Nielsen grocery report 2012

1
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Vietnam Grocery report 2012
GROCERY
REPORT
Vietnam
2012

2
Market Channels Shoppers
MACRO-
ECONOMIC
OUTLOOK
|
FMCG
OVERVIEW
RETAIL NOW
&
THE FUTURE
BELT BUCKLING
|
CONNECTED
CONSUMERS
AGENDA

3
MARKET
Macro-economics
Outlook
Will Vietnam GDP and CPI reach
their 2012 targets?
Is the Vietnam retail industry still
attractive?
FMCG Overview

4
A very tough 2012 with only slightly positive signs appearing in
Q3‟12, but still below expectations for the year.
CPI YOY
Source: Vietnam General Statistics Office

5
14%
6%
5%
50%
Gas
VND/12kg tank
Mogas 92
VND/litre
… which is still fragile under pressure from the recent upward
trend in fuel and utilities.
Growth rate
01/09/12 vs 01/01/12
Source: xangdau.net &
http://www.petrolimex.com.vn/

6
1st half 2012
1st half 2011
LABOUR STRUCTURE
51.6 mil employees
GDP STRUCTURE
1,252,577 bil.VND
2.81%
3.81%
5.57% Value growth rate vs. YA
Service continues to drive the growth of the economy, particularly
being led by the Trade sector.

7
NO. COMPANIES DISSOLVED OR CEASED
Jan/2012-Apr/12
• Total volume: 17.735/ 647.627 companies
• Change vs LY +9.5%
RETAIL-SERVICES SALES
Jan/2012-Aug/2012
• Total value: 1,517,721 bil.VND
• Change vs LY: +17.9%
Growth is still there, but many companies are having problems.

8
1
6
14
23
2008
2010
2011
2009
VIET NAM
Rank
Viet Nam retail drops out of top 30 countries of retail attractiveness
by A.T Kearney. Inflation, high real estate price & interest and
business procedure are still big concerns.
Source: A.T. Kearney
X 2012

9
+467%
48%
3%2%
47%
68%
20%
5%
7%
Manufacturing& Processing
Real estate
Wholesale, Retail sale & Repairment
Other areas
01/01/11-20/08/11
01/01/12-20/08/12
Value growth rate vs. LY
However, retail sector is still attractive to foreign investors despite
total FDI decreases.
Total FDI
+107%
+25%
-11%
-86%
NEW FOREIGN DIRECT INVESTMENT
First 8 months 2012 vs 2011
Source: Foreign Investment Agency -
Ministry of planning and investment

10
Macro-economic
Overview
After sky rocketing inflation in
2011, how is Vietnam FMCG
market doing?
MARKET
Macro-economics
Outlook
FMCG Overview

11
FMCG volume sales growth bounces back –
strongest for Beverage & Milk-base
Consumer confidence is still below 100
Cooling CCI rests stable at low level
FMCG volume growth trend resumes in light of cooling CPI though
consumers are still concerned.
Source: Vietnam GSO and Nielsen Consumer
Confidence Survey

12
FMCG MARKET DYNAMICS
REGIONAL SUMMARY Q3, 2012
Vietnam is still the fastest growing FMCG market.
Source: Nielsen Growth reporter Q3, 2012

13
VALUE & VOLUME % CHANGE YA
MAT JUL‟12
23%
11%FMCG (Inc. Beer)
15%
-1 %Household Care
21%
6 %
Milk Based Product
Personal Care
19%
3%Food (excl Milk Base)
28 %
15 %
Beverage (Inc. Beer)
18%
7 %
Cigarette
18%
4 %
Value
Volume
Source: Nielsen Retail Audit
Across most categories, particularly beverages.

14
 Half categories have
medium volume growth of
5-10%; while 15% show
higher growth of >10%
 Price hike around 10% for
most categories except for
dishwashing
liquid, gum, snack, milk
powder, shampoo and
biscuit whose price hike
>15%
.
(YTD Jun‟12 vs. YA)
Most categories pose volume growth of 5-10% with an exception
to beverages, Baby Diaper and RTDM.

15
TOP 10 MANUFACTURERS IN FMCG –
6 CITIES TT – VALUE % SHARE
TOP 10 MANUFACTURERS IN FMCG
6 Cities TT - Value % Share | Period Ending SEP12 | Share of Sum(PROD)
Top 10 Val for MAT TY | Total Mkt
Source: ACNielsen | Retail Index (<< Viet Nam >> ), data to SEP12
TOP 10 CATEGORIES IN FMCG –
6 CITIES TT – VALUE % SHARE
6 Cities TT - V
Source: ACNielsen | Retail Index (<< Viet Nam >> ), data to SEP12
The biggest categories are Beer, Cigarette, Milk and Beverage
which benefit the dominant positions of the players in such fields.

16
Increasing number of new launches in Value
segment
New of new brands declines starting from early 2011
Manufacturers more reluctant to introduce new brands – and most
of new brand launches are in Value pricing segment.

17
0
5
10
15
20
25
30
35
40
45
50
Sauce
Fem_Care
Cigarette
Bouillon-Msg
MilkPowder
BabyDiaper
FruitJuice
SoftDrink
InstantNoodle
Toothbrush
Snack
PersonalWash
Beer
EnergyDrink
DishwashLiquid
Tissue
Shampoo
Biscuits&Pie
RTDTea
Gums
FacialCare
HHCleansers
Deodorants
FacialTissue
BodyLotion
Toothpaste
MouthWash
FabricSoftener
Insect_Aerosol
HairConditioner
CondensedMilk
PackagedWater
BabyCereal
LaundryDetergent
RTDMilk
CookingOil
Insect_Coil
PREMIUM SEGMENT CONTRIBUTION CHANGE
YTD JUL 12 VS. YA
YTDLY YTDTY
Price segmentation based on price index at 6 Cities, YTDJul‟11
[>120 Premium] [100-120 HiMid] [80-100 LowMid] [<80 Low]
Interestingly, Premium segment is either stable or increasing its
share across categories.

18
-3.0%
-3.0%
-4.0%
6.5%
3.4%
2.6%Biscuits
CSD
Shampoo
Consumers tend to trade up with reduction in price gap of “Premium” and
“Mainstream” products. Innovation is a contributor too
Price Gap Change
Premium vs. Mainstream
Premium Volume Change Driven by
Price Gap Reduction
Source: Pricing Analytics Study, Vietnam 2011
Lower price gap between Premium and Mainstream contributes to
the growth of Premium.

19
The Now The Future
How fast is modern trade growing?
How is traditional trade trying to
compete with modern trade?
What are modern trade retailers
doing to attract and retain
consumers?
CHANNELS

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85 94 96 89 57 63 49 22 6 46 44
RETAIL STORE DENSITY ANALYSIS
(Number of stores per million population)
Modern Trade Contribution 2011
295 304
514
849
209
162 136
9 6
38 65
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
-
100
200
300
400
500
600
700
800
900
1,000
HK
Singapor
e
Taiwan
Korea
Malaysia
China
Thailand
Vietnam
India
Philippine
s
Indonesia
Grocery stores
Modern trade
Source: Nielsen Retail Census
Traditional Trade dominates in SEA but Modern Retailing is
expanding its foot print. Vietnam has a big room to grow in terms
of MT store density.

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TRADITIONAL TRADE MODERN TRADE
2011
Total 36 Cities
943
Modern trade
outlets (+25%
vs 2010)
Store number- Nielsen Census
Value sales Contribution
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
30 Cities 4 Cities Hanoi HCM
2009
2010
2011
Traditional trade is still the dominant channel in Vietnam while
Modern trade speeds up opening store especially in Hanoi.
Notes: Modern Trade contribution ( inc. Saigon Co.op, exclude Metro)
Based on 36 largest urban areas in Vietnam : 4 Cities includes
Haiphong, Danang, Cantho and Nhatrang
Source: Nielsen Retail Census

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• Preserving 56 markets
• Upgrading 110 markets
• Building 153 markets
Market system development scheme 2011-
2015: Investment of 2,782 bil.VND with
150.6 ha on developing 319 traditional
market – tier I
“Wet market management skill training for the
markets’ management boards”
“Sales skill training for small traders in wet
markets”.
Ministry of Industry and Trade cooperate with
University of Economics to organize:
Attempts to invest in improving wet markets and support small
traders.
Source: Ministry of Industry and Trade
Decision 012/2007/QĐ-BCT

24
Average Frequency
of Visits per Month
Base: All Respondents (2010 n=1500, 2011 n=1500)
Ref: Q8
▲
▼
Consumers are moving
from Wet Markets
to Supermarkets
However, Supermarkets are increasingly preferred.
Source: Nielsen Shopper Trends 2012

25
Health &
Beauty
Store
15
8
Supermarket
20
19
17
14
14
11
5
3
2
1
1
Minimart
85
44
46
5
Convenience
Store
81
32
27
13
23
41/1-31/9/2012:
12+
new stores open
each month
B&
B8
6
11
59
Supermarket
Retailers of all types are implementing their expansion plans.

26
Preference from
loyalty card
Increased
promotion
frequencies
Difference with
private label
New look by
refreshing logo
and department
branding
Membership
Card, VIP
Card…
With special
offers: Stored
up
points, specia
l promotion
prices
Coming with
fresh, professio
nal and friendly
image
Focus on fresh &
processed
foods, household
products, and
garments.
Heavily
promoted
through price
and displays
On-going
promotions, the
med to match
holidays and
specific
categories or
special
customers
Supermarkets implement a wide variety of programs to build
loyalty and attract consumers.

27
CHANNELS
What lessons will Vietnamese
retailers learn from other
Asian countries?
What will be the channel mix
in the coming years?
The Now The Future

28
Modern Trade Store No. by Format in Asia-Pacific
(% annual growth)
Retailers continue to expand their store base across AP with total
number of stores increasing by over 25,000. Convenience stores
have the fastest growth rate.
Source: Nielsen Retail and Shopper Trend
Asia Pacific 2012

29
CVS
Fresh Meat &
Vegetables
Fresh Coffee
Smoothies
Restaurant
Hot Served Snacks
Additional Product & Service in Convenience StoresAvailable in 2011
Bakery
Books & Magazines
Media
IT & Stationary
Payment
Service
Seasonal Products
Auto & Travel
products
Direct
Marketing
Home Appliances
RTE Meal
Convenience in Thailand: Innovation through Non-FMCG range
has also attracted the shoppers.

30
Thematic
promotions
Supplier
Fairs
Weekly
Promotions
Valentine’s Day
Valentine’s
New Year
Unilever Fair Fonterra Fair
Olay Promotion
Mother’s Day School Holiday
Bi weekly Shopping Calendar
Homecare Fair
Unilever Fair
Weekend Promotion
Minimarts in Indonesia: Thematic promotions and loyalty cards
have helped the Mini-Marts succeed apart from the huge store
base (+10,000 stores).

31
Flashback 2005 Present Fast Forward 2022
ShoppingDestination–MostOften
Super Markets
Very few & expensive –
visit once per year for
curiosity
Grocery Stores
Wholesalers
Wet Markets
All shoppers bought
daily food in Wet
Markets
Metro
Convenience
Stores /
Mini Markets
Super
Markets
Wet market is
thought to be swept
out for its dirty and
untidy image.
Supermarket
increase its
network, thus
increases in the
frequency
Super
Markets
Wet
Markets
Wet
Markets
Super
Markets
Convenien
ce Stores
Wholesalers
Wholesalers
Grocery
Stores
Grocery
Stores
Convenien
ce Stores
Metro Metro
InnovationSeekerandPrudentShopper
Conservative&ValueOrientedShopper
The change is coming to Vietnam too, as evidenced by some
shopper segments…
Source: Nielsen Shopper Focus Groups in
HCM,HN 2012

32
12/7/2012 1st HI-WAY supercenter
SUPERMARKETS
STORE
NUMBER
BY (YEAR)
Co.op Mart + 8
√100
2012
2015
Big C √ 24
√ 29
2012
2013
Lotte Mart + 2 2012
Fivimart + 3 2012
Hiway √ 3
√ 20
2013
2016
31/5/2012 1st FLC Mart
ANNOUNCED EXPANSION PLANS
Notes: (+) new stores.
(√) in total
08/12/2011 1st MINISTOP CVS
07/2012 1st C EXPRESS CVS
CVS-
MINIMARTS
STORE
NUMBER
BY (YEAR)
Co.opFood + 30
√ 150
2012
2015
Satrafoods + 20 2013
TTGD Foods + 2-3 annually
Circle K > 40 2012
Shop & Go √ 100 2012
Family Mart + 27
√ 43
2012
Ministop + 30 2012
…and backed up by the continuous retailer expansion

33
Belt Buckling
SHOPPERS
Connected
Consumers

34
Concerns Discretionary spending
THE ECONOMY
(19%)
JOB SECURITY (18%)
INCREASING
UTILITY BILL
(12%)
HEALTH
(8%)
INCREASING
FOOD PRICE
(7%)
66%
Saving 32%
Holiday
29%
New
technol-
ogies
28%
New
clothes
28%
Out of
home
entertai
nment
27%
Home
impro-
veme
nt
↓ | vs. 34%*↑ | vs. 18%*
↓| vs. 35%*
= | vs. 30%*
↓ | vs. 37%*
↑ | vs. 60%*
*: ↑↓ vs. YA | vs. APAC average
How to utilize spare cash after covering essential living
expenses?
Source: Nielsen Global Consumer
Confidence Index Q2’2012 – Vietnam

35
temptationsuperfluous
Core selling grocery products sales rise
Consumers are tightening their belts. The
recessionary mindset shifts consumer thinking from
Nice to Have to
Need to Have
Support on compulsory expenditures:
gasoline, gas/electricity, water, insurance, rent…

36
Base: All Supermarket shoppers (n = 1500)
Weekly
Every 2 weeks
0%
0%
36%
64%
59%
39%
1%
1%
Lessoften
Ev erymonth
Ev ery2week s
Week ly
2011 2012
Every month
Less often
SHOPPING FREQUENCY
TOP 4 IMPACTS ON GROCERY
PURCHASE CHOICE
Compared with a year ago, how much impact
has each of the following had on your choice of
Grocery Purchases in the last 12 months?
Source: Nielsen Shopper Trends Study 2012
Hardship continues, consumers reduce shopping frequency and
are much impacted by price.

37
20
22
36
37
37
66
41
Buy more on
„Promotion‟
Buy more Vietnamese
brands
Buy bigger pack sizes
Buy cheaper brands
Change shopping
channels to save money
Buy more of smaller
pack sizes
Buy more of Private Label
brands
How do you change your shopping habits
to adapt to the price increases?
%
Laundry
FabSoft
Shampoo
HairCon
Bouillon
Laundry
FabSoft
Shampoo
HairCon
Bouillon
Laundry
FabSoft
Shampoo
HairCon
Bouillon
Change in Volume
of consumption
Change in Pack
size purchased
Change in Brand
purchased
More amount
Less amount
Same amount
Big pack
Small pack
Same pack
Cheaper brand
Expensive brand
Same brand
CONSUMER REACTION TO
PRICE INCREASE
CHANGES IN CONSUMER BEHAVIOR ACROSS
CATEGORIES IN INFLATIONARY PERIOD
Source: Consumer Omnibus Vietnam, Sept 2011
To adapt, consumer are having more economic reactions which
vary a lot (i.e. consuming same but larger packs, downgrading as
well).

38
Gas reward programs
Will you be
the 1st to step
into this game?
To react, retailers & manufacturers offer diversified promotions.

39
« staying at home more often »
Shopping patterns can emerge with consumer
nesting
Out Of Home entertainment & restaurants
Home cooking
Friendliness !
TV-viewing rising
-
+
+
+
Cocooning
In both products and Entertainment!

40
47 %
40 %
Beer can
VALUE & VOLUME % CHANGE YA
MAT JUL’12
Value
Volume
Meal Maker
285%
318%
1.6% vs. 1.5%
2.6% vs. 2.1%
% CHANNEL GROWTH VS. YA
Off vs. On
2011:
713,416 vs. 522,394 stores
Nesting consumers are heading back to their house.

41
Walmart partners with manufacturers on “family meals for less.”

42
Source: YouTube.com/user/ShopRiteStores
ShopRite cooking on YouTube; monthly recipes featuring store
brands.

43
• price positioning
• simple and innovative Promotions
• new value added initiatives
Rising interest in
Value-seeking
In the current climate, consumers and shoppers are
re-appraising their store, brand and
format choices with new lenses.
Consumer Value ≠ Price
Consumer Value = Benefits/Price

44
Source:ACNielsen|RetailIndex(<<VietNam>>),datatoMAR12Source:ACNielsen|RetailIndex(<<VietNam>>),datatoMAR12 Source:ACNielsen|RetailIndex(<<VietNam>>),datatoSource:ACNielsen|RetailIndex(<<VietNam>>),datatoFEB12
Sources: RA, Price Tier market: 6 Cities TT
Enh, Pack size market: 36 Cities Enh TT + Rural
Data ended Mar’12
Source:ACNielsen|RetailIndex(<<VietNam>>),datatoJAN12
VOLUME SHARE OF PACK-SIZE RANGES – GT URBAN
Shampoo Fabclean DWL HCL
Small Pack <400ml <3kg =<1000L =<500ml
Big Pack >= 400ml >=3kg >1L >500ml
VOLUME SHARE OF PRICE TIER RANGES
QuickRetrievals
6CitiesEnh-Volume%Share|PeriodEndingFEB12|ShareofTotalCategory
Source:ACNielsen|RetailIndex(<<VietNam>>),datatoFEB12
QuickRetrievals
QuickRetrievals
QuickRetrievals
Consumers also seek value through up-trading to more premium
products and or buying big packs or pouch to save money.

45
Taste changing
Cigarette
Perfume Fabric
Softener
Ecobags
Organic
products
Milk
Beverage
No fried
Instant
Noodle
Laundry
Liquid
Innovation themes…

46
Belt Buckling
SHOPPERS
Connected
Consumers

47
Speed of action
Offers flexibility
Image/Buzz
What’s Next: Consumers are
more and more
Connected
**End of 2012: Every 5 Vietnamese consumers, there will be 1smartphone
and Tablet users will increase from 2% to 5%
2015: Mobile phones will overtake PCs as the most common web access

48
59
49
59
70
12
27
47
48
53
72
11
6
Conduct product research online
Look up product information online
Read a grocery retailer's circular/flyer online
Compare prices for a grocery product online
Browse a manufacturer's website for a grocery
category
Look for deals online
Look for coupons from an online coupon site
Purchase a product online
Provide feedback about a grocery category through
social media (wrote a review, blogged)
Use a digital shopping list
Other
None of the above
Thinking about Household Grocery Shopping, which of the following activities
have you done in the last month on any online connected device?*
92% of Vietnamese consumers are more likely to
trust recommendations from people they know*
63% are
more likely to trust
consumer opinion
posted online**
Sources: * Global Trust in advertising Q3 2011
**Nielsen Global Digital Shopping –Q1 2012

49
Marketing return on investment*
Advertisers’ spending - % Chg YTD – Global Average**
Sources: *Nielsen Advanced Analytics Consulting - 2009
**Nielsen Global Ad View Pulse Lite Q1 2012
To stay in the game, manufacturers keep an eye on internet
advertisements.

50
Collective Buying Power Sharing Experiences
Reviews Ratings
Recommendations Referrals
Sharing Ideas
Forums, Social Q&A
50
Building demand by connecting consumers (with each other and
with brand).

51
Shopper
Cocooning
Need to Have
Connected
Home
Cooking
Home
Entertainment
products
Proximity
Innovation
Flexibility of
offer
Opportunities
Value-seeking
Private
Label
Price
M-commerce
E-Promo
Buzz
Speed of
actions
Change and adapt… Now!

52
Thank you!

Nielsen grocery report 2012

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