1

Urban 4 Key Cities & Rural Vietnam

FMCG MONITOR An integrated update

of Vietnam

FMCG market

2016 OVERVIEW

2 2

EXECUTIVE SUMMARY

Despite not meeting the

GDP target in 2016

(grew by 6.21%),

Vietnam economy is

expected to have stable

growth at 6.5% in 2017.

KEY

INDICATORS

Shoppers continue to

make less trips,

coupled with up-sizing.

Down-trading remains

among necessities.

SHOPPING

BEHAVIOR RETAIL

LANDSCAPE

FMCG

GROWTH

FMCG market growth

full year 2016 bounces

back in Urban 4 cities,

nearly double its growth

in Rural. Both Urban 4

cities and Rural market

are predicted to grow at

~5-6% in 2017.

Proximity & smaller

formats (street shops,

ministores) are driving

the market growth.

Rice Cracker and

Liquid Detergent shine

bright in both Urban 4

cities and Rural.

TOP

RECRUITERS

3 3

1 KEY INDICATORS

Retail Sales of

Consumer Goods

+10.2%

2016 vs. YA

CPI

+2.66%

2016 vs. YA

+0.63% +9.8%

2015 vs. YA 2015 vs. YA

+6.68% 2015 vs. YA

CPI 2016 reached an increase of +2.66% versus last year but still under control, driven mostly

by an increase of crude oil. Total retail sales of consumer goods 2016 grew a bit higher than

2015. In general, Vietnam economy is expected to have stable growth at 6.5% in 2017.

GDP

+6.21% 2016 vs. YA

Source: GSO Vietnam

4 4

3.9 1.3

2.6 1.6

4.8 2.3

2014 vs YA 2015 vs YA 2016 vs YA

FMCG GROWTH

3.5

4.7

1.5

-5

0

5

10

Q4

'14

Q1

'15

Q2

'15

Q3

'15

Q4

'15

Q1

'16

Q2

'16

Q3

'16

Q4

'16

FMCG – 12 WEEKLY YEAR-ON-YEAR CHANGE (%)

Value Growth%

10.5 8.2 8.5 7.2

2.7 1.2

Volume Growth%

Both Urban 4 cities and Rural FMCG market post slightly stronger

growth rate in the last quarter of the year. FMCG growth full year

2016 bounces back in Urban 4 cities, nearly double its growth in

Rural. 2016 was a tough year for Rural which faced economic

difficulties. However, Q4 of Rural market recorded as the best

performance in 2016, which seems to be a positive signal for

Rural in 2017.

Avg. Price paid* Value Volume**% change

Urban

4 Cities

Rural

*: To calculate FMCG price paid change, we calculate how much price contributes to the value change for each category,

sum up these contributions and relate to value YA

**: To calculate FMCG volume change, we calculate how much volume contributes to the value change for each category,

sum up these contributions and relate to value YA (this results in an average category change in volume)

1.7

4.1

2.6

-5

0

5

10

Q4

'14

Q1

'15

Q2

'15

Q3

'15

Q4

'15

Q1

'16

Q2

'16

Q3

'16

Q4

'16

Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam |

Total FMCG excluding Gift

2

5 5

Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG excluding Gift

2

8

-2

4

3

4

6

5

6

4

2015 vs YA 2016 vs YA

2

16

15

1

5

10

6

3

1

4

-1

FMCG GROWTH

BY SECTOR

HOME CARE

PERSONAL CARE

DAIRY

PACKAGED FOODS

BEVERAGES

While most sectors of FMCG perform better than last year in Urban,

almost all sectors in Rural market experience deceleration. Dairy,

Beverages and Home Care are most suffering in Rural.

Urban 4 cities Rural

Value change %

6 6

+5.5 pts

Ketchup/

Tomato

Sauce

+2.8 pts

Liquid

Detergent

+2.3 pts

Chili Sauce

+2.0 pts

Instant

Tea

+19.7 pts

+4.0 pts

Liquid

Detergent

+3.0 pts

RTD

Infant Milk

+2.9 pts

Condensed

Milk

+2.5 pts

Drinking

Yogurt Rice

Cracker

TOP 5

RECRUITERS

Rice Cracker and Liquid Detergent continue to shine bright in 2016 in

both Urban 4 cities and Rural. In spite of flagging Rural market,

nutrition categories keep expanding consumer base in this area. (Based on incremental penetration)

(33%) (41%) (78%) (22%)

(47%) (13% )

(12%) (60%) (39%)

*Figure in brackets indicates penetration% (Number of buyers) Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG excluding Gift

3

+14.9 pts

Rice

Cracker

(39%)

Urban 4 cities

Rural

7 7

~5-6%

FMCG

GROWTH

+~5-6% in 2017

Both Urban 4 cities & Rural market

are predicted to reach…

Nutritious & indulging products will remain among top risers as people care

more and more about health and they are also heading to spend more for

pampering/ entertaining that help ease their busier lives.

FMCG 2017

FORECAST

1 Biscuits

1

Biscuits

2 Nutrition drinks: Tonic Food Drink/

Drinking Yogurt/ Fruit Juice 2 Nutrition drinks: Tonic Food Drink/

Drinking Yogurt/ Soya Milk

3 Sauces: Chili/ Tomato/ Mayonnaise

3 Skincare products

4 Ice Cream/ Snacks

4 Beer

5 Beer

5 Energy Drink

Urban 4 cities Rural

3

TOP RISERS 2017

8 8

SHOPPING TRIPS PER YEAR

165 164

158

145 143 138

Urban 4 cities Rural

-1x -6x

-2x -5x

SPENDING PER TRIP (000VND)

88 91 96

51 56

60

Urban 4 cities Rural

SHOPPING

BEHAVIOR

Shopping frequency drops more sharply than last year though basket

value in each shopping occasion is higher. It seems to be harder and

more competitive to approach consumers.

Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG excluding Gift

4

9 9

% of categories

URBAN 4 CITIES 53% Up-sizing

RURAL 47% Up-sizing

48% Up-sizing

51% Up-sizing

2015 vs. YA 2016 vs. YA

% of categories

TOP UPSIZE

Shower Gel

Shampoo

Hand Washing

Powder Detergent

Facial Wash

TOP UPSIZE

Powder Detergent

Facial Wash

Hair Conditioner

Baby Diaper

Shower Gel

UP-

SIZING

Up-sizing is still an overriding trend, increasing in Rural but slowing in Urban 4 cities. They

seem to save more time and get more value for money with bigger packs. Is this one of the

reasons that make consumers shop less often as product consumption also lasts longer?!

Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG excluding Gift | Categories > 10% penetration

4

Up-sizing

Stable (pack size +/- 1%)

Down-sizing

10 10

% of categories

URBAN 4 CITIES 50% Down-trading

RURAL 43% Down-trading

48% Down-trading

54% Down-trading

2015 vs. YA 2016 vs. YA

% of categories

TOP

DOWNTRADE

Powder Detergent

Cooking Oil

Dishwashing Liquid

TOP

UPTRADE

Skincare

Fish Sauce

Baby Diaper

More down-trading is observed in Rural and the trend remains among

necessities.

DOWN-

TRADING

Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG excluding Gift | Categories > 10% penetration

4

TOP

UPTRADE

Skincare

Paper Products

Beer

TOP

DOWNTRADE

Instant Noodle

Fabric Softener

Dishwashing Liquid

*Food Inflation 2.4%

Down-trading

Stable (average price +/- 2.4%*)

Up-trading

11 11

8

68

17

2 5

33

28

10

7

13

3 6

MEDIUM-SIZED

STREET SHOPS

SMALL

STREET

SHOPS

WET

MARKET MEDIUM-SIZED

STREET SHOPS

SMALL

STREET SHOPS

WET

MARKET

SPECIALTY

STORES

HYPERMARKET &

SUPERMARKET

MINIMARKET/

CVS

31

29

10

7

13

2 6 9

66

18

2 5

VALUE SHARE %

Source: Kantar Worldpanel | Households Panel | Urban 4 Key Cities & Rural Vietnam | Total FMCG excluding Gift

VALUE CHANGE % FY 2016 vs year ago

11%

1%

=

36%

3%

5%

6%

Street shops sustain their dominance (over 60% share) in both Urban 4

cities and Rural. Ministores (Minimarket & CVS) achieve the most

outstanding performance in Urban 4 cities (grow by 36%). Proximity &

smaller formats are now driving the market growth.

5

MEDIUM-SIZED

STREET SHOPS

SMALL

STREET SHOPS

WET

MARKET

SPECIALTY

STORES

HYPERMARKET &

SUPERMARKET

MINIMARKET/

CVS

OTHERS

FY 2015

FY 2016

RETAIL

LANDSCAPE

Urban

4 cities Rural

1%

= =

12

About Kantar Worldpanel

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Through continuous monitoring, advanced analytics and tailored solutions, Kantar Worldpanel inspires successful decisions

by brand owners, retailers, market analysts and government organizations globally.

With over 60 years’ experience, a team of 3,500, and services covering 60 countries directly or through partners, Kantar

Worldpanel turns purchase behavior into competitive advantage in markets as diverse as FMCG, impulse products, fashion,

baby, telecommunications and entertainment, among many others.

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Contact us

Nguyen Thi Nhu Ngoc

Senior Marketing Executive

Email: nhungoc.nguyenthi@kantarworldpanel.com

Tel: +84 8 39306631 | Fax: +84 8 39306632 | Mob: +84 (0)988 445 401

Kantar Worldpanel Vietnam | 58 Vo Van Tan St., Dist. 3, Ho Chi Minh City, Vietnam