Vietnam macro economy overview 2015 C o p y ri g h t © 2 0 1 5 T h e N ie ls e n C o m p a n y C o n fi d e n ti a l a n d p ro p ri e ta ry 1 C o p y ri g h t © 2 0 1 5 T h e N ie ls e n C o m p a n.
Copyright ©2015 The Nielsen Company Confidential and proprietary Copyright ©2015 The Nielsen Company Confidential and proprietary DISAPPOINTING GLOBAL PERFORMANCE MAINLY DUE TO SLOWDOWN IN EMERGING & DEVELOPING ECONOMIES World: 2.4% (-0.2% from 2014) Real GDP % Growth Euro Area USA 2014 2014 2015 Europe & Central Asia* 2015 2014 0.9% 1.5% 2.4% 2.5% 2015 2.3% 2.1% East Asia & the Pacific Copyright ©2012 The Nielsen Company Confidential and proprietary MENA LAC 2014 2015 2.5% 2.5% 2014 2015 6.8% 6.4% 2014 2015 Country 2014 2015 1.5% -0.7% China 7.3 6.9 Indonesia 5.0 4.7 Malaysia 6.0 4.7 Philippines 6.1 5.8 #: Increase vs 2014 #: Decrease vs 2014 #: No change vs 2014 Note: Europe & Central Asia only includes Developing Countries in the region, Euro Area refers to countries with high income Source: World Bank Group (2016) YET VIETNAM ECONOMY DEFIES REGION SLOWDOWN 2015 GDP 6.2 5.3 5.4 6.0 2015 CPI 6.7 18.7 9.1 6.6 4.1 0.6 Copyright ©2012 The Nielsen Company Confidential and proprietary 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 The strongest performance in the past years FDI Disbursements increase +17.4% vs YA Processing & Manufacturing sector is the main growth contributor, +10.6% vs YA Final consumption growth surged to +9.1% vs YA, compared to growth of +6.2% in 2014 Source: Government Statistics Office (2015) BY MAINTAINING EXPORT GROWTH WHILE OUR PEERS’ ARE IMPACTED BY CHINESE SLOWDOWN driven by EXPORTS % GROWTH FOREIGN-INVESTED COMPANIES VIETNAM GROWING ATTRACTIVENESS -10.6% Taiwan -1.8% Hong Kong -5.6% Philippines Copyright ©2012 The Nielsen Company Confidential and proprietary +1.2% Malaysia AS AN INVESTMENT DESTINATION • Geographic Advantage • Low Labour Cost • Low Operating Cost -7.2% Singapore -14.6% Indonesia +8.1% VIETNAM • Participation in Trade Agreements INCREASING EXPORT COMPETITIVENESS Thanks to devaluation of Vietnamese Dong by the SBV times in 2015 #: Exports % Growth 2015 vs 2014 Source: Channel NewsAsia (2015), HOWEVER, EXPORTS ARE BALANCED BY IMPORTS -3.2 BIL USD % Growth – 2015 vs 2014 EXPORTS +8.1%, within which: -47% -1% after consecutive years of trade surplus Copyright ©2012 The Nielsen Company Confidential and proprietary IMPORTS +12%, within which: Driven by LOCAL BUSINESS SECTOR, while foreign-invested companies posted trade surplus Source: General Statistics Office (2016) +59% +25% CONSUMER CONFIDENCE INCREASES +3 PTS IN Q4’15 Vietnam is the 6th most optimistic country globally Vietnam Consumer Confidence Index 112 Copyright ©2012 The Nielsen Company Confidential and proprietary 106 104 105 108 Rank Index change vs Q3’15 India Philippines -1 Indonesia +3 Thailand +1 Denmark +3 Vietnam +1 UAE +1 China -3 Saudi Arabia 10 +2 Pakistan Country Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Increase Source: Nielsen Global Survey, Consumer Confidence Section – Q4’15 Decrease HEALTH - THE BIGGEST CONCERN FOR CONSUMERS IN 2015 Vietnamese consumers are the most health-conscious in Southeast Asia, calling for manufacturers to start rethinking market offerings 34% 48% 29% 27% VIETNAMESE PEOPLE CONSIDER “STAYING FIT AND HEALTHY” AS TOP ASPIRATION FOR THE FUTURE 35% Copyright ©2012 The Nielsen Company Confidential and proprietary % People considering “Health” as Biggest & 2nd Biggest concern – Q4’15 HEALTH Q1/2015 Q2/2015 Q3/2015 Q4/2015 SEA Average Vietnam Philippines Singapore Thailand Indonesia Malaysia 19 34 21 18 15 13 %: % people considering “Health” as biggest & second biggest concern Source: Nielsen Consumer Confidence Survey (Q1-Q4’15), Nielsen Global Survey - Generational Lifestyles Insight Slides (Q1,2015) Copyright ©2015 The Nielsen Company Confidential and proprietary VIETNAM’S VOLUME GROWTH 2015 VS 2014 IS ONLY BEHIND THAILAND AND THE PHILIPPINES Yet we lead FMCG growth of the region in the latter half of the year REGIONAL SUMMARY – FMCG % Growth 2015 vs 2014 Unit value change Volume change FMCG % Volume Growth Rate Nominal growth Q4 2015 10.5% 2.2% VIETNAM 4.9% INDONESIA 3.8% THAILAND 3.8% PHILIPPINES 3.2% MALAYSIA 1.9% TAIWAN 0.5% HONG KONG -0.4% SINGAPORE -1.0% CHINA -4.9% + + + 6.5% Copyright ©2015 The Nielsen Company Confidential and proprietary 3.6% 3.7% 1.0% 1.3% 0.9% 2.0% 2.7% -0.1% 0.1% -0.4% -0.1% 4.4% 3.0% -1.3% Source: Asia Pacific Q4 2015 Growth Reporter 3.9% + : Increase +/- vs Q3 2015 + - : Decrease 10 OTHER CATEGORIES ALSO RECOVER, EXCEPT FOR PERSONAL CARE STILL EXPERIENCING STAGNATION Super Category Contribution and Growth - Total Cities 6% 9% HOME CARE 13% PERSONAL CARE 4% CIGARETTE 7.1% 3.9% 4.5% Copyright ©2015 The Nielsen Company Confidential and proprietary -0.6% -0.3% 3.4% 6.3% -0.8% 5.6% BABY CARE 6.9% 2.1% 4.0% 4.1% -0.1% 0.6% -2.8% -0.4% -4.0% 2.8% -5.2% -4.8% Unit Value Change Volume Change Source: Nielsen Retail Index – Versus year ago; % is value contribution to Total FMCG MAT TY -5.9% -10.8 -11.2 % % Nominal Value Growth 17 GROWTH IS EVEN MORE NOTICEABLE IN RURAL Rural showed high volatility in growth: consumption declined faster when economy weakened, and re-cover in a more positive macro situation FMCG DYNAMICS Urban (46%) Vietnam Rural (54%) 5.5% 4.5% 3.4% 2.0% 4.3% 5.5% 2.7% -0.0% -1.8% -1.7% Copyright ©2015 The Nielsen Company Confidential and proprietary -3.9% -5.5% 2014 2015 UR-2014 Unit value change UR- 2015 Volume change RR-2014 RR-2015 Nominal growth Note: This slide only includes Feminine Protection, Hair Conditioner, Shampoo, Toothpaste, Toothbrush, Personal Wash, Dishwashing Liquids, Fabric Softener, Laundry Products, Bouillon-MSG, RTDM, Soft Drink, Packaged Water, Energy Drink, RTDT, Cigarette, Sport Drink and Sweet Condensed Milk 18 Copyright ©2015 The Nielsen Company Confidential and proprietary FMCG IS EXPECTED TO HAVE POSITIVE GROWTH IN 2016 YET SLOW DOWN IN 2017 • • • EXPECTED AVERAGE FORECAST as the most likely scenario , 95% chance will be within 2-3% of this scenario EXPECTED MAX FORECAST most likely happens in optimistic market, with the signal of: • Big increase in FDI • Strengthening Forex • Big increase in consumer confidence EXPECTED MIN FORECAST most likely happens in pessimistic market, with the signal of: • Recession – periods of declining GDP growth • Tax hikes – introduction of GST, gas prices tax increase ã Political turmoil 19 Copyright â2015 The Nielsen Company Confidential and proprietary 20 Copyright ©2015 The Nielsen Company Confidential and proprietary 21 2015 - YEAR OF M&A IN VIETNAM Mondelez finished the acquisition of an 80 percent stake in Kinh Do’s snack business AEON acquired 30% of Fivimart and 49% of Citimart Copyright ©2012 The Nielsen Company Confidential and proprietary AUG 14 SEP 14 OCT 14 BJC and Metro announced about the acquisition in Vietnam NOV 14 DEC 14 Vingroup became the new owner of Maximark Vingroup bought 100% of Vinatexmart Vingroup bought Ocean Retail Group JAN 15 FEB 15 MAR 15 APR 15 MAY 15 TCC Holding stepped in the acquisition JUN 15 JUL 15 AUG 15 SEP 15 OCT 15 NOV 15 DEC 15 Singha bought stakes valued at $1.1 billion in certain subsidiaries of Masan Group Central Group acquired 49% of Nguyen Kim 22 Copyright ©2015 The Nielsen Company Confidential and proprietary 23 OFFLINE VS ONLINE SHOPPERS IN VIETNAM Copyright ©2012 The Nielsen Company Confidential and proprietary I don’t have to bear shipping fees or stringent return policies I don’t want to wait for products to arrive I can easily interact with, evaluate and select products Source: The Role of Digital in Shopping, Nielsen 2014 I secure a better price and access to deals and coupons I can compare between different sites before making decision I can avoid crowded stores / checkout lines It’s available 24 x 24 UNLOCK MORE OPPORTUNITIES IN WINNING OUR SHOPPERS DO YOU KNOW THAT IN HCM & HN? of internet users are also online shoppers Copyright ©2015 The Nielsen Company Confidential and proprietary 92% BUT frequency limits to TWICE/MONTH Explore the channel mission and interaction between online and offline store choices 93% shoppers are Middle class & Millennials Understand online shoppers and determine strategies to win them Source: Nielsen Vietnam study in May 2015 in HCM & HN, n = 500 internet users in last months >50% of popular online retailers’ consumers are struggling to differentiate their store identity Measuring your online store’s brand health and identify improvements 25 Copyright ©2015 The Nielsen Company Confidential and proprietary 26 CVS IS BOOMING ACROSS VIETNAM WHO Copyright ©2012 The Nielsen Company Confidential and proprietary NEW LIFESTYLE EMERGES Source: Banners’ official website; Nielsen Thought Leadership Report – Need for Speed CVS; Viet Nam Household Living Standards Survey 2012 – VN GSO No of mentioned CVS stores: VinMart+, Shop & Go, Circle K, B’s Mart, Family Mart, Aeon Citimart B&B, Ministop 27 CONSUMER PURCHASE MOMENTUM GROWING TOWARDS CVS A time saver for working females A hangout venue for young shoppers A convenient location for working males Copyright ©2012 The Nielsen Company Confidential and proprietary 2014 vs 2012 TRADITIONAL GROCERY MORE THAN JUST A CONVENIENCE STORE CONVENIENCE STORE Where consumers shop (%) Where consumers shop (%) 81% 64% 5% 11% Frequency (Average Per Month) Frequency (Average Per Month) 10.8 8.6 2.1 3.6 Source: Observations/websites Nielsen Thought Leadership Report – Need for Speed CVS 28 …AND CVS WILL HAVE TO RESPOND TO MORE VARIOUS DEMANDS OF THE FUTURE WHAT WILL CHANGE CONSUMERS BY 2020? Nearly everyone will be online by 2020 Gives rise to new ways of consuming in an increasingly busy world Snack as meal replacement Today 34% 45% Copyright ©2012 The Nielsen Company Confidential and proprietary of the world population Food and beverages will be expected to go beyond general health claims 2020 85% of the world population CONNECTIVITY Source: Whats in Store 2020 Report, Nielsen, Oct 2015 One of the most soughtafter functions is the ability to carry out simple tasks when away from home TECHNOLOGY Nutritious Unique Convenience Health Benefit EATING HABIT 29 HEALTHY GROWTH 6.7% AND Copyright ©2013 The Nielsen Company Confidential and proprietary GDP GROWTH 2015 VS YA REFLECTED IN FMCG FMCG GROWTH 2015 VS YA 0.6% VOL GROWTH ONLY BEHIND THAILAND & THE PHILLIPINES CPI 2015 VS YA LOW INFLATION EXPORT GROWTH CCI Q4’15 +8.1% 108 BALANCED BY HIGHER IMPORT RATE RANKING NO GLOBALLY +3.6% RECOVERY ACROSS MOST CATEGORIES, NOTICEABLY FOOD & MILK-BASED RURAL WITNESSES IMPRESSIVE GROWTH, HOWEVER SHOW HIGH VOLATILITY VIETNAM RETAIL LANDSCAPE 2015 M&A 2015 - YEAR OF M&A IN VIETNAM E-COMMERCE • High potential for Ecommerce in VN • Millennials are the most active digital buyers CVS • CVS is booming and playing various functions to consumers • Connectivity, Technology & Eating Habit in CVS will transform by 2020 30 ... Copyright ©2015 The Nielsen Company Confidential and proprietary Source: Nielsen Retailer Sentiment Report (2nd June – 3rd July) 15 Copyright ©2015 The Nielsen Company Confidential and proprietary... hangout venue for young shoppers A convenient location for working males Copyright ©2012 The Nielsen Company Confidential and proprietary 2014 vs 2012 TRADITIONAL GROCERY MORE THAN JUST A CONVENIENCE... likely scenario , 95% chance will be within 2-3% of this scenario EXPECTED MAX FORECAST most likely happens in optimistic market, with the signal of: • Big increase in FDI • Strengthening Forex