1. Consumer Trends 2020
BBGV 12th Feb 2020
Phil Worthington

2. 317%
196%
128%
59%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
BrandZ Top 10 Powerful Brands
BrandZ Strong Brands Portfolio
S&P 500
MSCI Word Index
Strong brands generate superior shareholder
returns than leading market indices
Strong brands make a company more money
2

3. This brand lost US$30 million in sales. Why?
The redesign eliminated
Tropicana’s orange-with-a-
straw graphic, which had
been a familiar brand
reference for shoppers at the
shelf
Colour coding was
dramatically reduced in the
new packaging, making it
difficult for shoppers to
identify product variants.
The new packaging reduced
the emphasis on the
Tropicana brand, playing up
the “100 percent orange”
claim instead
Original packaging The re-design
3

4. Consumer Trends for Today
1. Taking into account regional differences
2. Consumers love new launches but they are risky
3. Consumers have gone digital crazy
4. E-Commerce is booming
5. Sustainability
4

5. 1 There is more than one Vietnam
HANOI
➢ Population: 7.5 million
➢ GDP: US$ 27.6 Billion
➢ GDP per capita: US$ 3,600
DANANG
➢ Population: 1.029 million
➢ GDP: US$ 2.992 Billion
➢ GDP per capita: US$ 2,908
HCMC
➢ Population: 8.2 million
➢ GDP: US$ 43.7 Billion
➢ GDP per capita: US$ 5,318
Danang-ese
aspires for smooth
sailing in life.
Hanoi-ans are
more pragmatic.
They want is a high
level of social
status.
Saigon-ese
chooses to live life
to the fullest no
matter what
obstacles they
face.
5

6. Danang
Life is going to be smooth sailing. Life
should be not a competition. It’s more
about how to get enough to secure the
future, then that’s it
“ Actually I have been to
HCMC. I lived there for 4
months. But I think they
have factors that I like
but I still prefer to live in
Danang as it’s more
peaceful & less
competitive. Here, I still
have a good pay, have
things to entertain since
now we have more
international festivals like
food festival or recently,
the firework festival is
happening right now
here or we even have
Starbuck like Saigon…”
6

7. Hanoi
Hanoi-ans are more
pragmatic. All they want is a
high level of social status.
“Now I’m in the last year
of my college and I
wanna have a job after
graduation. Maybe my
brother can help me with
it as he has some kind of
relationship in his
company so he can help
me to get a place there”.
“I want to buy car, but I
will ask for a financial
support from my mom”.
7

8. Saigon
“The world is moving so you have to make a move
too; even a risky one. Life offers a land of
opportunities. It is just about how well you take
and seize them”.
“I used to work for an IT
company but the salary
is not attractively high
and had to take me long
time to get promoted to
get paid better, so I
decided to learn filming
then rising my interest in
photography so I
decided to open my
own studio some years
ago”.
“If I won lottery, I would
re-invest into my business
to expand the size”.
8

9. Different product name and packaging
in North v.s. South
Different product name, packaging and
communications in North v.s. South
..respect & leverage cultural differencesHow Brands Adapt to Regional Differences
9

10. Appeal more to northern consumers
with Premiumness & Fashion
association
vs
Trying to win more Southern females
by dialing up ‘stronger’ personality
of girls
How Brands Adapt to Regional Differences
10

11. ✓ Trust is critical
✓ Anecdotal evidence can trigger trial
✓ Functional demonstration or Expert’s
endorsements are good ways to get into their heart
✓ Trial and adoption takes place more quickly
✓ New news is key trigger to try
✓ Marketing activities (TVCs, promotions and
samplings) can trigger trial
2. New brands or launches need different
approaches/1
New launches take a longer time to fly yet consumers are
more loyal once they trust the brand
Trial and adoption takes place more quickly
How Brands Adapt to Regional Differences
11

12. 2. New brands or launches need different
approaches/1
South: Mirinda Soda Cream. Works better in
South as:
Creating New Taste desire via Fun/ Engaging
style
Excite the trial motivation by new term ‘Ngon
xoắn lưỡi’ (Tongue twist delicious)
North: Ariel Matic 2019. Works
better in North as:
- Establish TRUST with Miss
Vietnam
Empowered by new technology
(3D technology) – RTB is very
important in North
How Brands Adapt to Regional Differences
12

13. 2. Vietnam Has Gone Digital Crazy
13

14. Youtube – 50 million Vietnamese
users
Spend 1.7 hours on YT per
weekday
Internet penetration 66% (SE Asia
average is 63%)
Smartphone penetration is 72%
Vietnam Has Gone Digital Crazy
14

15. of Vietnamese consumers say ads are appearing in
more places now
of people say that advertising is more intrusive now
Consumers are acting on this:
of Gen Z in Vietnam have installed an ad blocker
85%
6 10
22%
out
of
However consumers are less receptive to advertising on digital
channels…
Source: AdReaction 2018 – Kantar Millward Brown
15

16. Ensure you
have
something
compelling
and
distinctive
to engage in
the first few
seconds
Viewer
share
(%)
Duration of ad (seconds)
Video Playback Behavior
0 10 20 30 40 50 60 70 80
100
90
80
70
60
50
40
30
20
10
0
Ads have less than 3 seconds
to deliver in a cluttered online environment
Average (ad) dwell time
2.3s

17. One way around this is the rise of Native Advertising
Confidently identify
native ads as
sponsored content
Match the site’s
editorial tone
Create content that
resonates with the
audience
1
2
3
17

18. Sometimes it’s important for
your ad to blend in.
Often, it’s more important
to stand out.
This is the fine line native ads walk.
18

19. Innovations
19

20. Innovation: Enormous number of new launches every year, but only a few find
real success
Top launches which
reach 1% penetration or
500k households for 1 year
1.7%
Among 107,968
new launches in 7 markets*
only
2.1% 0.4%
3.5%4.1%
Spain UK
Vietnam China
% top launches
in some markets
Source: Worldpanel Division | Innovating for Growth report
*7 markets including the UK, China, Vietnam, Brazil, Spain, Mexico, Germany
20

21. Vietnam’s FMCG market is much more innovative over time
3
30
2014
Source: Worldpanel Division | Household Panel | Urban 4 key cities | FMCG *New launches are counted based on new brand, variant, pack size, pack type
7,184
new launches
5,909
new
launches
3
30
2018
16.2
new bees/day
19.7
new bees/day
In 2018, new launches
appeared almost
every hour !
21

22. NUTIFOOD
TROPICANA TWISTER JUICY MILK
The new juicy milk category
22

23. 23
Source: Worldpanel Division | Lifestyle Survey | Urban key 4 cities Vietnam
With more offers in the market, consumers nowadays are more skeptical of
the influencing factors around them, implying that not all innovations are
easily adopted
• Try new product after
seeing its advertisements
• Believe in benefits
claimed by products
• Impulsively buy products
with in-store displays
FEWER households
(2018 vs 2011)
Only
39%
Households agree
”
I tend to try new
products if others
recommended.
“
In fact, they spend on average 1 million
dong in a year on new launches, 122k
more than those who disagree

24. 24
4. The Rise of E-Commerce

25. Online, Mini Stores and Specialty Stores are today’s top 3
growing FMCG channels
Total FMCG value spend year-on-year change
91.0%
36.3%
14.3% 11.2% 6.5% 5.0% 3.2%
-1.1% -4.1%
Online Mini Stores Specialty
Stores
Hyper
Super
Direct Sale All
Channels
Wet
Market
Street
Shops
GT Others
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift | 12 months ending June 2019
FMCG growth:
5.0%
25

26. And there is huge potential for growth, for ecommerce
Ticket in k VND
per shopper per tripPenetration %
99.1
78.4
56.1
61
25.4
Street Shops
Hyper-Super
Specialty…
Mini Stores
Online
Number of trips
per year per shopper
95.7
14.5
9.8
13.8
4
92
195
256
97
356
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift | 12 months ending June 2019
26

27. E-Commerce Is Extremely Competitive
Meaningful Difference Salience Power Index
Lazada
111
104
140
18.7
Sendo
105
89
10013.5
Shopee
150
127
16224.3
Tiki
133
138
12721
Sample size: N=400, Sample definition: 50% Male, 50% Female, 18-65 years old
Category introduction: shopping sites or apps that offer a range of goods such as clothing, homewares,
electricals or health and beauty products
27

28. Ecommerce as a channel will inevitably continue its
spectacular growth
-
10
20
30
40
50
60
70
RollingOnlinepenetration
China Key & A
city
Online shopping penetration in China was at
almost the same level as we have in Urban
Vietnam today, 7 years ago…
% online FMCG buyers
# of online FMCG trips
2018 MAT P6 2019 2025F
22.4%
3.6
25.2%
4.0
60.0%
6.1
“
”
Vietnam level today
Source: Worldpanel Division | Households Panel | Urban 4 Key Cities | Total FMCG excluding Gift
28

29. 5. Sustainability
29

30. Sustainability is now a real concern for consumers
Top 3
Household’s Concerns
Food safety
Health & Wellness
Environmental
issues / Diseases
1st
3rd
2nd
30

31. Banking
Meaningful Difference Salience Power Index
ANZ
71
101
59
2.1
Eximbank
79
79
714
HD Bank
77
79
693.7
Maritime
Bank
71
88
62
3
Sacombank
106
103
108
8.4
SeABank
63
72
68
2.5
SHBank
70
86
60
2.5
Techcombank
128
115
858.5
Vietcombank
149
135
19016
ACB
110
106
98
7.6
Dong A
95
88
956.5
HSBC
85
118
684.6
Agribank
99
93
144
10
BIDV
128
112
126
10.8
VietinBank
119
105
1279.9
Sample size N=400, Sample definition: 50% Male, 50% Female, 18-65 years old
Category introduction: organizations that offer current or savings accounts, i.e. accounts that allow you to
make deposits and withdrawals, and conduct other financial transactions.
A great opportunity for banks to enhance their consumer experience
31