kantar worldpanel vietnam consumer trends in vietnam and asia-mar18

1. 1
Major
Consumer
Trends
Vietnam and Asia

2. 2
Agenda
♦ Asia overview
♦ Major consumer trends

3. Asia
Overview

4. Asia represents a huge consumer base
4
ASIA REMAINS THE GLOBAL GROWTH ENGINE
Source: United Nations | IMF
60% 36%
of global GDPof global
population
ASIA
3rd
biggest consumer
base in S. E. Asia
15th
biggest consumer
base in the world
VIETNAM
60% of global economic growth

5. Emerging & Developed
countries
Year-­on-­year GDP Growth Rates (%)
Asian countries
7.1 6.7
6.2
6.9
4.2
5.0
3.3
2.4 2.0
1.5 1.0 1.6
-­3.6
1.5
-­0.2
7.4
6.9 6.8 6.7
5.9
5.1
3.9 3.6
3.1
2.6
1.7
2.7
1.9 2.3
1.7
India China Vietnam Philippines Malaysia Indonesia Thailand Singapore Korea Taiwan Japan Eurozone Brazil US Rusia
2016 2017
5
A majority of Asia sees brighter economic outlook. Vietnam is still among the fastest
growing markets, surpassing the 2017’s GDP target of 6.5%
Asia GDP growth: +5.5% in 2017 Global GDP growth: + 3.7%

6. Higher purchasing power across Asia, increasing the potential from ‘newly-­rich’
Household final consumption expenditure per capita (US$)
6
Source: World Bank
0
5000
10000
15000
20000
25000
30000 1990 1995 2000 2005 2010 2016
0
1000
2000
3000
4000
5000
6000
Malaysia Thailand China Indonesia Philippines Vietnam India

7. 7
The whole region witnesses rapid urbanization
Source: IMF
Malaysia
Indonesia
Thailand
Vietnam
Philippines
2000 2010 2016
China
South Korea
62 71 75
42 50 54
31 44 52
24 30 34
484544
36 49 57
80 82 83
% Urban development
Rapid urbanization
Rural and suburban today will
become the new urban
consumers of tomorrow

8. Nearly half of Asian women in the workplace, indicating time poor and demand for speed and
convenience
% Working female
8
20
30
40
50
60
70
80
China Hong Kong Indonesia India Japan South Korea Malaysia Philippines Singapore Thailand Vietnam
2012 2016
Source: World Bank – Female employment % of population ages 15+

9. Household size is shrinking, arising more individual needs among Asian consumers
9
2.5
3.0
2.7
3.4 3.5
4.4 4.5 4.4
4.8
5.3
2.4
2.8 2.8 2.9
3.2
3.8
4.5 4.3
4.6
4.9
Japan Taiwan South Korea China Thailand Vietnam Indonesia Malaysia Philippines India
2012 2016
Average number of people per household
Source: The Economist & ArcGIS
Families with 1-­2 generations Families with 2-­4 generations
* Indonesia: Average number of people per household in 2015
*

10. Asia has 3 clusters of consumers. SEA population is still young compared to other areas with
Millennials are key future consumers
10
Japan
Hong Kong
South Korea
Taiwan
Thailand
China
Vietnam
Indonesia
Malaysia
Philippines
20
25
30
35
40
45
50
-­ 10,000 20,000 30,000 40,000 50,000 60,000 70,000
Median age
GDP per capita -­ PPP (US$)
Source: IMF and World by Map | Millennials defined as those born between 1980 and 2000
Aging consumers
Millennials consumers
(Over 1/3 of SEA pop)
Working-­age consumers

11. 11
Source: National Statistics and http://populationpyramid.net/
With 177 million individuals, Millennials account for over one third of SEA population
# of Millennial Individuals (defined as those born between 1980 and 2000)
Indonesia ThailandSEA
177 Million 19 Million89 Million
Philippines Vietnam
36 Million 34 Million
35% 38% 35% 36% 28%

12. 12
Millennial generation poses significant different portraits versus older generations
Social and
geographic shifts
Tech-­Savvy Online
Millennials spend 4.6 hours/day online.
They use digital platform for research.
Marriage delay
Sharing economy
Higher Education
Changes in career
choices
Different lifestyles
• Seek for greater
convenience
• More going out
• Open to new things
• Go premium but value
for money
Source: The Council of Economic Adviser | 15 Economic Facts about Millennials

13. The mindset of Millennials is different from that of older generations in many aspects
13
48
60
The internet has changed
drastically the way I enjoy in
latest years
65
54
When I buy FMCG products, I
always compare prices between
brands before buying
35
28
I believe in benefits claimed
by products
85 70
I exercise regularly for better
health
Source: Kantar Worldpanel | Lifestyle Survey 2017 | Urban 4 cities & Rural Vietnam | Millennials is defined as people under 40 years old
DIGITAL AGE PRICE SENSITIVITY SKEPTICISM HEALTH HABITS
Millennials Older gen
% OF HOUSEHOLDS AGREE

14. Winning among Millennials
What we have learnt about Millennials?
14
Command a strong
emotional
connection
Favour
“Advanced
Features”
Willing to pay more
for products justify
its worth
Favour
Attractive
Packaging
Source: Kantar Worldpanel & Kantar Millward Brown
3x
SEA’s top 20
Millennial brands are
More loved by Millennials
compared to competitors
55%
categories Millennials
buy are higher than the
average price
Additional BENEFITS
Advanced FORMATS
Better QUALITY

15. 15
Major
consumer
trends

16. 1
2
3
4
5
5KEY TRENDS
HEALTH AND
BEAUTY
DIGITAL
INVOLVEMENT
OMNICHANNEL
INDIVIDUALISM
CONVENIENCE

17. DIGITAL INVOLVEMENT

18. Asian consumers are now more and more connected, internet access is expanding very fast
esp. SEA
18
95
90 88 87
94 93
84
79
67
56 53 50
Internet Penetration by Countries (%)
(2017)
Source: Internet World Stats
6 8 8
13
9 11 13
19
28
36
58
Evolution of Internet Penetration
(percentage points 2017 vs 2012)
Source: United Nations

19. 85
75 76 78 76
72 70
65
55
45
40
19
Smartphone Penetration by Countries (%)
(2017)
Smartphone is also climbing across the region, going mobile is the future
11
13
16
1
5
11
21 22
25 25
30
Evolution of Smartphone Penetration
(percentage points 2017 vs 2014)
Source: Strategic Analytics | Deloitte | Mobile Marketing Association France | DTAC | GSO Vietnam | eMarketer | ITA US | MIC | Telecomasia | China Times | The Oxford Business Group

20. Rapid shifts in how people communicate and get their information
…from a physical to virtual space and from one way to two way communication, driven by digital involvement
20
Consumers are consuming
Media the way they want,
where they want (content,
vehicle, place, time) creating
more difficulties to REACH the
Consumers.
Source: Google -­ Consumer Barometer 2015 -­ Local Report

21. HEALTH & BEAUTY

22. What does today’s “Health” mean to Asian consumers?
22
Source: Kantar Worldpanel
STRONG IMMUNE
SYSTEM
HEIGHT-­WEIGHT
BALANCE
WORK-­LIFE BALANCE
ORGANIC &
UNPROCESSED FOOD
MORE EXERCISE
SELF-­COOKING
NATURAL & SAFE
INGREDIENTS
FRESHNESS
ADDITIONAL NUTRIENTS
& SUPPLEMENTS

23. 23
Vietnamese consumers remain their tremendous care for the health
92 91
URBAN RURAL
§ I worry about my health
more than before
§ I exercise regularly for better
health
80 83
URBAN RURAL
Source: Kantar Worldpanel | Lifestyle Survey | Urban 4 cities & Rural Vietnam
Source: Kantar Worldpanel | Households Panel | Consumer Connection June 2016
| n=525 in Urban 4 cities and n=100 in Rural Vietnam

24. 24
Health also means a healthier beauty
§ I am very conscious about my appearance
56 55 58
44
50 49
2011 2015 2016
§ Nowadays, I am more concerned about
mine and my family weight
71
75
67 68
§ I prefer to buy low/ free sugar drinks
61 69 74
54
65 64
2011 2015 2016
51 55
36 40
§ I prefer to buy low calorie foods
Urban 4 cities Rural
Source: Kantar Worldpanel | Lifestyle Survey | Urban 4 cities & Rural Vietnam
(% households agree)

25. Consumers crave for healthy foods with natural ingredients, additional nutrients as well as
hygiene products
25
Fortified
Liquid Milk
Vietnam
Incremental
penetration
(2016
vs
2014)
+12.8
points
Urban 4 cities
+10.3
points
Rural
Source: Kantar Worldpanel
Growing healthy categories
across Asia
Drinking &
Cup yogurt
SOY
Soy milk
Bottled water
Cheese
Mouthwash

26. 355
187
397
249
476
338
Average spend per buyer (000 vnd)
They also have greater focus on how they look. Having more money, they pay more attention
to beauty products and look for premium offers
26
73 73
75
76
2011 2013 2015 2017
Source: Kantar Worldpanel | Lifestyle Survey 2017 | Household panel | Urban 4 cities
Facial moisturizer Sun protection
Nowadays you have to take
care of your skin more
% Of households agree
2015 2016 2017 2015 2016 2017
Penetration%
High Income Total Urban 4 cities
29% 34%
Make up
25% 30%
Facial Moist

27. CONVENIENCE

28. 28
Consumers place less importance on price and more on convenience & speed. They value
innovations that save them time
Source: Kantar Worldpanel | Lifestyle Survey & Family Form | Urban 4 Key Cities
Price is the most important factor
when grocery shopping
I rely heavily on convenience foods
to make cooking simple and quick
77
68
73
66
2010 2017
24
49
24
44
2010 2017
Urban 4 cities Rural
72%
76%
I would like to have more
products/services which can make
cleaning tasks simple and quick

29. Money rich and time poor proposing opportunities for ready to consume, ready to use
products
29
Home cleaning services
Quick effect products
Multi-­purpose products
1
2
3
Growing convenient categories
across Asia
Meal maker
Instant noodle
Bottled water
Instant rice
Canned food
Quick meal at home4
All-­in-­one products5

30. Consumers also seek for greater convenience in the way of shopping
30
Source: Kantar Worldpanel | Lifestyle Survey & Family Form | Urban 4 Key Cities & Rural Vietnam
I like to spend time just looking around
the shop before deciding what to buy
I don’t mind traveling long distance to
my preferred shop
50 54
49
59
2010 2017
57
51
61
56
2013 2017
It’s near my home or on my way back home
The staff are friendly/ responsive to my request
1
2
3
It has good quality products4
You can easily find what you want5
It’s convenient to get there6
The store is clean
Top 6 reasons for Urban 4 Cities consumers to choose a store

31. They drop their shopping frequency for FMCG
31
411
361
210
170
107
94
352
385
206
162
103
81
123
95
348
396
204
159
99
78
123
96
330
395
201
155
96
76
123
99
Indonesia Philippines Thailand Vietnam
(Urban)
Malaysia China Korea Taiwan
2012 2015 2016 2017
Frequency overtime across Asia
Source: Kantar Worldpanel | Consumer Insights Asia

32. 32
61.2 59.3 60.0
11.8
9.6 7.6
4.2 7.5 7.9
14.8 13.2 12.0
2.0
0.6 0.2
0.9
3.4 8.0
0.1 0.8
2.2
2012 2017 2025F
Total Street Shops Wet Market Specialty Stores Hyper & Supermarkets Cash & Carry CVS + Minimarkets Online
Source: Kantar Worldpanel – Households Panel – Urban Vietnam 4 key cities – FMCG excluding Gift – Value%
Proximity and convenience channels are leading the growth and will continue to thrive
+0.7
+2.5
+3.3
+1.4
+4.6
+0.4

33. 33
Minimarts and convenience stores as convenient formats are stealing occasions from other
channels and growing ahead of the market not only in Vietnam but across Asia
Source: Kantar Worldpanel | One year ending September 2017
+27%
+14% +14%
+7%
+5% +5%
+3%
Vietnam
(Urban 4)
Korea Philippines Taiwan Thailand Malaysia China (Urban)
Over index
Under index
Growth index vs. FMCG
% Value growth of minimarts & convenience stores

34. The need for more convenient lives will also support the development of online shopping
Source: Kantar Worldpanel
Benefit of online shopping

35. Global FMCG ecommerce is driven by Asian developed markets such as South Korea,
China,… and is expanding into new Asian markets like Thailand and Vietnam
35
19.7%
6.2% 5.8%
0.8% 0.7% 0.8%
7.5%
5.6%
1.5%
South Korea China Taiwan Malaysia Thailand Vietnam UK France US
Source: Kantar Worldpanel | Total FMCG 2017
Value Share of FMCG E-­Commerce
+41%
+52% +36%
+68% +109% +74%
+8%
+7%
+5%

36. INDIVIDUALISM

37. 37
Grooming,
Active & interactive,
Convenient & Impulsive
More health concern
Subtle needs
Less skeptical
< 40 YO
≥ 40 YO
Source: Kantar Worldpanel | Lifestyle Survey 2017 | % agree
I exercise regularly for better health
I don't mind paying more to purchase better/new products
I believe in benefits claimed by products
< 40 YO ≥ 40 YO
28 35
54 61
70 85
I am very conscious about my appearance 56 50
60 47
I often impulsively buy products I see on in-­store displays 25 20
I surf Internet to get updates about the world rather than
traditional media
More polarization: Socializing trend among young adults and cocooning trend among seniors
– more in-­home indulgence

38. 38
Total Imports
to Vietnam
Korea
Japan
Thailand
+16%
+6%
Growth vs YA
Malaysia
Indonesia
+6%
+22%
+8%
Source: GSO Vietnam & Kantar Worldpanel | Lifestyle Survey | Urban 4 cities & Rural Vietnam
§ I would buy more international brand if the
price was the same as the local brands
§ International brands are of higher
quality
International
Confectionary
International
Milk Powder
International
Hair Conditioner
International
Show Gel
With the open door through FTAs and higher purchasing power, consumers have higher
demand for quality and express more preference towards international & imported products
53 58
31 35
2013 2017
59
66
30
37
2013 2017
Urban 4 cities Rural

39. They also place greater emphasis on leisure and personal indulgence
39
I would like to see more new products
to ease my life
URBAN 4 CITIES
59% 44% in 2010
68% 60% in 2010
I am prepared to pay more for products
that make my life simpler
Source: Kantar Worldpanel | Lifestyle & Expenditure Survey 2017 | Urban 4 cities
I would like to see more new products
to pamper/indulge myself 39% 32% in 2010
% SHARE OF HOUSEHOLD WALLET (2017 vs. 2010)
Travel/holiday
+0.5 pts
Entertainment
+0.4 pts
% OF HOUSEHOLDS AGREE
Basic necessities
(housing, transport, communication)
-­2.6 pts

40. OMNICHANNEL

41. 2013
Source: Kantar Worldpanel | Lifestyle Survey 2016 & Households Panel | Urban Vietnam 4 Key Cities
“I like to buy all my groceries in
one shop”
Shoppers are increasing their repertoire of stores, and for some they nearly visit 7 channels in
one year…
Number of channels visited per year
6.0 6.3
Among HHs agree
6.2
Among HHs disagree
6.8
2017
71 70
68
55
57 56
2012 2013 2014 2015 2016 2017

42. Convenience – Value for Money – Digital are expected to be key shopper trends for 2025
42
Digital
Convenience
Value for
Money
§ MINISTORES
§ ONLINE
§ PROVISION STORES
§ SPECIALTY STORES
§ MOM & POP
§ WET MARKET
§ CASH & CARRY
WINNERS
Retailers are investing in
consumers needs: Smart
and aspirational shopper
LOSERS
Less competitive in
adapting to shopper needs
OmniChannel Old model

43. Future path to purchase
Crossover shopping will accelerate and Omni shoppers will become more common. Existing e-­tailers will be
trying to enter the offline market, and existing offline retailers will be trying to develop their online business.
Fusion of online and offline
New hybrid models
Strategic partnerships
New technologies
Trends to shape future consumer journey:

44. 1. Fusion of online and offline
44
Leverage the existing networks of brick-­and-­mortar stores for fast delivery or bring shoppers back to stores to
pick up products via online orders, smoothing shopping experience
7-­eleven also hosts an
extended marketplace
through which customers
can pay and pick up in
store
http://www.Shopat7.Com/
Alibaba’s Hema supermarket
offers shoppers a ‘new retail’
experience
LOTTE Mart launches mobile
shopping app “Speed Lotte”
with many incentives in
Vietnam

45. 2. New hybrid models
Click-­and-­Collect, Click-­and-­Drive, grocery delivery, subscription models, social commerce
45
Leverage nationwide store
footprints to expand click-­and-­
collect model
New subscription laundry brand

46. 46
Co.op Smile – A new retail format that bridges the gap between traditional and modern trade in Vietnam
Franchise in
partnership with
current street shop
owners
Hybrid format
between medium-­
sized street shops
and convenience
stores
The aim is to have
one store on every
corner of residential
areas
a pick-up point
for online
orders
Allows shoppers
to also pay utilities
bill and wire-­
transfer money
Features air-­
conditioner and
parking
2. New hybrid models

47. 3. New data led technologies
Voice activated products encourage shoppers to give up non-­experience products in favour of auto-­
replenishment. Virtual and augmented reality keep them more engaged in the online shopping experience
47

48. 4. Strategic partnerships
New blurring alliances between retailers and e-­retailers
48
JD.com and Walmart Amazon and Whole Food

49. In Vietnam, the rising wave of M&A between international giants and local businesses, blending global thinking
with local executions
4. Strategic partnerships

50. How does the retail industry evolve today in Vietnam?
Though it’s currently not significant and just at a first step of investment, things could be changed very quickly
tomorrow
50
The integration of offline
and online and vice versa
The rise of omnichannel
shopping
The evolution from
independently-­owned
stores to retail chains
Offline Online Single Multi Independence Chain

51. How is the retail landscape moving today in Vietnam?
51
Hybrid franchise
format between
medium-­sized street
shops and
convenience stores
Supermarket
Hypermarket
Convenience
store
Minimart
Pharmacy
Click &
delivery
website
Click &
Delivery
Supermarket Convenience
stores
Click
&
Delivery
MOBILE WORLD
BRICK-­AND-­MORTAR STORES: Local players are proactively stretching their retail portfolio to meet
Omnishoppers

52. How is the retail landscape moving today in Vietnam?
52
Hypermarket
Click &
delivery
mobile app
Hypermarket
Emart Mall
click &
delivery
mobile app
Click &
delivery
website
Hypermarket
entertainment
complex
Click &
delivery
website
BRICK-­AND-­MORTAR STORES: Foreign players are continuously pouring money into developing multiformats
and are expected to bring new things for Vietnamese shoppers
Convenience
store

53. How is the retail landscape moving today in Vietnam?
Online orders are on the rise with O2O (online to offline) delivery services, offering convenience and speed
53
PURE ONLINE
PLAYERS
THIRD PARTIES

54. How is the retail landscape moving today in Vietnam?
New things are emerging: more players and more store openings
54
MODERNIZED
SPECIALTY STORES
LIFESTYLE STORES
27 stores in 2017 38 stores in 2017 6 stores in 2017
Drug storesBaby stores

55. 55
Strong
urbanization rate,
smaller family
size, more working
women, younger
shoppers & users
Higher
aspirations and
purchasing power
#1 #2 #3
Ministores and
E-­commerce
will still be the
fastest growing
channels
#4
#5 #6 #7
Greater demand
for convenience
and quality
Making
consumers’
well-­being a
priority
7 POINTS TO REMEMBER
Millennials –
hard-­won future
shoppers
Omni-­channel
strategies
to win omni-­
shoppers

56. 56
For further information
please contact:
Nguyen Huy Hoang, Commercial Director
Mobile: +84 985247503
huyhoang.nguyen@kantarworldpanel.com
Thank You!