2008 vs 2009

Consumer Trends Agenda

! Half year 2008 vs half year 2009

! Wealth
! Inflation / Consumption
! Consumer concerns
! Branding
! Media
! Environment
Half year 2008 vs half year 2009 Comparison

2008 2009

GDP growth = 8.5% - Oct " GDP growth = 4.5% - Oct

FDI (US Billion) = $45 B - Oct " FDI (US Billion) = $23 B - Oct
Inflation (CPI) = 22% - Oct " Inflation (CPI) = 4.5% - Oct
Exports** = $48 B - Sept " Exports** = $42 B - Sept
Overseas remittance = $8 B - Dec " Overseas remittance = 6.7 B - Dec
Consumer confidence = 94% " Consumer confidence = 86%
(economy same/ better in next 12 months) (economy same /better in next 12 months)
Ad expenditure growth = 16% " Ad expenditure growth= 23%
FMCG growth* = 20% " FMCG growth* = 8%
Modern trade growth* = 27% " Modern trade growth* = 10%
Internet users growth = 23% " Internet user Growth = 25%
Car sales^ = 30% " Car sales^ = -19%

Overall growth spend at half year is down by 25% compared to 2008

While economic indices show a decline of over 50% in growth
Source: GSO /TNS * Value growth / TNS Worldpanel ^VAMA – end of August **Exports = End of September 09
Vietnam by the numbers - half year 2008 vs 2009
Inflation down by 80%

Ad spend growth up by 23%

Internet growth up by 20%

GDP down by half

Ha
l
fy
ea
FDI down by half

rc
om
Exports down by 15%

pa
ris
FMCG growth down 12%

on
Modern trade growth down by 17%

Car sales are down by 19%

As FDI & Exports accounted for US $120 Billion of the VN economy in 2008,
VN will struggle moving forward, with only US $80 Billion in 2009 (est.)
Wealth Trends
GDP per capita evolution - USD
In USD
1,200
1,024
1,024 1,075

1,000

835
800
725

600 552

402 440
400
289

200

1995 2000 2002 2004 2006 2007 2008 2009 Est.

Vietnam’s GDP has doubled in 4 years, but only by 5% in 2009

Source: GSOVN
HCMC Declared Monthly Household Income

2008 5 14 26 12 32 3 8
SEC Income Scale
A1 = US $1,200 +
A = US $801 -1,200
2006 7 27 31 11 18 2 4 B = US $401 - 800
C = US $400 - 276
D = US $181 - 275
E = US $126 - 180
20 37 20 5 12 4 2
F = US $ 45 - 125
2004

2001 24 34 20 6 11 5

1999 30 27 23 12 5 3

0% 20% 40% 60% 80% 100%

SEC F SEC E SEC D SEC C SEC B SEC A SEC A+

A-B-C SEC has more than doubled in the last 4 years (+59%)
Source: TNS VietCycle: 1999-2008
Base: N = 1,000
 Hanoi Declared Monthly Household Income

2008 1 7 35 23 31 12

SEC Income Scale

A1 = US $1,200 +
A = US $801 -1,200
2006 6 26 38 10 18 02
B = US $401 - 800
C = US $400 - 276
D = US $181 - 275
E = US $126 - 180
2004 26 44 20 4 5 1 F = US $ 45 - 125

2001 46 36 11 3 31

1999 40 37 14 5 31

0% 20% 40% 60% 80% 100%

SEC F SEC E SEC D SEC C SEC B SEC A SEC A+

A-B-C SEC has almost doubled in the last 2 years

Source: TNS VietCycle: 1999-2008
Base: N = 1,000
Consumer Concerns
Quality of product and value for money

The Chinese Milk scare could be felt for years &

will make consumers more quality conscious
Vietnamese main fears in life - 2009

Health of my family 64%

Personal health 48%

Unemployment 39%

Financial stability 35%

Global recession 17% TNS Consumer Poll - Jan. 09

Health still tops consumers main fears, followed by money matters

My personal standard of living forecast
Far better A little better Same A little worse Far worse Don't know

T NS Consumer Poll -
Jan. 09 9 27 46 16 10

T NS VietCycle - Sept. 08 16 54 25 40
1

T NS VietCycle - Nov. 06 18 48 32 20

Vietnamese personal standard of living forecast for the next 12

months has dropped from 70% forecasting a better living standard
in September 2008 to only 36% in January 2009
Source: TNS VietCycle 2006 / 2008 & TNS Consumer Confidence Poll – Jan. 09
Will you reduce spending in 2009?

Don’t
know
2%

No
46%
Yes
52%

Over half of consumers shall reduce their monthly spending in 2009

Source: TNS Consumer Confidence Poll – Jan. 09

 Consumers spending reduction in 2009?
Base: All n = 500

Less Same More Don't know

Entertainment & dining out 44 54 20

Home appliances (Wash machine, T V Hifi, etc) 29 69 2

Major
Decrease Household utilities 28 70 20

Personal equipment (mobile phone, laptop ,Etc) 28 69 30

Communications telephone/ fax/ email 25 71 40

Personal care products 23 73 40

Less than T ransportation 23 73 4

25%
House hold care products 23 74 30

Food & beverages products 16 81 4

Health care products/ services 12 76 12 1

Education 4 72 23 1
Stable

Only education and healthcare seem to be unaffected

by the Global economic recession

Source: TNS Consumer Confidence Poll – Jan. 09

Brand impact
 Advertising Brand Consumer Cycle

“Brand aspirations and the

brand as an extension of the
consumer are now the norm
in Vietnam” BEYOND THE
Ralf Matthaes BRAND
(Post Modern Mktg)
BRAND AS ICON Niche Market
Needs Based Segmentation
(Customer Driven Brand Includes Company
Marketing)
BRAND AS Saturated Market
LOW Usage Segmentation
PERSONALITY Stage 5:
COMPETITION Symbolic Ads
(Classic Branding) Self-fulfillment

BRAND AS Intense Competition

Psychographic Segmentation
REFERENCE Emotional / Lifestyle Ads Stage 4:
(Marketing) Esteem
Increasing Competition Stage 3:
NO BRAND Demographic Segmentation
Social
(Commodity Selling) Rational Ads
recognition

Products have Power

No Segmentation Stage 2:
No Advertising Upgraded
needs

Stage 1: NAÏVE COMPETITION

Basic needs
Vietnamese Brand Perceptions
I am equally concerned about 81
Price and quality
I prefer brands with a health / 73
environmental focus

I’m willing to pay more for 71

higher quality brands

I like to use the brand which 56

shows my success

I prefer to buy well-know brands 56

Vietnamese brands are as good 50

as international brands

I prefer local Vietnamese brands 39

There are no real differences between 32

the brands available in the market
0 10 20 30 40 50 60 70 80 90

International / healthy / badge value brands and brands of

high quality are still much more preferred by VN consumers
Source: VietCycle 2008- September 2008
Vietnamese brand perceptions are changing
“My children will be very
i a l
c
intelligent and grow-up faster
as I feed her by a good quality
powder milk. I feel that I am a
good mother”
S o
P e o p le
“
m o th e s a y th a t I
qualityr because I am a moder
m y g r e b r a n d s fo r c h o o s e g o o n
a t lo v e m d
fo r m y y b a b y . It s h
c h ild r e ow s
n”

E C OG N I TI O N
R
“I always choose the most expensive
detergent which I think it has the best
quality and good for my families clothes.
I feel happy when my husband says to
others that I am a good housewife”
Source: TNS 2007-2008 FGD’s
 10 fastest growing brands – Half year - 2009
25%
Value Share change%
22%
Market share movement

15%

12%

10% 10% 9%
9%
8% 7%

VFRESH CHINSU KOTEX VFRESH STING TRANG TUONG AN FAMI (Soya DIELAC VINAMILK
(Soya milk) (NAM NGU) (Pantyliner) (Fruit juice) TIEN (Margarine) milk) ANPHA 1 (UHT)

In 2007, 2 of the fastest growing brands were, Vietnamese, in 2008

= 4 and thus far in 2009 = 8 were Vietnamese Thus, meaning that
Vietnamese brands and the Gov’t initiative to buy local is working
Source: TNS Worldpanel
Top-of-mind brand awareness

Top 5 foreign brands are among key technology and durables

manufacturers

Top 5 local brands are more light manufacturers.

It is interesting to see Honda in the list of Vietnamese
brand…

Source: VietCycle 2009

Perception of luxury - 2009

Plasma
Car Diamond Dish washer
TV
54% 31% 15%
13%

Overseas Home
Laptop Security
holiday theatre
9% 9%
11% 9%

Gold Cars and Diamonds are House

Jewelry seem as true luxury items
7%
8%

Source: VietCycle 2009

Internet us@ge
Top 20 countries - internet users
China 338

United States 227.63

Japan 94

India 81

Brazil 67.51

Germany 55.22

United Kingdom 48.76

France 42.05

Russia 38

Korea South

Italy

Spain
37.47

29.14

28.63
@
Mexico 27.40

Turkey 26.50

Indonesia 25

Canada 23.99

Iran 23

Vietnam 21.53

Poland 20.02

Argentina 20

Vietnam is now the 18th most active user of the internet globally.

Source: WorldInternetstats.com – July 2009

In-home Internet penetration (Hanoi & HCMC)
40
34

30

21
20

9
10 8

0
1999 2001 2004 2006 2008

With 1 in 3 urban homes connected to internet,

Internet based advertising will experience steady growth

Source: TNS VietCyle – 1999-2008 – HCMC & Hanoi

Monthly Internet Expenditure
US$36M
Monthly Personal Spending on the Internet (VND) monthly

Total (4 cities) 174,071

Ho Chi Minh City 191,145

Hanoi 155,155

Da Nang 133,258

Can Tho 115,475

Net users spend an average VND174,000

or US $10 per month on the Internet
Base: Past month internet users aged 15+ across all 4 major cities
who have home internet access
Source: Yahoo!-TNS Net Index 2008
Online User Profile
Age Gender Marital Status

15%
35% 8% 40+ 37%
44%
10% 52%
35-39 64%
Female Married &
12% 18%
30-34 Others
12% Male
Single
24% 25-29
14% 63%
20-24 56%
48%
14% 36%
26% 15-19
14%

General Netizen* General Netizen* General Netizen*

Skewed towards young (68% <29 years), Male (56%) and Single (63%)
A Shift in Advertising
Advertising spend breakdown - 2008
Internet (est.)
Magazines 0.4%
8%
Newspapers ,
16%

Radio
0.6%
TV 75%

TV Radio Newspapers Magazines Internet (est.)

TV is King and has grown to 80% in 2009, as

advertisers are returning to the tried and trusted

Source: TNS Media Co.

Top 4 Daily Home activities

66%
7%
7%
4%
7%
TV dominates followed by reading, using the computer
and watching movies and listening to music

Source: VietCycle 1999-2008

Media Reach
2006 2007 2008
(%)
99 99 100

83 85 84
77
73 76

62 60 62 62 64
57
51 52
44 42
33
27

15
11 11

TV (Past Week) Outdoor (Past Newspaper Magazine (Past DVD/VCD/Tape Radio (Past Cinema (Past 3 Internet (Past
Week) (Past Week) Week) (Past Week) Week) Months) Week)

TV is still King… but Internet is by far the

fastest-growing medium

Base: Males and Females aged 15+ across all 4 major cities (Ho
Chi Minh City, Hanoi, Da Nang and Can Tho)
Source: TNS Media Habits Survey (2006-2008)
 Media Exposure Trends
Time Spent Per Day (Mins)

295

253 2006 2007 2008

233

46 45 46 43
22 24 21 22 30
9 10 8

TV Newspaper Magazine Radio Internet

Time spend watching TV has decreased by 1 hour per day since 2006,
while Internet is the only medium growing (21 minutes / day)
Base: Males and Females aged 15+ across all 4 major cities (Ho Chi Minh City,
Hanoi, Da Nang and Can Tho)
Source: TNS Media Habits Survey (2006-2008)
 Ad spend half year 2008 vs half year 2009
250,000
(,000)
230,000

200,000
2009
2008

2008
2009
171,000

150,000 TV ad spend has increased by 26% and

Newspaper increased by 12%, while both
Magazine & Radio have dropped.
100,000
Total ad spend is up by 23% compared to 2008

50,000 42,050
36,980

20,500 20,429

937 828
0

TV Newspapers Magazines Radio

Top 6 Growth Sectors ad spend
Half yr 2008 vs half yr 2009
The Beverage sector, followed by
Telecoms has experienced the highest
70,000,000
growth in Ad spend, followed by Foods,
66%+ Beauty Care, etc. Ironically, sector
60,000,000
spend does not necessarily translate
into category growth in terms of sales
35%+
50,000,000
34%+

40,000,000 93%+

30,000,000

15%+
20,000,000 42%+

10,000,000

-
Telecoms Food Hygiene & Beverages Pharmaceuticals Household
beauty care products

2008 2009

Source: TNS Media - June 2008-June 2009

Top 6 declining Sectors ad spend
Half yr 2008 vs half yr 2009

Not surprisingly, the finance

-65%
14,000,000
13,086,280
sector has seen the highest
decline in ad spend in the past
12,000,000 12 months, followed by
-36%
Automotive, who’s sales have
10,000,000 9,233,583
dropped by 19%
-21%
8,000,000 7,630,154
-29%
6,174,207
6,031,925 -13%
6,000,000 5,966,609 -12%
4,962,512
4,629,849 4,675,415
4,425,797
4,323,077 4,116,805
4,000,000

2,000,000

0
Financial Automotive Computer & Household Retail Travel &
Audio Video Appliances Tourism

2008 2009
Environment
Environmental awareness
I would be willing to pay 10% more for groceries/products that are more environmentally friendly
Strongly agree Somewhat agree
Somewhat disagree Strongly disagree
Ave
India 51 42 5 2 3.4

Chinese mainland 38 55 6 1 3.3

Philippines 44 46 9 1 3.3

Indonesia 41 47 11 1 3.3

Malaysia 28 55 14 3 3.1

Thailand 26 56 17 1 3.1

South Korea 22 58 18 2 3.0

Singapore 15 55 27 3 2.8

Hong Kong 15 54 27 4 2.8

Japan 10 54 33 3 2.7

New Zealand 15 38 34 13 2.6

Evidence of increasing concern across Asia…

Source: Grey Group study
Forecast in the next 12 months
Environmental Pollution

Far better A little better Same A little worse Far worse Don't know

T NS Consumer Poll -
Jan. 09 5 22 9 27 36 0

T NS VietCycle - Sept. 08 5 17 27 40 12 0

T NS VietCycle - Nov. 06 7 22 23 37 9 0

In a short time consumer sentiment towards the worsening

of Vietnam’s polluted environment has increased by 300%!

Source: TNS VietCycle 2006 / 2008 & TNS Consumer Confidence Poll – Jan. 09
How do we rate Vietnam’s environment?
By SEC, age group and gender
Quality of Vietnam environment

Very bad Fairly bad Fairly good Very good

AB (n=283) 25 52 20 3
CD (n=539) 25 57 16 1
EF (n=173) 28 47 22 2
Teenagers (n=195) 18 60 20 2
Young Adults (n=185) 32 53 14 1
Mature (n=296) 21 54 23 2
Older (n=324) 29 51 17 2
Male (n=503) 26 53 19 1
Female (n=497) 24 55 18 3
We can see the next generation of adults (teens)
are quite skeptical of the environmental
situation.
Base: All respondents
What are we doing to look after the environment?
Current actions vs Perceived most important action

69
Not littering
45
51
Use less energy (gas, electriccity)
13
45
Use less w ater
5

39
Less use plastic bags
7
Recycle / separate w aste items f or 34
recycling 13

Use energy saving bulbs / solar 26

pow er lights 4

Walk or use more bicycle / electric 20

bicycle 4 Stopping littering is
17 considered the #1 action
Use more public transport
3 to fight environmental
Less use of motorbike / take more
public transport
13 pollution
2

Most important Actions

Source: VietCycle 2009

Environmental Brand Perceptions
“7 out of 10 consumers “say” they
prefer to buy environmentally

ta l l y
n
friendly products, …but do they?

n m e ?
v i ro n d l y
En F r i e
Feeding hungry
mouths and buying
aspirational brands,
rules in Vietnam

No brand in Vietnam o b i le
e m ym
has an image of being
c a n us s o c ial
environmentally friendly,
friendly “I o w m y
i t y”
to s h ona l
but lots of companies p e r s
u s &
have the opposite image! stat
Source: TNS VietCycle
So let’s smarten up
&
start to clean up!
Is the glass half full or half empty - Synopsis

Overall spend has continued to increase on almost all

consumer categories, but growth has declined by 15% to 50%
compared to 2008.

Not all sectors have been impacted the same…

Telecoms / Food / Beverages / Pharmaceuticals / Household Products /
Education have all maintained steady if not staggering growth

Electronics / Automotive / Travel-tourism, Computer-Audio video /

Finance-banking, beauty-personal care and real estate have all seen a
mild to steep drop off
Is the glass half full or half empty - Synopsis
Inversely, big ticket items such as cars and computers,
banking and real estate products have all been relegated to a
later date, during these times of uncertainty.

Bottom-line:
Glass is half empty due impact of global recession (EXORTS
/ FDI/ MR)
Glass is half full due to strong performance of domestic
market
Glass is full compared to the rest of Asia as Vietnam is 1 of
only 5 Growth economies in the region
Ralf.matthaes@tns-global.com
www.tnsglobal.com
s o f s u p p o r t
u f o r 1 3 y e a r
Thank y o