into the market suchas Beeline (a new mobile telecom) and Zest ( a wireless internet provider)who are aggressively marketing themselves. I believe this will also spur themarket as advertising standards of quality grow and push many of the low

end competitors out of contention.


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THANK YOU

Vietnam Advertising industry 2009

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