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Transcript of Vietnam economicoutlook doom_or_boom_march5
Confidential & Proprietary • Copyright © 2008 The Nielsen Company
Confidential & Proprietary • Copyright © 2008 The Nielsen Company
Boom or Doom in Vietnam in 2009?
March 2009
Vietnam – Boom or Doom in 2009? Page 3 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Agenda
• Setting the scene and Vietnam outlook
• Consumer behavior over Tet 2009
• Vietnamese consumer concerns and thoughts on the economy. How are consumers reacting?
• How could Vietnamese consumer behavior change in the 6 months
• Key findings & implications
• Driving growth in 2009
Vietnam – Boom or Doom in 2009? Page 4 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Research design
• Nielsen Omnibus – Urban (HCM & HN): Monthly – Urban & Rural: Quarterly
– Sample Size: 300 – HCM 150, HN 150
– Fieldwork: 15 – 24 Jan, 2009
–Methodology – Face to face recruitment & interview – Pen and paper administration
– Criteria – Male and female (50/50%) – Aged 18 to 50 – All SEC/income levels
• Nielsen Retail Audit up to December 2008
Vietnam – Boom or Doom in 2009? Page 5 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Setting the scene
• Vietnam has one of the fastestexpanding economies in the world (second only to China) with growth averaging 7.5 % a year since 2000.
– November 2008 – 9 th most confident consumers globally (declined from 7 th ranked in 1 st half 2008)
– Total FMCG (6 cities) – + 20% value growth in Dec 08 vs year ago (+35% June to Oct 2008) – + 4% volume growth in Dec 08 vs year ago
– 2008 AT Kearney report – Vietnam most attractive retail market (ahead of India, Russia, China & Egypt)
Vietnam – Boom or Doom in 2009? Page 6 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Vietnam’s GDP growth has been strong
7.3 7.8
8.4 8.2 8.5
6.2 6.5
0
1
2
3
4
5
6
7
8
9
2003 2004 2005 2006 2007 2008 2009
Vietnam Real GDP Growth % 2003 2008
Source: 2003 2008 figures from Asia Development Bank
•Real GDP growth %
Vietnamese Government Forecast, March 5, 2009
Vietnam – Boom or Doom in 2009? Page 7 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
In 2009 Vietnam GDP growth will slow to…
• GDP growth fell in 2008: 6.2% vs. 8.5% in 2007
• IMF predicts Vietnam’s GDP growth in 2009 will slow to 5%, whilst the Vietnamese Government predicts between 6.57.5% (By comparison, IMF predicts world growth to slow to 0.5% in 2009)
• Vietnamese Government preparing a stimulus package up to $6billion which is equal to around 7% of 2009 GDP. Source: IMF
Vietnam – Boom or Doom in 2009? Page 8 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Vietnam inflation peaked in August and has since slowed
14.8
24.2
27.9 28.3 27.0 26.8
25.2
21.4 19.4
15.7 14.1
8.5
27.6
17.5 19.9
0
5
10
15
20
25
30
2007 total
Jan08
February
March April May June July
August
September
October
November
December
Jan09
February
March
Vietnam CPI YOY 2007 February 2009
Source: IMF, ADB and Bloomberg News
Vietnam – Boom or Doom in 2009? Page 9 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
7.5 8.5
23
11
7
0
5
10
15
20
25
2006 2007 2008 2009 2010
Source: 20062007 data from IMF and CIEC: 20082010 IMA Asia Brief December 2008
Inflation returning to manageable levels in 2009 Vietnam CPI YOY % 20062010
*2009, 2010 forecasts
May be reforecast lower in coming days (March)
Vietnam – Boom or Doom in 2009? Page 10 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Vietnam Outlook
• Vietnam’s attractiveness is high & growth opportunities are abundant
• Vietnam’s potential to develop and grow remains
•Half the population is under 30 years old = lower cost of labor + high consumption demand will help fuel growth
• Tourism grew in 2008 4.3mil tourists (up 100,000 v. 2007); $3.5bil revenue (up 7% YoY)
• Trade and budget deficits are high but expected to drop in 2009
Vietnam – Boom or Doom in 2009? Page 11 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Consumer behavior over Tet 2009
Vietnam – Boom or Doom in 2009? Page 12 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Average spend over Tet in HCM around VND 3.5 mil…but almost VND 5 million in Hanoi.
Q23, Q24: How much do you usually spend on Tet holiday for household usage, for gifts? Base: All respondents (n= 300)
Average spending at Tet VND 000s (Household usage and gifts)
ABCSig @95%CL
850 813 959
2,950 2,690
3,720
0.00 Household Gifts
Total (n= 300) HCM (A) n= 150 HN (B) n= 150
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 13 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Almost 50% spent less this Tet compared to previous years
Q17: Compared to previous years, how much money are you spending in the lead up to this Tet holiday? Base: All respondents (n= 300)
ABCSig @95%CL
4 3
45 41 54
43 45 36
9 9 8 1 1 1
0%
20%
40%
60%
80%
100%
Total (n= 300) HCM (A) n= 150 HN (B) n= 150
Much less A little less Same A little more Much more
Spending at Tet (Household usage and gifts)
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 14 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Why did consumers spend less this Tet? Consumers claim things are more expensive and they have less money to spend.
74
39
21
20
13
13
Things are now more expensive
My family has less money to spend
I must save more, be more cautious in spending
Everyone is cutting down their expenses
I'm afraid the economy will be worse next year
I have no/ little salary increase this year %
Total (n= 148)
Q18: What are the main reasons you are spending less in the lead up to this Tet holiday compared to previous years? Base: Those spending less (n= 148)
71
35
22
21
18
19 %
HCM (A) n= 66
82
49
18
18
2
%
HN (B) n= 82
Reasons for spending less this Tet
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 15 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
One third of households spent less on key FMCG categories…except Food.
Q21: On this Tet, is the amount you purchase less, the same or more than you did on Tet holiday 1 year ago for household usage? For gifts? Base: All respondents (n= 300) HCM= HN= 150
Changes in Spending at Tet
34
31
33
30
19
32
11
53
59
57
56
69
60
75
12
9
9
14
11
7
5
1
1
1
1
1
10
Less than 1 year ago Same amount as 1 year ago More than 1 year ago Don't know
23
20
18
2
8
6
13
38
52
39
7
10
24
19
10
7
6
3
1
4
9
30
21
37
87
80
66
60
Beer
Confectionery
Beverage
Clothing
Food
Tobacco
Others
Household Gifts
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 16 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Leading up to Tet 2009 consumers spent less on eating out, going to bars/coffee shops and entertaining at home
Q35: How you have spent on each of the following entertainment activities in the lead up to Tet holiday, compared to previous years? Base: All respondents (n= 300) HCM= HN= 150
Changing in spending
2
24
9
27
83
7
30
15
3
45
15
62
30
55
39
22
2
28
15
20
51
6
1
1
1
2
7
1
Don't usually spend on this Did not spend on it this year I spent less I spent the same amount I spent more
Travelling overseas
Travelling within Vietnam
Hold parties/ eating at home
Going to pubs/bars/coffee shops
Going to movies/ concerts
Eating out
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 17 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Consumers claimed to spend less on all channels, particularly Modern trade & wet markets over Tet
Q36: How are you spending on each of the following retail channels in the lead up to Tet holiday, compared to previous years? Base: All respondents (n 300) HCM= HN= 150
Spending at Retail channels
38
35
23
57
58
63
5
7
14
Spending less on this channel Spending the same on this channel Spending more on this channel
Total HCM HN
36
34
28
60
58
57
5
8
15
Modern trade
Wet market
Grocery stores
46
38
9
48
59
81
6
3
11
Total (n= 300) HCM (A) n= 150 HN (B) n= 150
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 18 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Overall 80% of consumers said they did not change pack sizes for Tet given tighter economy.
Q37: Overall have you changed the size of the packs you have been purchasing in the lead up to Tet, compared to previous years? Base: All respondents (n= 300) HCM= HN= 150
80%
18%
2%
85%
14% 1%
No, I have not changed the size of the packs Yes, I tend to buy smaller packs Yes, I tend to buy larger packs
66%
29%
5%
Total HN HCM
ABCSig @95%CL
Total (n= 300) HCM (A) n= 150 HN (B) n= 150
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 19 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Consumers are paying more attention to price than before…40% in HCM & 28% in Hanoi
Q39: Overall what would you say about your consciousness towards the price of goods in the lead up to Tet compared to previous years? Base: All respondents (n= 300) HCM= HN= 150
51%
37%
12%
44%
40%
16%
Always conscious of price Paying more attention to price than before Just buy what I need, regardless of price
70%
28%
2%
Total HCM HN
ABCSig @95%CL
Total (n= 300) HCM (A) n= 150 HN (B) n= 150
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 20 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Vietnamese consumer concerns and thoughts on the economy
Vietnam – Boom or Doom in 2009? Page 21 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
It’s not doom and gloom in Vietnam. 45% say Vietnam’s economy is worse than 6 months ago. Only 55% say world economy is worse.
Q30, Q31: How would you rate the Vietnamese economy/ other major economies around the world, compared to 6 months ago? Base: All respondents (n= 300)
ABCSig @95%CL
10 13 2
35 30 48
27 31 18
25 23 33
3 4
0%
20%
40%
60%
80%
100%
Total (n= 300) HCM (A) n= 150 HN (B) n= 150
A lot worse A little worse Same A little better Don't know
Vietnam’s economy
18 14
29
37 37
37
24 28
14
15 14 20
5 7 0
0%
20%
40%
60%
80%
100%
Total (n= 300) HCM (A) n= 150 HN (B) n= 150
The world’s economy
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 22 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Consumers believe Global Economic Crisis is driving inflation and unemployment in Vietnam
Q32, Q33, Q34: Impact of other economies on Vietnam Base: Those saying Vietnam’s economy is impacted (n= 247)
77%
12%
11%
Yes No Don't know
Impact on Vietnam Nature of impact
2
11
86
Don't know Positive Negative
Reasons for Negative evaluation
Most important drivers (overall) % Inflation 51 Unemployment 46 Causing crisis to Vietnam's economy 18 Causing Vietnam's export to decline 14 Causing currency to devalue 14
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 23 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Food price increases is the biggest concern for consumers
Q40: To what extent are you concerned about the following? Base: All respondents (n= 300) HCM= HN= 150
Consumers’ General Concerns
1
3
1
1
16
8
8
10
12
11
10
8
6
52
54
47
42
39
37
38
38
33
29
38
46
46
49
51
53
54
61
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
Not concerned at all Somewhat not concerned Neutral Somewhat concerned Very concerned
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 24 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
How are consumers reacting?
How could Vietnamese consumer behaviour change in the 6 months
Vietnam – Boom or Doom in 2009? Page 25 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Overall FMCG growth rate has slowed since mid 2008, but volume is still up by 4.5% v. 2007 and value growth is above 20% YOY Total Defined FMCG Volume & Value Growth : Vietnam Total 6 Cities
Nielsen Vietnam Retail Audit 2007 2008
27.0
11.1
30.7
14.8
20.1 17.9
13.4 14.2 13.2
11.7
5.6 4.1
38.7
24.2
43.5
28
32.6 33.8
36.2 38.1
35.1 33.5
26.2
20.6
JAN07 FEB07 MAR07 APR07 MAY07 JUN07 JUL07 AUG07 SEP07 OCT07 NOV07 DEC07 JAN08 FEB08 MAR08 APR08 MAY08 JUN08 JUL08 AUG08 SEP08 OCT08 NOV08 DEC08
Volume Sales Volume Growth v.s YA Value Growth v.s YA
Vietnam – Boom or Doom in 2009? Page 26 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
FMCG Department Volume % Growth vs YA (Vietnam Top 6 cities)
Beverages growth has remained strong whereas growth for other departments has tapered
Nielsen Vietnam Retail Audit 2008
21.7
8.5
31.3
13.0
18.6
14.5
5.7 6.7 7.8
3.8
4.8 4.1
10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
JAN08 FEB08 MAR08 APR08 MAY08 JUN08 JUL08 AUG08 SEP08 OCT08 NOV08 DEC08
10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
FMCG Personal Care Household Care Food Beverage Cigarette
Vietnam – Boom or Doom in 2009? Page 27 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Fast Food and CSDs potentially the hardest hit in the next 6 months amongst Food categories, according to consumers
Q43: Please tell us about your spending behavior in the next 6 months, regarding the following categories? Base: All respondents (n= 300)
Total spending
1
4
1
9
12
18
5
9
32
46
42
21
78
50
36
31
67
11
9
4
5
6
1
2
Do not spend money on this Will spend significantly less than usual Will spend a little less than usual Will spend the same Will spend a little more than usual Will spend significantly more than usual
Vegetables
Milk products
Carbonated soft drinks
Fast foods
Foods and drinks (in general)
60%
58%
41%
10%
26%
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 28 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
All nonfood categories will be impacted in next 6 months according to consumers
Q43: Please tell us about your spending behavior in the next 6 months, regarding the following categories? Base: All respondents (n= 300)
Total spending
17
7
7
11
24
23
25
12
47
33
48
40
54
36
23
19
23
29
6
3
3
4
5
1
Do not spend money on this Will spend significantly less than usual
Will spend a little less than usual Will spend the same
Will spend a little more than usual Will spend significantly more than usual
Clothes
Facial care
Electronic items
Household items
Shopping (in general)
66%
57%
71%
65%
58%
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 29 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Vietnamese consumers also expecting to spend less on utilities in next 6 months
Q43: Please tell us about your spending behavior in the next 6 months, regarding the following categories? Base: All respondents (n= 300)
Total spending
2
11
5
6
5
48
44
49
41
37
49
41
47
4
3
4
41
Do not spend money on this Will spend significantly less than usual
Will spend a little less than usual Will spend the same
Will spend a little more than usual Will spend significantly more than usual
Phone bills
Fuel
Electricity
Utility (in general)
49%
55%
46%
59%
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 30 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Decrease in spending on entertainment likely in next 6 months
Q43: Please tell us about your spending behavior in the next 6 months, regarding the following categories? Base: All respondents (n= 300)
Total spending
3
7
32
81
27
2
17
38
32
13
48
28
29
37
24
4
20
48
50
17
10
1
4
20
1
1
2
2
4
Do not spend money on this Will spend significantly less than usual
Will spend a little less than usual Will spend the same
Will spend a little more than usual Will spend significantly more than usual
Newspapers/ magazines
Going out (clubbing/ karaoke/...)
Cinema
Traveling (overseas)
Traveling (domestic)
Entertainment (in general)
56%
68%
76%
46%
75%
17%
Nielsen Vietnam Omnibus 2009
Vietnam – Boom or Doom in 2009? Page 31 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Key findings • Vietnam’s Economic Impact on FMCG
– Overall Vietnamese consumers are more confident compared to other countries. – 37% of consumers said they will NOT spend less this year as most are concerned with price increases.
– FMCG growth rates have slowed slightly…but are still stronger relative to most other countries
• More than half intend to spend less in next 6 months on Fast Food, CSD and nonfood categories
• Majority think global economic crisis is having a negative impact on Vietnam…but not all consumers! – Particularly inflation & unemployment
• Biggest concern for consumers is the price increases for daily food
• Consumers intend to spend less on eating out & going to bars / coffee shops
• Overall Vietnamese consumers more price conscious and understandably more cautious…particularly for non essential items… but they are still positive!
Vietnam – Boom or Doom in 2009? Page 32 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Warren Buffet said “By year end, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.”
But… he wasn’t talking about Vietnam!
• Whilst Vietnam is not immune to the global economic and financial woes, we don’t know how or if Vietnam will be hurt
• Vietnam has been recognized with Full Market Economy Status by Australia and New Zealand before the 2009 March ASEAN summit
• Many growth opportunities exist in Vietnam TODAY
Vietnam – Boom or Doom in 2009? Page 33 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company
Driving growth and market share in 2009
• Significant growth opportunities remain in Vietnam for most FMCG categories
• Companies who continue to invest and innovate will secure a strong long term future when the economy improves
• Now is a time to build brands and consumer loyalty. Cutting advertising and promotion spending will dilute your brand equity. In a developing market like Vietnam think long term, not short term
• During tougher economic times it is critical to offer value to consumers – remind them why your brand should be part of their household repertoire
• Many high growth opportunities exist in Vietnam – evaluate your current distribution coverage to identify new channels or geographies to drive growth
• Focus on big wins – rationalise your range to maintain a focused offer to best meet the needs of each key consumer segment
• Continue to invest to secure a strong long term position for your brands.
Vietnam – Boom or Doom in 2009? Page 34 March 2009 Confidential & Proprietary
Copyright © 2008 The Nielsen Company Confidential & Proprietary • Copyright © 2007 The Nielsen Company
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