tns consumer confident tet spending 2015

Vietnam Consumer Trends 2015

© TNS February 2015




Above VND 20mil

VND 13.5mil – VND 20mil

VND 8.5mil – VND 13.5mil


VND 3mil – VND 5.5mil

Below VND 3mil

2011 2014

Income: Increasing income levels

Source: TNS VietCycle report

Monthly Householdincome

4


© TNS February 2015 3

GDP: From Slowdown to Stability

GDP Growth rate and GDP Per Capita (US $)

Source: GSO Vietnam and World Bank

7.88.4 8.2 8.5

6.2

5.3

6.8

5.95.3 5.4

5.98

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

1,9111,2321,165 1,334 1,543 1,755607 699 797 919 2,028



5935 45 41 30 26 17

35

24

2932 38

3830 37

46

1636

22 21 3244 46

18

2008 2009 2010 2011 2012 2013 2014 2015

Positive Neutral Negative

89

64

78 7968

5651

82

Consumer Confidence: Rebound

5

Ave. Petrol VND/ liter

Negative sentiment going down – things can’t get worse

Source: TNS Consumer Confidence – HCMC + HN

15,125 14,004 16,364 19,450 22,333 23,678 23,264 17,040



Employment: Reduced uncertainty

68

63

56

65

20

32

24

23

12

5

20

12

2012

2013

2014

2015

Present job is safe Chance of unemployment Don't knowNot sure




Saving: Optimism fuelling consumer spend

55

32

19

16

18

26

14

29

14

23

20

37

13

18

45

18

2011

Mid 2012

2014

2015

Up to 5% 5% - 10% 10% - 20% More than 20%




34444

20610

22

8

41535859

6349

6471

7979

74

56423837333029

20191817

Education Health care products / services

Food & beverages products Household utilities

Communications Entertainment & dining out

Transportation Personal devices

Household care products Personal care products

Home appliances

%

Less The Same More

Education, health care and household necessities show a growth in spending. Entertainment and dining out top of consumers’ cut-off list

Consumer planned spending in 2015: +/- ‘more’ trend vs. 2014

+8

+7

+7

+13

+4

+18

+8

-

-11

-3

-




New brands New experiences

8

0

50

100

150

200

250

300

2Y 1Y 6M 3M 1M Now

Retail & Service Turnover (VND, tril)

http://www.google.com/url?url=http://www.160vn.com/2013/05/14/phuc-long-coffee-tea-house/phuc-long-coffee-tea-house-logo/&rct=j&frm=1&q=&esrc=s&sa=U&ei=oeEOVIeNHoj2yQTD-YL4CQ&ved=0CBYQ9QEwAA&usg=AFQjCNEZYm-UxX1uSQ3KfnWgDMQBbHkOSg

http://www.google.com/url?url=http://en.wikipedia.org/wiki/Harley-Davidson&rct=j&frm=1&q=&esrc=s&sa=U&ei=1OMOVILBEcenyATpjICYDQ&ved=0CBYQ9QEwAA&usg=AFQjCNFh-S9IuKd84PRw6zM5bTdj-_dpLQ



Consumers are Shopping

Average monthly shopping frequency

11

SOURCE: TNS VietCycle 2014 – Urban only

21times

14times

1.9times

Wet markets Street Shops

Hyper/super market

Convenientstores

Minimarkets Shoppingcenters

1.9times

1.5times

0.3times

Department stores

0.3times



Vietnam Digital Trends



eCommerce – Vietnam ahead of India, Indonesia and Thailand

Incidence of eCommerce (%), including COD

Access

Trust

Experience

Price / choice

91

SOURCE: TNS Connected Life 2014

22

4559

78

Keny

aGh

ana

Indi

aEg

ypt

Nige

riaIn

done

siaTu

rkey

Thai

land

Arge

ntin

aVi

etna

mBr

azil

Sout

h Af

rica

Colo

mbi

aPo

rtuga

lHu

ngar

yGr

eece

Philip

pine

sM

exico

Mal

aysia

Hong

Kon

gCh

ina

Cana

daFr

ance

Taiw

anUS

AUA

ESa

udi A

rabi

aSp

ain

Italy

Japa

nNe

w Ze

alan

dBe

lgiu

mSw

eden

Sing

apor

eRu

ssia

Aust

riaCz

ech

Repu

blic

Finl

and

Denm

ark

Slov

akia

Isra

elGe

rman

yAu

stra

liaPo

land

Sout

h Ko

rea UK

Switz

erla

ndNe

ther

land

sNo

rway



Online Purchase: Clothing and fashion accessories on top of online items purchased in P3M

81

19

No Yes

Past 3 months online purchase (including CoD):

85%

Clothing

27% 9% 9%

Fashion accessories

Home appliances

Personal grooming/ cosmetics

products6%

Food / online delivery

4% 2% 2%

Voucher at restaurant / cafe

Personaldevices

Others

Online items purchased




We have smartphones – do you have an app for me ?


7176

8580 76 74

6256

Global EmergingAsia

Singapore Thailand Malaysia I ndonesia Vietnam Philippines



Digital

14


66%Urban

62%

12%

I nternet penetration

Device ownership

52%

43%37%

Feature Phone

(National)

Smartphone Tablet LaptopDesktop



Relatively high online Video viewership: catching up on what we have missed all these years

46


Traditional TV and Online video usage

A1. Frequency of media consumption | C1. Frequency of activities | D2. Total time spent on mediaBase: Global- typical day(40,157) | Vietnam- typical day(645) Note: Classification of TV and online video consumption determined by frequency and volume of TV watching, and frequency of o nline videos. TV hours and video frequency on axis represent the lowest and highest points for each metric. See definitions page for detail s.

Heavy online videos, Heavy TVHeavy online videos, Light TVLight online videos, Heavy TVLight online videos, Light TV

Online video consumption

TV consumption

Argentina

AustraliaAustria

Brazil

Canada

China

Colombia

Denmark

EgyptFrance

GermanyGhana

Greece

Hong KongIndia

Indonesia

I srael

I taly

Kenya Malaysia

Mexico

Netherlands

New Zealand

Nigeria

Norway

Philippines

PolandPortugal Russia

Saudi Arabia

SingaporeSouth Africa

South Korea

Spain

SwedenSwitzerland Taiwan

Thailand

Turkey

UAE

UKUSA

Vietnam

TV consumption

Heavy online videosMax. 8.8 times a week

Light online videosMin. 2.6 times a week

Heavy TVMax. 3.0 hrs daily

Light TVMin. 0.8 hrs daily



While we love our TV, our online habits are similar to the rest of the world

Overall media consumption

A1. Frequency of media consumption| C1. Frequency of digital activitiesBase: Global (54,775) | Vietnam (980)

38


710

751515

3546

2216

3421

911

871314

2360

1211

126

Global VietnamVideo/ TV

Paid online video/TVFree online video/TV

Watch TV programmes on a TVWatch online live broadcast video

Watch online non-live broadcast video

NewspaperRead printed newspaper

Read online news, sport or weatherMagazines

Read printed magazineRead online blogs or forums

RadioListen to radio programmes on a radioListen to online radio/music streaming



We love online News, Social Networks & Gaming

52


2861314

109

2421

1515

97

6041

4686

421612

6

Global Vietnam%

C1. Frequency of activitiesBase: Global (54,775) | Vietnam (980)

551193

I nformation seekingReading news, sports or weatherVisit e-learning or education site

Access info from local government

EntertainmentPlay games via a mobile/tablet

Stream music/radio onlineWatch live video online

Watch recorded/on-demand video onlinePlay games on website/console

Watch paid TV/movie online

SocialAccessing social networks

Visit blogs/ forumsUpload photos, video or music online

Write my own blog



TV compliments Lunch/ Dinner, online Videos all other time

45


0

25

50

75

100

In bedwhen I

wake up

Earlymorning

Latemorning

Duringlunch

Earlyafternoon

Lateafternoon

Earlyevening

Duringdinner

Lateevening

In bedbefore I go

to sleep

Watch TV programme on a TV Watch videos/TV shows or movies on a device

How traditional TV and online videos are consumed throughout the day

D3. Device/media usage by daypart | D4. Activities by daypartBase: Vietnam- typical day (648)

Reach %



Affinity for TV advertising decreasing continuously

SOURCE: TNS Vietcycle Report 2014

4540

33 32

24

The products advertised the most on TV are always the best productto buy

2001 2004 2008 2011 2014

Top-2-box agreement (% ):



What catches the consumer attention



Authenticity matters

Yes!“I need to know the

companies where the products or services are

from so I have confidence to use them”

GUARANTEEQUALITY / SAFETY

Authenticity will become paramount for brands as they look to regain credibility and trust. Consumers have lost a great deal of faith in brands; they are searching for truths and clamouring for transparency.



Mobile device as the everything hub

Absolutely!

DEVELOP YOUTH APPLICATIONS FOR

YOUR BUSINESS

As the availability of wireless broadband

expands & the cost of advanced mobile phones drop, the mobile device will

become the preferred hub for digital activity



Distraction is clutter breaking

YES, IT’S THE NEW TREND ESPECIALLY FOR YOUTH!

JUMP ON BOARD!

DEVELOP ENTERTAINMENT WEBSITE / LINKS

Understanding people do more than one thing at a time, content creators are turning what could be a negative (distraction) into a positive (immersive) experience. By layering a multitude of media into entertainment, they are creating content designed for simultaneous consumption and engagement



Tet Spending 2015



2015: Relatively higher willingness to spend

13 46 41 12015

17 38 37 82014

Less The same More Don't know

Consumer’s overall intention to spend more or less in 2015:




Households across HCMC and Hanoi intending to spend around VND10mn over the Tet period

VND 9,661,623VND 11,286,087

VND 13,934,133 VND 14,159,465

HCM City HanoiIntended Tet spendingAverage monthly household income

I ntended spendfor Tet

I ntended amount to be spent during Tet per urban household:

VND 9,918,276




3

24

37

17

12

55

13

20

30

21

11Above VND 20mil

VND 13.5mil – VND 20mil



VND 3mil – VND 5.5mil

Below VND 3mil

Monthly HouseholdIncome 2014

HouseholdTet spending

Approximately 1 month of income is spent on Tet

Income / Spend Range

4




The majority of the household Tet spend will go to the household, however a significant portion of Tet spending – around USD300 – will go to gifts for others

31Percentage of overall Tet spending that households will use for gifting others, including food, drink and lucky money

69Percentage of overall Tet

spending that households will use to buy things for

their for their own personal and household

consumption

I ntended amount to be spent during Tet per urban household:




Food & beverage will account largely for household spending, followed by clothing & accessories, during Tet. Food & beverage are also the biggest contributor in gifts spending. Lucky money to contribute around 10% - ~VND1mn - of total household Tet spending

29109

73

189

63

157

62

541

2

Food & BeverageFoodBeer

Non-alcoholic beveragesSpirits/ liquor

Clothing & accessoriesClothing

Fashion accessoriesPersonal grooming

HomeEntertainment & dining out

Home improvementHome appliances

TransportTransportation to hometown

Travelling for pleasure

Other

154

32

6

10

6

Food & BeverageFood

Non-alcoholic beveragesSpirits/ liquor

Beer

Lucky money

Support family forcelebrations

Breakdown of household Tet spending % : Breakdown of Tet gifting spending:

69%Household

spend

31%Tet Gifting

VND 9.9 million




Overall, households will spend the same or more across all categories

Spending comparison with last year’s Tet by each category %:

88712

1021

13

1914

11

1113

5869

7675

5355

62

5058

45

4066

3322

1713

372425

3128

44

4921

FoodSpirits/ liquor

Non-alcoholic beveragesBeer

ClothingFashion accessoriesPersonal grooming

Entertainment & dining outHome improvement

Home appliances

Transportation fare to hometownTravelling for pleasure

Lower The Same Higher




The majority of consumers planning to spend the duration of their Tet holiday at home with family

How consumers plan on spending their Tet holiday %:

85

77 0

I'll stay in my hometown and stay there withfamily for the duration of the Tet holiday.

I'll stay in my hometown for a couple of days thengo travelling somewhere in Vietnam for pleasure.

Due to economic difficulties, this year I will not goback to my hometown.

I'll stay in my hometown for a couple of days thengo travelling somewhere overseas for pleasure.




Summary

1. Consumer Confidence - New level of optimism owing to stability, less uncertainty, lower fuel prices.

2. FMCG – last year has been challenging, with lots of brands competing for stagnant category volume. 2015 will be about winning the battle at the last mile and winning shoppers at the point of sale. Strong local brands should consider ASEAN potential.

3. Consumer Spending – with growing incomes and consumer confidence, savings are coming down and discretionary spending on Food & Entertainment, OTC, Education growing up

4. Digitally savvy – high acceptance of e-commerce and COD, fast emerging as an emerging channel in HCMC & Hanoi for Fashion, Technology and value deals.

5. Tet spending is likely to be flat for most categories. Increased spending on Clothes, Food & Beverages, Home appliances and Travel.



Thank youQuestions?

[email protected] Ashish Kanchan

Managing DirectorTNS Vietnam

tns consumer confident tet spending 2015

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