The Retail Revolution - Hong Kong Business Association Vietnam
The Retail Revolution - Hong Kong Business Association Vietnam
The Retail Revolution - Hong Kong Business Association Vietnam
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
<strong>The</strong> <strong>Retail</strong> <strong>Revolution</strong><br />
<strong>Vietnam</strong> 2009<br />
Ralf Matthaes<br />
managing director<br />
TNS <strong>Vietnam</strong><br />
June 30, 2009
<strong>The</strong> <strong>Retail</strong> <strong>Revolution</strong> in <strong>Vietnam</strong><br />
Population & Wealth<br />
Consumption<br />
<strong>Retail</strong> trends
Population & Wealth
2 nd youngest population in Asia<br />
<strong>Vietnam</strong><br />
38<br />
19<br />
21<br />
13<br />
8<br />
Philippines<br />
38<br />
20<br />
22<br />
14<br />
6<br />
India<br />
35<br />
20<br />
22<br />
17<br />
6<br />
Malaysia<br />
35<br />
19<br />
24<br />
16<br />
6<br />
Indonesia<br />
34<br />
19<br />
23<br />
17<br />
7<br />
China<br />
27<br />
18<br />
26<br />
20<br />
9<br />
Thailand<br />
27<br />
19<br />
27<br />
19<br />
7<br />
Taiwan<br />
24<br />
18<br />
27<br />
21<br />
11<br />
Singapore<br />
23<br />
15<br />
30<br />
24<br />
10<br />
S Korea<br />
23<br />
18<br />
28<br />
21<br />
9<br />
<strong>Hong</strong> <strong>Kong</strong><br />
19<br />
14<br />
30<br />
23<br />
14<br />
Japan<br />
16<br />
15<br />
20<br />
29<br />
21<br />
0% 20% 40% 60% 80% 100%<br />
0-14 15-24 25-39 40-59 60+<br />
<strong>Vietnam</strong>’s consumption days are still ahead - 57% under 25<br />
Growth Rate estimated in 2006<br />
**Source: GeoHive (www.xist.org/earth/)
3 rd largest female working population in Asia<br />
China<br />
79.2<br />
88.8<br />
Thailand<br />
77.7<br />
89.7<br />
Female(%)<br />
<strong>Vietnam</strong><br />
77.3<br />
83.5<br />
Male (%)<br />
Korea<br />
59.7<br />
79.9<br />
Indonesia<br />
59.5<br />
84.7<br />
Philippines<br />
52<br />
82.6<br />
Malaysia<br />
51.9<br />
81.4<br />
Taiwan<br />
51.2<br />
76.2<br />
Female consumers will become more and more important<br />
Employment%:<br />
*Data estimated in 2003<br />
*Source: Asian Development Bank (ADB)- Key Indicators 2005 (www.adb.org/statistics)
Smallest urban population in Asia<br />
100 99<br />
82 76 69<br />
47<br />
40<br />
Singapore <strong>Hong</strong>kong N.Z. Aust ralia Taiwan Korea Japan<br />
66<br />
55<br />
48<br />
43<br />
29 29 27<br />
Mal aysi a Indonesi a Phi l i ppi nes Chi na Indi a Thai l and VN<br />
<strong>Vietnam</strong> shall experience an urbanization explosion like China<br />
Source: Country Statistics Offices
GDP per capita evolution - USD<br />
In USD 1,200<br />
1,024 1,075<br />
1,024<br />
1,000<br />
835<br />
800<br />
725<br />
600<br />
552<br />
400<br />
289<br />
402 440<br />
200<br />
0<br />
1995 2000 2002 2004 2006 2007 2008 2009 Est.<br />
<strong>Vietnam</strong>’s GDP has doubled Source: <strong>Vietnam</strong> in 4 Economic yearsTimes – KINH TE 2007-2008<br />
Source: GSOVN
SEC Scale<br />
A = US $1,001 +<br />
B = US $1,000 - 501<br />
C = US $500 - 351<br />
D = US $350 - 251<br />
E = US $250 - 151<br />
F = US $150 below<br />
An Urban Upper class is emerging<br />
Monthly declared household income<br />
2008<br />
37<br />
55<br />
9<br />
2006<br />
21<br />
55<br />
24<br />
2003<br />
14<br />
36<br />
50<br />
2001<br />
12<br />
32<br />
56<br />
1999<br />
7<br />
31<br />
62<br />
0% 20% 40% 60% 80% 100%<br />
SEC AB SEC CD SEC EF<br />
Over a 3 rd of urban households now earn more that US $500 / month,<br />
while less than 10% of households can not afford branded products<br />
Source: TNS VietCyle – 1999-2008 – urban only
Population impact on retailing<br />
Youth will drive Modern retailing, as they have no<br />
loyalty to traditional trade<br />
Female consumers have money and wear the pants<br />
<strong>The</strong> bigger the Urban Population the more Modern<br />
<strong>Retail</strong>ing<br />
As Incomes grow, so will spend on<br />
shopping<br />
New wealth segments are developing,<br />
requiring new and sophisticated<br />
shopping venues
Consumption Trends
Fast Moving Consumer Goods Spend - 2008<br />
51.3<br />
51.0<br />
6.5 mil<br />
vnd plus<br />
3.5 mil -<br />
6.5 vnd<br />
Below<br />
3.5vnd<br />
13.7<br />
19.9<br />
18.0<br />
2007 2008<br />
8.0<br />
4.4<br />
All Households High Income Middle Income Low Income<br />
Value growth per year<br />
2007 2008<br />
-16.3<br />
% Value Change 07 vs. 06 % Value Change YTD P10/08 vs. P10/07<br />
Wealthy consumers are driving FMCG spend<br />
Source: TNS Worldpanel
FMCG Growth Rate Q.1 2009 vs Q.1, 2008<br />
19<br />
12<br />
11<br />
10 10<br />
9<br />
4<br />
<strong>Vietnam</strong><br />
China Malaysia Thailand Philippines S. Korea Taiwan<br />
<strong>Vietnam</strong> is experiencing the fastest FMCG growth in Asia<br />
FMCG Trends % value Changes – Source: TNS Worldpanel Asia
2009 consumer spend reduction<br />
No<br />
46%<br />
Don’t<br />
know<br />
2%<br />
Yes<br />
52%<br />
Base: N = 500<br />
Over half of consumers shall reduce their monthly spending in 2009<br />
Source: TNS Consumer Confidence Poll – Jan. 09
Consumers spending reduction in 2009?<br />
Base: All n = 500<br />
Less Same More Don't know<br />
Entertainment & dining out<br />
44<br />
54<br />
20<br />
Major<br />
Decrease<br />
Home appliances (Wash machine, TV Hifi, etc)<br />
Household utilities<br />
29<br />
28<br />
69<br />
70<br />
2<br />
20<br />
Personal equipment (mobile phone, laptop ,Etc)<br />
28<br />
69<br />
30<br />
Communications telephone/ fax/ email<br />
25<br />
71<br />
40<br />
Personal care products<br />
23<br />
73<br />
40<br />
Less than<br />
25%<br />
Transportation<br />
23<br />
73<br />
4<br />
House hold care products<br />
23<br />
74<br />
30<br />
Food & beverages products<br />
16<br />
81<br />
4<br />
Health care products/ services<br />
12<br />
76<br />
12<br />
1<br />
Stable<br />
Education<br />
4<br />
72<br />
23<br />
1<br />
Food spend shall reduce by around 15%,<br />
while personal and Home care by over 20%<br />
Source: TNS Consumer Confidence Poll – Jan. 09
<strong>Retail</strong>er Trends
2008… <strong>Vietnam</strong> tops A.T. Kearney’s annual list of most<br />
attractive emerging market retail destinations<br />
As of Q.2, 2009, <strong>Vietnam</strong>’s s ranking has fallen to 6 th Globally
<strong>Retail</strong> environment in Asia - 2007<br />
T<br />
48<br />
51 54 55 60<br />
33 34<br />
18<br />
Asia <strong>Vietnam</strong> Phil Thailand China Taiwan Korea Malaysia<br />
Asia<br />
<strong>Vietnam</strong><br />
Philippines<br />
Thailand<br />
China<br />
Taiwan<br />
Korea<br />
Traditional Trade Modern Trade<br />
Malaysia<br />
Though small, Modern trade will grow substantially in <strong>Vietnam</strong><br />
Source: TNS Worldpanel Asia – 2007
Trade Channel Trend in a recession<br />
Value Shares % - % Value Changes vs. Previous Year<br />
61.5 61.5 62.3<br />
Grocery Store<br />
14 13.3 12.3<br />
Market<br />
17 18 18.7<br />
Modern Trade<br />
Other<br />
4.8 4.7 4.4<br />
MAT Q1<br />
07<br />
MAT Q1<br />
08<br />
MAT Q1<br />
09<br />
Specialty<br />
MT appears Grocery to be growing during the Specialty recession in terms of dollar<br />
Market<br />
Others<br />
value Modern Trade spent per outlet type and has been for some time.<br />
Source: Kantar Worldpanel <strong>Vietnam</strong>
Monthly modern trade shopping usage<br />
Cash & Carry<br />
11%<br />
Cash & Carry = 11%<br />
Hypermarket<br />
8%<br />
8%<br />
Hypermarket<br />
Mini market<br />
2%<br />
Mini Market<br />
2%<br />
Have not shopped = 50%<br />
Supermarket = 29%<br />
Supermarket<br />
29%<br />
Have not shopped<br />
50%<br />
Supermarkets are dominating Modern Trade in 2008<br />
Source: TNS Worldpanel
Increased spending at modern trade<br />
1900<br />
1700<br />
1500<br />
Spend / buyer<br />
(‘000 VND)<br />
1,480<br />
1,796<br />
1300<br />
1100<br />
900<br />
700<br />
777<br />
1,071<br />
500<br />
2003 2005 2007 2008 (MAT<br />
2008/11/02)<br />
TOTAL FMCG<br />
FMCG spend on modern trade has more than doubled in 5 years<br />
Source: TNS Worldpanel
Health-related categories are booming - 2008<br />
97<br />
86<br />
77<br />
63<br />
48 46<br />
40<br />
36<br />
32 31 29 29 27 26<br />
23<br />
19<br />
TOTAL FMCG<br />
RTD tea<br />
Milk Pasteurized<br />
Sun Protection<br />
Toner/Astringent<br />
Energy drink<br />
Tonic food drink<br />
Infant Milk<br />
Powder<br />
Cooking oil<br />
Adult diaper<br />
Ice Cream<br />
Milk Powder<br />
Baby diaper<br />
Margarine<br />
Fragrances<br />
Instant coffee<br />
Growth Rate in VALUE (%)<br />
Healthy Beverages, Skin Care & Foods are<br />
becoming a staple in most shopping baskets
# 1 Purchase Item – Fresh Food<br />
18 3<br />
FMCG<br />
Fresh food<br />
Other channels<br />
Modern Trade<br />
Modern Trade plays a secondary role in selling Fresh Food<br />
On average, one household spend 1,000,000 VND/ month for Fresh Food<br />
purchase in Wet Markets while their expenditure for Fresh Food in Modern<br />
Trade is only 40,000 VND/ month<br />
Source: Fresh Food panel - 2006
Modern trade impact on <strong>Retail</strong>ing<br />
Modern trade is <strong>Vietnam</strong>’s s fastest growth channel<br />
and will change not only shopping habits, but will<br />
change all elements of society<br />
Presently supermarkets dominate modern trade<br />
outlets<br />
Modern trade spend has doubled in 5<br />
years<br />
Fresh produce still dominates overall<br />
shopping items purchased (60%<br />
Plus)
What retailers need to do to survive?<br />
Understand better what customers want and need in<br />
terms of…<br />
Product selection<br />
Pricing – low – mid - high<br />
Store layout & service<br />
Category management & stock<br />
For More information contact TNS, the only<br />
company to measure modern trade in <strong>Vietnam</strong>
Thank You / Cam On<br />
ralf.matthaes@tns-global.com<br />
www.tnsglobal.com
Change language