Kantar Worldpanel Dairy Talk Summary - Part 1 - Consumer Pulse

Kantar Worldpanel

KANTAR WORLDPANEL DAIRY TALK 8.5 .2013 | 8 : 3 0 AM 11 : 0 0 AM | S h e r a t o n S a i g o n

Kantar Worldpanel

CONSUMER PULSE 2013

BETWEEN CHALLENGES & OPPORTUNITIES

Urban 4 Key Cities and Rural Vietnam

3

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VIETNAM DID YOU KNOW?

DYNAMIC ECOMOMY A member of the new

BRICS: CIVETS and

VISTA

GDP ranking: No. 57

SURFACE AREA

331 thousands km2

Global ranking: No. 66

YOUNG AGE

Over 50% population

is under their 30s

HUGE POPULATION

88 Millions Global ranking: No. 14

ON-GOING

URBANIZATION

% urban pop: 32%

Urbanization rate: 3%

YOUNG

POTENTIAL

DYNAMIC

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CHALLENGES: ECONOMIC SLOWDOWN 2012

LOWER FDI

11 11

10

2010 2011 2012

Implemented FDI (Billion USD)

Source: GSO

WEAKER DEMAND

79 68

56

2010 2011 2012

Source: TNS CCIP Urban Only

Consumer Confidence %

LOWEST GDP GROWTH

IN 2 DECADES

Source: GSO

7 6

5

2010 2011 2012

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BRIGHT SPOTS TO PAVE THE WAY FOR A REBOUND IN 2013

CURBED INFLATION STRONGER EXTERNAL

POSITION

2008 2009 2010 2011 2012

TRADE BALANCE OF

+284 MLN USD

TREMENDOUS

OPPORTUNITY

9.2%

18.6%

CPI Growth %

Source: GSO Source: GSO

New entrants 2012: 1st time in 20 years:

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A TWO TIERS SOCIETY IS EMERGING, CREATING DISPARITIES

Fabrice Carrasco

Modern vs.

Traditional

VIBRANT & HI-TECH

TRADITIONAL

Rich vs. Poor

EMERGING NEEDS

BASIC NEEDS

Urban vs. Rural

MORE COMPLEX

PRIMARY & REMOTE

North vs. South

CAUTIOUS & FACE

DRIVEN

MODERN, NEW NEWS

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Personal demands need to be taken care more, to satisfy different needs by different

consumer clusters

FROM MASS TO SEGMENTATION

6.9 mln 7.0 mln 7.1 mln ~ population of

Switzerland 2015 2010 2020

Over 1 million newborns every year

CLUSTER 1: BABIES

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~ 70% Vietnamese women agree

Personal demands need to be taken care more, to satisfy different needs by different

consumer clusters

FROM MASS TO SEGMENTATION

CLUSTER 3: TEENS

Having fun is one of our

highest priorities. (TNS TRU report)

CLUSTER 4

YOUNG ADULTS

The main base of

Vietnam population in the

next 10 years.

CLUSTER 5

MIDDLE AGE & SENIORS

83% of middle aged

housewives agree:

I buy brands that are of good quality, even more

expensive. vs. 78% of young housewives

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CHANGING RETAIL LANDSCAPE

MODERN TRADE KEEPS EXPANDING

RURAL EMERGENCE REGIONAL ROADMAP URBAN GROWTH

Source: Kantar Worldpanel Households Panel Urban Vietnam 4 key cities & Rural Total FMCG excluding Gift Value %

PHILIPPINES 28%

CHINA UB 41%

THAILAND 53%

KOREA UB 80%

VIETNAM UB 18%

13.0

17.5 18.1

2006 2011 2012

MT value contribution %

17.7 24.2

84.7

MT Penetration %

1.8% MT Value Share in Rural

Urban

Rural

MT value contribution %

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-20

-10

0

10

20

30

40

50

Avg. Price per pack Value Volume (packs)

FMCG IN URBAN MONTHLY YEAR-ON-YEAR CHANGE (%)

After a half-year recovery, there is a signal of growth slow-down in both value and

volume in the latest 6 months, most significantly for Personal care. M

AT

P3

12

Ja

n1

1

Ju

n1

1

De

c1

1

Ju

n1

2

De

c1

2

Source: Kantar Worldpanel Households Panel Vietnam 4 key urban cities Total FMCG excluding Gift

Vol growth (pack) 6m vs. YA

URBAN 4 3%

HCM 3%

HANOI 4%

DANANG 7%

CANTHO 3%


DAIRY 4%

BEVERAGE 10%

PACK. FOOD 1%

PERSONAL CARE -4%

HOME CARE 2%

Make-up

Facial Moisturizer

MA

T P

31

3

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The situation is worse in rural as the growth is consistently going down, and reached

the lowest point lately, happening most significantly for Personal care products.

-60

-40

-20

0

20

40

60

80

100

120

Avg. Price per pack Value Volume (packs)

Ja

n1

1

Ju

n1

1

De

c1

1

Ju

n1

2

De

c1

2

FMCG IN RURAL MONTHLY YEAR-ON-YEAR CHANGE (%)

Source: Kantar Worldpanel Households Panel Rural Vietnam Total FMCG excluding Gift


RURAL 3%

NORTH 4%

CENTRAL 8%

SOUTH -2%


DAIRY 10%

BEVERAGE 10%

PACK. FOOD 2%

PERSONAL CARE -9%

HOME CARE 9%

Mouth rinse

Hair Conditioner

Facial moisturizer

MA

T P

31

2

MA

T P

31

3

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6%

9%

0%

5%

6% 6%

3%

6%

8%

3%

4%

1%

2% 3%

5%

4% 3%

6%

-2%

0%

2%

4%

6%

8%

10%

URBAN 4 HCMC HANOI DANANG CANTHO RURAL NORTH CENTRAL SOUTH

Half year ending Q3/2012

Half year ending Q1/2013

Pragmatic behaviour is observed in short-term.

CONSUMER REACT

BULKY PURCHASE? 1 YES, but much less stock up vs. before

Number of FMCG packs bought per trip - % change vs. YA

Source: Kantar Worldpanel Households Panel Total FMCG excluding Gift


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UPSIZE OR DOWNSIZE?


CONSUMER REACT

2

Source: Kantar Worldpanel Households Panel Total FMCG excluding Gift Updated to Q1/2013

Upsizing trend in volume switching % - Rolling MAT YOY trend

(10)

(5)

-

5

10

15

20

25

30

35

40

45

P312

P412

P512

P612

P712

P812

P912

P101

2

P111

2

P121

2

P131

2

P113

P213

P313

Volu

me s

witchin

g p

erc

enta

ge c

hange %

Shower gel 600-999ML - Hanoi

Facial Foam >50G/ML - Hanoi

Dishwashing 4-4.9L - Hanoi

Functional Adult Milk Powder >500G - Hanoi

Granules >500G - North & Central Rural

Fabcon Non-sachet - Rural

Still upsizing trend in long-term,

yet slowing down signal is

observed in Hanoi and North

Rural


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VALUE-FOR-MONEY OPTIONS?


CONSUMER REACT

3


PRIVATE

LABEL

IS GAINING

GROUND

34% 35% 40% 2010 2011 2012

Penetration %

NUMEROUS PROMOTION CAMPAIGNS & LOW PRICE OFFERS

56% 57% 64% Repurchase rate %


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CHANNEL SHIFTING?


CONSUMER REACT

4


-500000

0

500000

1000000

1500000

2000000

2500000

P312

P412

P512

P612

P712

P812

P912

P101

2

P111

2

P121

2

P131

2

P113

P213

P313

Provision Store

Mom&Pop store

Switching trend from Street shop to H+S - Rolling MAT YOY trend

Sw

itchin

g o

ccasio

ns

Slowing down shifting trend

from street shop to Hyper

Supermarket.

Kantar Worldpanel

VIETNAMESE CONSUMER TRENDS

TOWARDS FMCG

SPEED &

CONVENIENCE

HEALTH &

WELLNESS

FROM BASIC

TO ADDED VALUE INNOVATION

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Rice soup enters

more Urban

families, especially

households with

Kid


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LIQUID MILK

KNOWLEDGABLE CONSUMERS | HEALTH CARE

Urban 4 cities

Rural

Non-fried products

reach

22% Urban households

in 8 months

Penetration %

INSTANT NOODLES

Volume per buyer

57 Liter (vs. 50L in 2010)

27 Liter (vs. 19L in 2010)

41% (vs. 34% in 2010)

40% (vs. 25% in 2010)

Urban 4 cities

Rural

SOYA MILK

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SOPHISTICATED NEEDS | READY TO PAY FOR ADDED VALUE

Source: Kantar Worldpanel Household Panel Urban 4 key cities & Rural Vietnam excluding gift

Beauty Cup yogurt reaches

12% Urban families

in 10 months

~ 270,000

households

Cup yogurt Liquid detergent

10 Liter per Urban family

(FY12)

doubled FY10

figure

Price index: 112 Price index: 135

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MARKET DYNAMICS

Nowadays, consumers are exposed to many choices, esp. in personal products.

More new packsizes are offered to satisfy consumers different needs

In FMCG only, over 3,500 launches of new products / SKUs

in 2012 (13% active SKUs) SHAMPOO

172 new packsizes

Source: Kantar Worldpanel Vietnam Urban 4 key cities - Total FMCG 2012

# new SKUs

LIQUID BATH

101 new packsizes

PACK SIZE 1,530 #1

VARIANT 1,017 #2

LIQUID BATH

80 new variants

SHAMPOO

69 new variants

BRAND 937 #3

GROUND

COFEE

50 new brands

BISCUITS

60 new brands

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VIETNAM CONSUMER PULSE

KEY TAKE-AWAY

CHALLENGES OPPORTUNITIES

MODERN

RETAIL

LANDSCAPE

RURAL

CONVENIENCE

HEALTH

ADDED VALUE

INNOVATION

Documents

Kantar Worldpanel Dairy Talk Summary - Part 1 - Consumer Pulse