10. The Asia Pacific continues to be a dynamic region of
change. In recent months, there was a flood of events that
could fundamentally change the playing field in the region.
The Korean Peninsula is on the precipice of change with
April’s historic summit between the leaders of North Korea
and South Korea greatly increasing prospects of a formal
peace treaty. In May, a new political party was voted into
power in Malaysia for the first time in 60 years, heralding
major political and economic reforms. Meanwhile, China’s
Belt and Road initiative continues to be a major topic for
countries and companies alike and is set to provide many
opportunities and challenges for the region.
Behind the headlines lies the relatively normal backdrop of
continued economic expansion and growing opportunities
in many of the region’s markets. With increasing
populations, rising disposable incomes and rapidly
connecting lifestyles, the Asia Pacific is quickly expanding
its influence on the global economy.
Across the region, Vietnam, India, China and the
Philippines boasted the highest economic growth for the
quarter, supported by strong and growing consumer
confidence in these markets. While there is always a
myriad of reasons behind a country’s economic growth,
there are some commonalities between these markets
that contribute to their healthy outlook. For example,
accelerating urbanisation and increasingly youthful
populations are creating bigger workforces with more
disposable income, which in turn is boosting domestic
demand in these countries.
Laura McCullough
Marketing
Effectiveness &
Sales Effectiveness
Practice Leader:
Developing
Countries
12. POPULATION
Source: Nielsen What’s Next in Vietnam – Forecasting Tool
94
95
95.7
96.4
97
97.7
98.3
2016 2017 2018 2019 2020 2021 2022
Population
47 49 52 54 55 56
131 131 132 132 132 133
2016 2017 2018 2019 2020 2021
Internet users Mobile subscribers
Million people
INTERNET USERS
Per 100 people
13. 3.2%
1.6%
11.3%
Total FMCG TT Urban MT Urban
Source: Nielsen Retail Index – Total Urban (TT + MT) – Versus year ago
Fast moving consumer goods dynamics – total urban (traditional trade + modern trade)
1.1% 1.0% 1.1% 1.1% 0.8%
1.2% 1.0% 1.0% 1.1%
2.0%
4.9%
1.2%
5.4%
4.4%
5.0%
1.1% 0.8% 1.6%
3.2%
5.8%
2.3%
6.5%
5.2%
6.2%
2.1%
1.8%
2.7%
MAT YA MAT TY YTD YA YTD TY Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18
Unit Value Growth Volume Change (Weighted Value) Nominal Value Growth
82%
18%
VALUE CONTRIBUTION AND growth – MAT Q2-2018
15. Vietnam’s FMCG performance in first quarters is usually
strong due to the Tet holiday period and Tet sales in Q1
last year were at record levels. But this year growth was
slower than expected, possibly due to changing
consumer behaviour toward the holiday. There are
indications that consumers are looking to enjoy a
simpler Tet experience. Manufacturers can either take
that change as an inevitable impact on their business or
seek opportunities for new and innovative ”whitespace”
from which they can tailor their product offerings to
make sure that they stay relevant to consumers.
Across retail channels, although Traditional Trade
including “wet markets” still dominates in Vietnam,
Modern Trade has gained impressive momentum. Since
2012, the number of convenience stores has nearly
quadrupled and Minimarts comprised the most store
openings in both 2016 and 2017. Health and beauty and
modern drug stores have also expanded quickly,
doubling in the past two years. Modern retailers will
look to continue to expand and invest in improving their
stores to attract more shoppers. The future outlook of
small-format modern stores is very optimistic as the
growth of the Modern Trade channel is set to further
accelerate. However, it will no longer be a one-size-fits-
all Modern Trade strategy. The channel playbook has to
be looked into at a much deeper level to reflect the
diversity in shopper missions and to build efficient in-
store strategies.
NGUYEN HUONG
QUYNH
Managing Director,
Nielsen Vietnam
Nielsen Vietnam
19. Overall, we continue to see a stably high confidence
level among Vietnamese consumers throughout the
past 3 years. The good momentum of economy growth
across industries combining with the positive signals of
foreign investment flows, increasing household income
and growth-oriented government policies could
translate into optimism of our consumers. Besides, the
consistent trend could be influenced by the build-up
and positive sentiment towards the personal finance
status as well as immediate spending intentions.
Emerging markets like those in Southeast Asia region
have been noticed as an important region for long-term
growth of consumer-facing businesses for quite some
time now. This statement is likely due to many
advantages that this group could bring such as young
and fast-growing population coupled with rapid and
consistent economic growth experienced in many
markets. And high levels of consumer confidence could
be one of these advantages too.
DANG THUY HA
Director,
Consumer Insights,
Nielsen Vietnam
20. Source: Study What’s Next In Emerging Markets Study, 2018
0-14
years
15-19
years
(Gen-Z)
20-34
years
(Gen-Y)
35-49
years (Gen-
X)
50-64
years (Baby
Boomers)
65+ years
(Silver Gen)
SHARE OF
POPULATION
7%23% 27% 21% 14% 8%
22% 21% 18% 11%21% 7%
20152025
+0.8M +0.2M -3.5M +3.4M +3.7M +3.6M
Vietnam has notably youthful compositions. With effective analysis, companies
can gain important clues to tap into market opportunities early as the youthful
cohort move from being dependents to significant contributors to the
workforce, capable of powering a strong business environment and economy.
However, consumers are living longer, and in Vietnam the proposition of
people aged 50 and older is increasing. Projection shows that by 2025, nearly
29% of Vietnam’s population will be more than 50 years old. With this rising
proportion of aged population, white-space opportunities abound for
manufacturers, media, retailers and service providers that can address the
special needs of this segment. It is good to start some discussions now around
strategic growth plans and investment to ensure aged people are active,
engaged and contributing members in the community and workforce.
21. AGING
POPULA-
TION
• Negative economic
growth, less investment
• Smaller working
population
• Shrinking industries
reliant on labour e.g.
nursing, construction
• Labour reform including
family friendly policies &
retirement age
• Technology and robotics
replacing labour shortages
• Health food and supplements
for aging people
• Delivery services and in-home
care for aged segment
• Aged-friendly packaging –
larger letters – icons and
labelling systems
• Aged-friendly retail layouts
YOUNG
POPULA-
TION
• Higher economic growth,
more investment
• Number of workforce
outweighs number of
dependents
• Focus on education
• More spending power
• Infant & children focused
retail outlets and product
ranges
• Youth programming and
media
• Marketing toward young
families
SOCIETAL IMPLICATION
POTENTIAL INDUSTRY
RESPONSES
22. Source: Study What’s Next In Emerging Markets Study, 2018
34% 40%
66% 60%
2015 2025
Urban Rural
% urban population by city size in
people
49%
40%
3%
10%
6%
19%
26%
23% 23%
2015 2025
<300K 300k-500k 500k-1M
1M-5M 5M-10M 10M+
% population by urbanity
Over the last ten years, Vietnam’s mid and mixed-density cities have grown, a
pattern that is expected to continue through 2025. During this time, Vietnam
will also experience a growth in its rural cities, as more people move to large
towns and small cities.
% change in population
0%
15%
109%
-45%
225%
6%0%
14%
40%
-46%
109%
5%0% 12%
27%
-100%
88%
0%
> 10 Million 10 - 5 Million 1 - 5 Million 500K - 1 Million 300K - 500K <300K
2015 2020 2025
24. The impacts of urbanization will not be consistent in different areas of the
same country. Size, infrastructure, congestion, retail development and many
other factors come into play. In Vietnam, nearly twenty five percent of the
urban population are in cities of 1 million people plus. While these high-
density cities face infrastructure challenges, rising congestion and an array of
social issues, they’re also are home to large populations of comparatively
affluent and time-poor consumers and represent a concentrated
opportunity for convenience, on-the-go and health and wellness.
On the other hands, when secondary cities and smaller urban regions
become more developed, they could remain a strategic investment for
companies looking to capture more growth. The consumers in these mid and
mixed-density areas are already experiencing the benefits of urbanization,
including
increased exposure to mobile technologies and diversified media. This is
rapidly pushing them to adopt more urban-like shopping behaviors. Many
believe that this economic development will transform the consumer
prospects in these places but represent different consumer needs, and
companies should consider these differences in their offerings.
URBAN SEGMENTATION = DIFFERENT NEEDS
HIGH
DENSITY
+
• Changing consumption
patterns
• Increasing access to
infrastructure
-
• Congestion, centralized
consumption
- Potential health, safety
and pollution issues
• Smaller pack sizes
• More demand for
convenience, delivery, on-
the-go solutions
• E-commerce and delivery
options used to bridge
gaps in consumer needs
from existing retail
environment
LOW
DENSITY
+
• Growing consumption
demand
-
• More limited infrastructure
• Large “stock up” pack sizes
• Maturing category
evolution
• Focus on “golden stores”
• Technology leapfrogging
traditional retail evolution.
SOCIETAL IMPLICATIONS
POTENTIAL INDUSTRY
RESPONSES
25. VIETNAM OUTBOUND TOURISM SOARS…
TOTAL VALUE
2012
3.5 USD Bn.
OUTBOUND TRIPS GROWTH
IN ASIA PACIFIC 2016 TO 2021
2016
8.0 USD Bn.
Myanmar
China
India
Indonesia
Vietnam
AND PEAK UP EVEN HIGHER IN TET
Tourists in Tet 2018 is up +20% - 30% during Lunar New Year (vs.
YA) with OUTBOUND travel contributes 50-70%.
Viettourist
80%
Fiditour
60% 50%
Viettravel
Outbound Domestic
DOMESTIC AND OUTBOUND TRAVEL TET 2018
Source: Future of Outbound Travel in Asia Pacific (2016 to 2021) report by MasterCard,
vietnamtourism.gov.vn, cafebiz.vn, https://dulich.vnexpress.net
26. Top spending after necessities Q2’18 vs Q1’18
% Respondents say they will spend on this item after necessities
SAVINGS HOLIDAYS
HOME
IMPROVEMENT
TECHNOLOGY
PRODUCTS
70%
(-3)
49%
(+3)
38%
(-4)
46%
(+0)
OOH
ENTERTAINMENT
NEW CLOTHES
46%
(-5)
43%
(+0)
41%
(+3)
PAY MEDICAL
INSURANCE
PREMIUMS
30. Hyper-connectivity and busy lifestyles are influencing
buying decisions of global consumers in general and
Vietnamese consumers in particular. Today’s consumers
want convenience at every stage of shopping and brand
engagement with products and services.
However, convenience means different things to
different consumers and it is increasingly important to
understand the local trends centered around the need
for convenience. There are six key factors driving
consumers towards convenience and by understanding
them, companies can adapt and enhance their solutions
as consumer needs rapidly evolve. They are
circumstances, culture, location, market maturity and
technology. These key influences are driving the need
for fast moving consumer goods (FMCG) towards
convenience solutions tailored to cater to different
segments of society and geographical areas.
Since consumers don’t articulate convenience directly,
FMCG companies can get insights from consumer
activities during their start-to-finish experience with
products and solutions.
DOAN DUY KHOA
Director,
Consumer Insights,
Nielsen Vietnam
44. NGUYEN ANH
DZUNG
Executive Director,
Head of Retail
Measurement
Services
Nielsen Vietnam
Accounting for 68 percent of country’s 90 million
people, rural consumers are evolving in leaps and
bounds. As the nation’s growth continues and FMCG
outlook progresses, there is increasing interest from
both local and multinational businesses around
Vietnam’s rural consumers.
With its huge population and increasing affluence,
rural Vietnam is in fact lucrative market as these
consumers are enjoying income growth and have a
tendency to uplift their lifestyles. Yet, this high-
potential group largely remains untapped due to many
perceived challenges. Those challenges remained rural
myths, such as rural consumers are less connected,
they are likely to keen on low-priced products and
pushing products to these far lungs is expensive and
costly.
Aiming to debunk these myths about rural Vietnam,
we have found out that reaching rural land and
engaging rural consumers is not difficult like finding a
needle in a haystack. And as the rural Vietnamese
community continues to evolve, transform and takes
centre stage as a key group for businesses,
understanding who they really are, where, how and
what they are buying and their most effective touch
points will be prerequisites for future success.
47. SUPERMARKET/ HYPERMARKET NUMBER OF STORES
DEC’16 DEC’17
Co.op Mart 83 89
VinMart 57 75
Big C 34 35
Fivimart 25 26
Lan Chi
Mart
12 22
Aeon
Citimart
20 20
Mega Market 19 19
Hapromart 16 12
Auchan 8 16
DEC’16 DEC’17
Muong Thanh
Mart
14 14
Lotte Mart 13 13
Intimex 12 12
Thanh Do
Mart
10
AEON 4 4
SatraMart 3 3
Co.opmart
Extra Plus
2 2
Giant 1 1
Emart 1 1
COOPMART IS STILL THE BIGGEST, VINMART GO FAST,
AUCHAN, LAN CHI INCREASE DOUBLE IN TERM OF NUMBER
OF STORE
48. 91 88
120 131
156
201
76
143
157
251
292
59 55 55
52
12
68
13
16
Dec-15
Feb-16
Apr-16
Jun-16
Aug-16
Oct-16
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Oct-17
Dec-17
Co.op Food
SatraFoods
Bach Hoa
Xanh
Vissan
Zakkamart
Coop Smile
T-Mart
CP Fresh
mart
CONVENIENCE STORES:
GROW AGGRESSIVELY FROM DIFFERENT CHAINS
132 147
189
215
241 254 259
103
152
161 157
65 94 110 122
130 166128
121
119
31 39 50 59 66 71 78
100 1063 4 7 11
822
950 840
788
850954
0
200
400
600
800
1000
Dec-15
Feb-16
Apr-16
Jun-16
Aug-16
Oct-16
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Oct-17
Dec-17
Circle K
B's Mart
Family
Mart
Shop &
Go
Mini Stop
7-eleven
VinMart+
FOOD & MINIMART:
LEAD BY 3 LOCAL PLAYERS