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www.ifmresearch.com 1
THE GOAT IN REVIEW / THE MONKEY PREVIEW VIETNAM CONSUMER TRENDS 2015 – 2016
Ralf Matthaes Managing Director Infocus Mekong Research
www.ifmresearch.com 2
79 68
56 51
82 86
0
10
20
30
40
50
60
70
80
90
100
2011 2012 2013 2014 2015 2016
A massive increase in Consumer and Business confidence over last 18 months indicates that Consumer spend and business expansion should be on the rise.
Consumer Confidence Index (%): TNS 2011-2015 & Infocus CCI 2016 | Urban only
x
2011 - 2016 Confidence Indices
79
48
56
78 59
X Business Confidence Index (%): Euro Cham Vietnam
www.ifmresearch.com 3
25%
48%
47%
18%
15%
11%
9%
35%
36%
36%
37%
29%
38%
32%
41%
17%
17%
45%
56%
51%
60%
Average %
Value of the Vietnamese dong
The cost of living
Employment
Vietnam's economy
My personal standard of living
Foreign investment
worse same better
Average
Perception of 2016 in terms of key economic indices Key concerns for 2016 revolve around the value of the VND and the increase in the cost of living, while FDI, personal standard of living and Vietnam’s economic prosperity are big positives….
source: Infocus CCI Base: n = 512
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Will you spend More - The Same - Less in 2016 vs 2015?
45% 34%
38% 38% 40%
44% 44%
47% 48% 50%
55% 56%
47% 55%
55% 56%
49%
52% 38%
47% 44%
44%
41% 38%
Average %
Home appliancesHousehold utilities
Transportation
Personal quip. (phones/laptops, etc)communications (tele.email)
Entertainment & dining outFood & beverages products
Personal care products
House hold care productsHealth care products/services
Educationmore same less
source: Infocus CCI Base: n = 512
2016 should see continued growth in consumer spend. Education, Healthcare and Household products should see the positive upswings in spend.
Average
www.ifmresearch.com 5
41
54
60
81
84
86
4
11
42
37
58
31
0 10 20 30 40 50 60 70 80 90 100
Smart TV
iPad /Tablet
Desktop
Laptop
Home Wifi Internet
Smart Phone
Urban Digital Ownership 2013
2015
Explosion of Digital & Smartphones
source: Infocus Base: n = 2,800
In a short two years, all that is smart / communications driven has exploded. Consumers are craving connectivity / info / entertainment via personalized gadgets…
www.ifmresearch.com 6
Growth of high end / high cost items
111 000
157 000
215 000
290 000
0
50 000
100 000
150 000
200 000
250 000
300 000
2013 2014 2015 2016*
Automobile sales
Auto sales are indicative of Vietnamese joining the developed world & upscaling their lives
source: V.A.M.A
2 8 5
40
70
13
32
48 59
91
0102030405060708090
100
Vehicles Lifeinsurance
Credit |Debit card
Air-con ATM Card
Urban ownership growth (%)
2013 2015
source: Infocus Base: n = 2,800
Huge growth in creature features and security products, highlighting desire for global integration
*estimate
www.ifmresearch.com 7
Percentage of consumer who took out loans in 2015 & why?
36
25
20
5
5
5
0 10 20 30 40
Lower income
Total
Higher income
Yes Yes More than 1
An astonishing 30% of those surveyed took out bank loans in 2015 & 41% of lower income earners, mostly for real estate (35%) & business investments (25%).
5%
35%
24%
13%
9%
14%
Purpose of Loan
Automobile
Real Estate
Business
Education
Personal
Others
Take out Loan
source: Infocus CCI Base: n = 512
www.ifmresearch.com 8
FMCG Value & Volume growth % 2013-2015
10,1
4,3 3,2
4,7
1,6 2
0
2
4
6
8
10
12
2012-2013 2013-2014 2014-2015
Urban Value / Volume Growth %
Value % Volume %
10,5 11,8
8 7,4
9,4
6,4
0
2
4
6
8
10
12
14
2012-2013 2013-2014 2014-2015
Rural Value / Volume Growth %
Value % Volume %
Overall FMCG growth is down from last year, partially driven by a reduction of CPI (0.3% YoY end of November), but also largely due to limited increases in salaries, bonuses and a sense that consumers have different spending priorities.
source:
www.ifmresearch.com 9
19
11
2
4
15
12
4,2 3,1
02
46
810
1214
161820
2012 2013 2014 2015
FMCG Modern vs General Trade Value Growth (%) Modern General
Modern vs General Trade FMCG Value Growth (%) The past 3 years have seen a huge drop of both Modern & General FMCG value growth in urban Vietnam, indicating either saturation or consumers tightening spend for other trade offs. Modern Trade is showing a positive increase for the 1st time in years, though small.
source:
www.ifmresearch.com 10
Media spend by Medium: 2013 – 2015 (US Billion)
1 320
1 537
1 719
98
84
77 34
0 200 400 600 800 1 000 1 200 1 400 1 600 1 800
2013
2014
2015
TV Print (all) Digital Radio
Overall Media spend grew by 10% in 2015. TV makes up over 90% of all measured advertising spend, yet the mobile phone is becoming the # 1 source of time being spent in urban Vietnam, yet digital spend is still negligible…. Makes you wonder!!!
source:
www.ifmresearch.com 11
Daily activity do you do most, when not working?
29%
5% 9%
Using Smart PhoneUsing Laptop / PCWatching TVOthers
source: Infocus CCI Base: n = 512
2%
26%
25%
18%
29%
0% 10% 20% 30%
1 hour or less / day
1-2 hours / day
2-3 hours / day
3-4 hours / day
4 plus hours / day
Most popular daily activity (%)
Major shift in consumers activities to mobile and on-line. Over half of urban consumers note mobile usage as #1 activity, of which ¼ spend 4 plus hours a day on their mobile. Vietnam has caught up very quickly….
57%
Time spent on your favorite medium(%)
www.ifmresearch.com 12
The growth of smartphone opportunity in Vietnam
68 57 49
39
32 43 51 61
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 est.
Smart vs Feature phone share growth (%) Feature Phone Smartphones
Smartphone ownership is the single largest consumer growth opportunity in Vietnam, with an average growth rate of over 30% annually.
With urban Vietnam already over 80% penetration, the last conquest is rural Vietnam, changing the face of communication forever… Are you READY!
source:
www.ifmresearch.com 13
2016 Predictions
„The trouble with our times is that the future is not what it used to be.”
Paul Valery
www.ifmresearch.com 14
Vietnam is out of recession, but… 2015 KEY GROWTH TRENDS 2016 PREDICTIONS
Positives = Confidence, Growth & Spend
1 Business & Consumer confidence have increased substantially, driving growth
Increase investment and consumer spend should make 2016 best year ever, in terms of overall growth
2 Over 25% growth of Digital & Mobile connectivity
Much more opportunity for digital content, messaging and overall connectivity…
3 Gradual increase in FMCG spend in Modern Trade
Continued growth in modern trade with potential uplift for overall FMCG spend
4 Growth of Banking, Education, Healthcare spend, etc. Accelerations of all, so long at CPI stays in check
Negatives = debt culture aligning with China?
1 VN becoming debt reliant / credit culture, borrowing to catch up with the “Nguyens”
Any major global crisis / currency destabilization, could be devastating for Vietnam due to bad debt
2 New laws on investment, enterprise, real estate, etc., yet to see impact - Danger!
Fear of mass speculation and skyrocketing inflation as in 2008…
www.ifmresearch.com 15
Cam On
Ralf Matthaes | Managing Director [email protected] mobile: +84-903-949-531