nielsen_vietnam grocery report_2011 update
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Vietnam Grocery Report
1
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Report2011 Update
Vietnam TodayNavigating the Current Landscape
Market Landscape
A Challenging 2011
Inflation
Value for Money Key for Consumers
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Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Growth Opportunities
The Importance of the Three I’s: • Investment
• Identity
• Innovation
Market Landscape
A Challenging 2011
� Economic growth is moderating due to short-term macro and micro challenges
� Growth slows across categories
� Inflationary pressures have generated uncertainty in consumer, business
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Copyright © 2011 The Nielsen Company. Confidential and proprietary.Copyright © 2011 The Nielsen Company. Confidential and proprietary.
� Inflationary pressures have generated uncertainty in consumer, business confidence
� Increasing stratification of consumers: Premium buyers maintain while the middle is squeezed
Challenges arose in late 2010 and bloomed in 201121 %
5 % 7 % 12 %
3 %
8 %
10 %
16 %
17 %29 %
3 %7 %
Retail Sales
Growth
GDP Growth Inflation Unemployment FDI Growth Trade Deficit
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Copyright © 2011 The Nielsen Company. Confidential and proprietary.
= indicates health; = indicates challenges
Source: 2011 Estimation by Vietnam government;
GDP Growth, Inflation, CIEC: 2008-2009;Vietnam GSO
2011 Growth Estimation
6.1% 15% <5%22.6% 10% 12%
09 1009 10 09 10 09 10 09 10 09 10
Gas retailers increased
prices by 4%Fuel prices increased
by 18%
Retail electricity prices
increased by 15%
ASIA
Average
106
Various economic shocks have affected consumer confidence
5
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Consumer Confidence Online Survey Q1 – 2011
Press Articles
Vietnam’s retail market attractiveness has slid further
GRDI Rank
2008: 02
2009: 06
2010: 14
2011: 23
2011 GRI country attractiveness
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Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: AT Kearney Analysis
*) Based on weighted score of market attractiveness, market saturation
and time pressure of top 30 countries
Still a high-growth FMCG market, but inflation has tempering effect
Regional Summary FMCG Growth Q1 2011
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Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Retail Audit
Consumption slows in some categories. Are too many costs being
passed onto consumers?
Top 10 categories – 6 Cities TT
Value and Volume growth Q1 2011 vs. YAG
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Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Retail Audit
Inflation
Value for Money Key to Consumers
• As purchasing power is affected, “spend for necessities only” is now the consumer’s motto
• Consumers are becoming more driven by promotions
• Upsizing continues in Household, Personal Care and Food categories
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• Upsizing continues in Household, Personal Care and Food categories
• Private Label is expected to become the next big consumer trend in the coming years
81% of people are cutting spending on Unnecessary items
10
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Personal Finance Monitor – June 2011
*) Unnecessary items are subject to each respondent’s perceptions
Post-Tet 2011 price increases seem to have a big impact, but consumers
still spend on core items
7.5% 8.5%
23.0%
6.9%9.2%
7.6% 8.5% 9.5% 8.7% 8.8% 8.7% 8.2% 8.2% 8.9% 9.7%11.1% 11.8% 12.2% 12.3%
13.9%
17.5%
2006 Total
2007 Total
2008 Total
2009 Total
2010 Total
Jan 2010
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2011
Feb Mar Apr
Vietnam CPI: Annual & YOY
60%Household
purchasing power
11
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$96% said prices
increase somewhat/ significantly
60%purchasing power
reduced somewhat/ significantly
Products for own consumption (entertainment, eating out…), but not
those for children & family
Impact
*Q.24 – 27; Tet 2011 = Feb’11
Source: GSO, Nielsen Omnibus March 2011
Consumer’s claims Business Leader’s opinions
44
51
59
Reduce number of
products per purchase
Choose to buy more
products on promotion
Reduce the number of
visiting shops
2
12
51
41
41
50
64
Buy bigger packs to save money
Trade down to cheaper products
Not buy some 'non-essentials'
Purchase more on promotion
Business leaders and consumers both expect more purchase on promotion in the near term
12
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Q.33 - 16
Source: Nielsen Omnibus March 2011; Nielsen Business Barometer 1st H -2011
9
26
33
Choose the shops where
there are cheaper prices …
Buy more Vietnamese
goods
Visit shops/ grocery stores
near home to save cost …
products per purchase
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
Buy bigger packs to save money
S1-2011
S2-2010
Vietnam has highest promotion sensitivity in Asia at 87%. More than half
of consumers seldom change stores but actively search for promotions
1621
139
5 4
50%
75%
100% Promotion rarely changes my
brand choice
Only buy promotions when I
already like the brand
Regularly buy different brands
because of promotions
87%
Vietnam Promotion Sensitivity
13
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11 10
55 56
0%
25%
2009 2010
because of promotions
Seldom change stores but when
shopping, actively search for
promotions
Change stores based on best
promotions offered
Base: (2009 n=1466) (2010 n=1464)
Source: Nielsen Shopper Trend 2010
Food and Beverage categories have seen the sharpest price increases…
+ 20% + 11 to 19% + 1 to 9% 0%
Average Price Index of FMCG Categories – YTD Apr’11 vs. YTD Apr’10
14
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Retail Audit
Unit price index: unit price of Top items contributing 50% per category value
and existing over last 13 periods in 6 cities.
… and consumers are more open to change their shopping behavior in
categories with higher pricesFood
Dairy
Product
Beverages
Do shopping behavior changed due to price increase?
15
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
*) Q.29; Base : 300 (all respondent)
Dairy
Product
Personal
Care
HH
Care
Source: Nielsen Omnibus March 2011
8 1619
7
30 31
72 79 86
54
38 3781
39
78
40 5072 59 84
2929
27
3022
815
125
26 17
8 8 7
61
18
Substitute to other products
Consume less - less expensive brands
Consume less - same brands
Consume less - more expensive brands
Same amount - smaller pack size
Same amount - larger pack size
Consumers are likely to stay with their brand in several categories, either
consuming less or trading off the amount by buying bigger pack sizes
%
Beverages Food Dairy Personal Care HH Care
16
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
1112 14
28
8 16
6
19
1017
30 3139
Carbonated Soft Drink
Ready-To-Drink Tea
Energy Drink
Instant Coffee
Instant Noodle
Cooking Oil
Liquid Milk (UHT)
Infant Form
ula (*)
Adult Milk (*)
Shampoo
Bar Soap
Facial Cleanser
Toothpaste
Toothbrush
Laundry Product
Household Cleaner
Same amount - more expensive brands
Same amount - cheaper brands
Consume more
Source: Nielsen Omnibus March 2011
*) Q.29B; Small base-read with cautions for Infant Formula & Adult Mik
Value for money: Upsizing is the key trend in Food, Household Care and Personal Care categories
MSG-Boullion (Big >=900g)
Laundry (Big >=3kg)
Shampoo (Big >500ml)
Fish Sauce (Big > 750 ml)
17
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
36 cities TT, data ending Marl11
Source: Nielsen Retail Audit
Upgrading trend continues in some Personal Care and Home Care categories
Deodorant Fabric SoftenerMoisturizer
18
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Pricing segments based on average price index vs. category average
Source: Nielsen Retail Audit
PRICE
Price of private label is 15 – 30%
lower compared to brands
Private Label Awareness
Key Private Label Categories
Private labels are gaining ground, especially for Food, Paper Products, Household and Personal Care
19
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Shopper Trend 2010
Vietnamese consumers are generally open to private label products
20
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Global Online Survey Q3’2010,
Nielsen Shopper Trend 2011, Press Article
75%Associate store image with private labelquality
73%Believe private label quality is just as good as quality of leading
brands
Growth Opportunities
The three “I’s”– Investment, Identity, Innovation
• Investment – the rural market accounts for 47% FMCG value with limitless potential to be unlocked. Modern trade contributes ¼ of total FMCG value with increasing importance across categories.
• Identity – the brand power of “Vietnamese products” – backed by local
21
Copyright © 2011 The Nielsen Company. Confidential and proprietary.Copyright © 2011 The Nielsen Company. Confidential and proprietary.
• Identity – the brand power of “Vietnamese products” – backed by local manufacturers’ activation and strong consumer preference.
• Innovation – Market is getting complex with new and inventive products. Those that meet consumers’ key need-states in new ways will likely stand out.
Opportunity:
Investment
Vietnam’s Rural Consumers
22
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Business leaders temper growth expectations, still see market
opportunities
20
3024
18
25%+
20% - less than 25%
15% - less than 20%
10% - less than 15%
Expected company growth rate in next 12 months
45
76
72
Increased consumer demand in
your existing categories/ industry
Expansion to secondary cities/ rural
areas
Expansion to modern trade channel
Expansion to new categories/
Key factors contributing to expected company growth
91%
23
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Business Barometer 1H - 2011
26
73
12
21
28
24
2010 2nd half 2011 1st half
10% - less than 15%
5% - less than 10%
Less than 5%
12
14
31
43
Expansion to new categories/ industries
Increased marketing expenses
Improved business conditions in Vietnam overall
Improved business conditions in your industry overall
Reaching rural consumers is the next big opportunity
FMCG % turnover
Total population
Annual Average Income Per Capita – USD
400
800
1,200
177%
158%
24
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Sales of FMCG
categories such as
Laundry and
Toothpaste
Source: Nielsen Retail Audit, GSO
0
400
2002 2004 2006 2008
Urban Rural
Rural Vietnamese save a substantial portion of their income
North West / North East
North:
462,000 VND
Central:
How Much Per Month?
75%
How Many Households Save? Where Does it go?
Keep at home: 87%
Buy gold: 7%
Savings Account: 6%
25
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Central:
377,000 VND
South:
571,000 VND
75%
Monthly Average Saving
Amount – Mean score
HCM 1,373,180 VND
Hanoi 992,834 VND
•Source: Nielsen Rural Syndicated 2010
Foreign currency: 2%
Buy insurance: 2%
Opportunities seen in categories where penetration is still low
100 100 100 100 100 99 97 96 9488 87 86 85
8175 74 71 71 69
59 5954
46 46 45 44
35
24
15 13 116
0
20
40
60
80
100
DETERGENT
DISH WASHING LIQUID
FISH SAUCE
INSTANT NOODLES
SANITARY NAPKINS
BISCUITS + SNACKS
FABRIC ENHANCER/ SOFTENER
BOUILLON GRANULES
CIGARETTES
RTD MILK+FLAVORED MILK
COFFEE (IN-HOME CONSUMPTION)
HAIR CONDITIONER
COFFEE (OOH CAFE)
FRUIT JUICES
HOUSEHOLD CLEANER
FACIAL CARE
DEODORANT
TONIC FOOD DRINK
INFANT CEREAL
Total Rural Vietnam – Used in past year
26
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
0
DETERGENT
DISH WASHING LIQUID
SHAMPOO
TOOTHPASTE
FISH SAUCE
MSG
INSTANT NOODLES
COOKING OIL
SANITARY NAPKINS
CSD
BEER
COLD/FLU
BISCUITS + SNACKS
RTD TEA
FABRIC ENHANCER/ SOFTENER
BOUILLON GRANULES
CIGARETTES
SOY SAUCE
RTD MILK+FLAVORED MILK
COFFEE (IN-HOME CONSUMPTION)
HAIR CONDITIONER
COFFEE (OOH CAFE)
MOBILE PHONES
FRUIT JUICES
HOUSEHOLD CLEANER
VITAMINS (ADULT)
FACIAL CARE
DEODORANT
TONIC FOOD DRINK
INFANT MILK
DIAPERS
INFANT CEREAL
•Source: Nielsen Rural Syndicated 2010
Base: All respondents (n=4200)
Opportunity:
Investment
Modern Trade
27
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Modern Trade: increasing in number of stores and importance
Modern Trade (exclude Metro – Cash & Carry)
Store Numbers ACV Contribution
National : 752 → 826 National : 11% → 13%
28
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Retail Census 2009 and 2010
Higher contribution to monthly grocery purchase categories like
Food, Household and Personal Care
29
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Total Ho Chi Minh + Hanoi; Data ending Apr 2011; MT exclude Saigon Coop
Source: Nielsen Retail Audit
Market is dominated by local players, with more presence from
international players
50
16 322
15
7
15
13 14 13 5
STORE NUMBER OF KEY PLAYERS UPDATED TO APRIL 2011
30
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5
3
21
2
101
44
Super Market
Food store
Convenient store
Source: Nielsen Retail Census 2010
There is still scope to develop for Modern Trade Vietnam benchmarked to other
Asian countries
64%
88%
53%
63%
70%
HCMC
66%
Share of trade for Modern Trade channel
31
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
China Malaysia Thailand Indonesia Vietnam
46%
13%16%
37%
China
Shanghai
Malaysia
Kuala Lumpur
Thailand
Bangkok Vietnam
Hanoi HCMC
Indonesia
Jakarta Greater43%
Source: Nielsen Retail Census 2010
Opportunity:
Identity
Vietnamese Brand
32
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HCMC Ha Noi
I would probably purchase more Vietnamese goods
I would definitely purchase more Vietnamese goods
62% 49%
28% 34%
90% 83%
Consumers’ perception of local goods changes for the better,
representing a solid growth opportunity
33
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
I’ve already been purchasing more Vietnamese goods
more Vietnamese goods
Not sure if I would purchase more Vietnamese goods
28% 34%
8%
2%
2%
14%*
Source: Vietnamese Goods Trend Nielsen Study 2011
* Significantly higher
Local goods are appreciated for a variety of reasons
HCMC Ha NoiConsumer’s association
toward Vietnamese Goods
Reasonable price
Wide variety
Is the brand suitable for me
Trustworthy brand
39%
35%
35%
25%
32%
54% *
42%
35%
Reasonable price
Good/acceptable quality (equal/nearly
equal to imported goods)
Good for health (compared to Chinese
products)
34
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Attractive promotion
Attractive packaging
Good quality
Good guarantee
Safe ingredients
Premium brand
25%
22%
20%
18%
17%
13%
52% *
38% *
26%
52% *
30% *
26% *
* Significantly higher; Base: All respondents (n= 300); Q.28a
Trustworthy
Wide range of products
Popular, used by a lot of people
Suit Vietnamese’ s features like
taste, skin, hair…
Source: Vietnamese Goods Trend Nielsen Study 2011
"Made in Vietnam"
on the label
The logo of "High
quality Vietnamese
goods" on the label
Vietnamese
brand name
the note "Made in Vietnam"
on the label (64%)
the logo of "High quality Vietnamese
goods" on label (82%) *
If label says ‘Made in Vietnam’ it can be viewed as a local brand, despite international origins
35
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
* Significantly higher; Base: All respondents (n= 300); Q.27
on the label (64%)
Vietnamese brand name (56%)
Vietnamese labeling
(ingredients, instruction,...) (53%) *
the logo of "High quality Vietnamese
goods" on the label (46%)
goods" on label (82%) *
the note "Made in Vietnam" on the label
(78%) *
Vietnamese brand name (57%)
100% Vietnamese manufacturer (44%)
Source: Vietnamese Goods Trend Nielsen Study 2011
…which explains such a strong preference for Vietnamese goods across FMCG categories
Household care products
Non- alcoholic beverage
Personal care products
Top Box
4% 4% 92%*1% 18%* 81%
1% 10% 89% 4% 7% 89%
Prefer Vietnamese goods
Prefer International goods
No preference
HCMC Ha Noi
36
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Personal care products
Confectionery
Milk/ Dairy products
Alcoholics
9% 34% 57% 19%* 24% 57%
20% 31%* 49% 13% 24% 63% *
21% 25% 54% 15% 17% 67%
9% 20%* 71% 8% 17% 75%
* Significantly higher; Base: All respondents (n= 300); Q.29
Source: Vietnamese Goods Trend Nielsen Study
Opportunity:
Innovation
Product/Marketing Innovations
37
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Categories are becoming complex with more new products
1,346
Personal Care
662
Food & Milk4,000
6,000
8,000
10,000
Active SKUs – MAT 3 Year Trends New Variants in Last 2 MATs
38
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Retail Audit
147
Beverage
143
Household Care
0
2,000
Food Personal Care Household
Care
Beverage
MAT 2YA MAT LY MAT TY
Data ending April 2011
Innovation helps products stand out in a crowded landscape
New Technology
Sunsilk Co-creations
Nano Complex
Extra chewing gums
New Conveniences
Knorr Gia vi Hoan Chinh
Mixed ingredients
Chinsu Toi Ot
Minute Maid Nutri Boost
Milk-based Juice
Ikun
Carbondinated RTD Tea
New Combination
39
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Retail Audit
Microgranules Prepared fish sauce
Downy 1 Lan Xa
One wash
P/S White Now
Blue foam for
instant white teeth
Close-Up
Hot and Icy toothpaste
Comfort Sang Tao
Flower & Fruit Sense
‘Good-for-heath’ products with natural ingredients across food and personal care are preferred by consumers
Vietnamese consumers listed Health as their top priority
Nam Ngu Fish Sauce:Vfresh Fruit Juice TH True Milk
40
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Source: Nielsen Omnibus March 2011, Nielsen Retail Audit
Kotex Panty liners
Green Tea extract
Nam Ngu Fish Sauce:
Clean fish sauce
Vfresh Fruit Juice
Naturally good
TH True Milk
Truly natural
Lifebouy Body Soap
Natural bitter melon
Going “green,” environmentally friendly products and initiatives are an emerging trend for manufacturers and retailers alike
2011 Green consumption month in CO.OP Mart
41
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Coca-Cola Live Positively Campaign
Source: Press articles
Food for ThoughtFood for Thought
How to navigate through the shortHow to navigate through the short--term challenges term challenges and gain in the longand gain in the long--term? term?
42
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• In the face of current economic conditions, it is critical to understand
what VALUEVALUE means to consumers
Promotion PricingLarge pack
sizes
Food for Thought
• Continue to invest to secure long-term growth future for your brands:
43
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
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:
Nielsen Vietnam
44
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Dabao Nielsen Top to Top Meeting
Stay connected to Nielsen Vietnam
www.twitter.com/nielsenvietnam
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