Consumer Lending in Vietnam • Reported by Nielsen • October 2011 Title of Presentati Copyright © 2010 The Nielsen Company Confidential and proprietary Agenda Country facts A potential market with large & young population Growing economy but still a challenging 2011 Impact of devaluation Consumer Lending in Vietnam Need of loan services Durable ownership & intention to buy in future Suppliers of loans Growth Opportunities Who are our target population and how to approach them? Potential of Rural Area Next step of growth Title of Presentati Copyright © 2010 The Nielsen Company Confidential and proprietary Research Design Nielsen Vietnam Personal Finance Monitor (PFM) – HCMC & Hanoi, 2009 to 2011 Nielsen Vietnam Omnibus Nielsen Global Consumer Confidence Study Nielsen Vietnam Business Barometer – Global online study in 55 countries, 2009 to 2011 Nielsen Retail Audit Data – Cities – Data to March 2011 – HCM & Hanoi – From 2009 to 2011 – Senior Leaders of manufacturers in Vietnam, – From 2009 to 2011 Regional Differences Study –HCM and Hanoi (N=600, May09) –ABC HIB, 20 to 45 yo Macro Economic data – Vietnam Govt Statistics Office – Press articles Copyright © 2011 The Nielsen Company Confidential and proprietary Executive Insights Updated Country fact - Vietnam is a potential market for consumer lending, with large, growing and young population - Economy is growing, but 2011 is a challenge when inflation & price increase, have impacted consumer’ confidence and business leader’ optimism - But leaders are still believe a brighter future and invest to expand their business, especially for modern trade - Demand: Consumer lending HN people have higher need to own durable products than HCM (both current ownership & intention to buy in future) 17% of population currently own a loan and more skew toward non-bank Reasons to choose non-bank loans: quickly with less financial evidence documents required and low interest rate - Supply: Consumer lending market is very cruel with many suppliers, especially from bank Loan’s interest rate is still considered high to most customers The key pull factors for this service is low interest rate and simple procedures - Non-bank supplier performance: Prudential Insurance is performing the best PPF is not used much due to very low awareness Copyright © 2011 The Nielsen Company Confidential and proprietary [1 Country facts] - A potential market with large & young population Growing economy but still a challenging 2011 Glance of FMCG market Impact of devaluation Topic of Presentation Page Copyright © 2011 The Nielsen Company Confidential and proprietary Vietnam has large, young and growing population and more than 90% of urban population is from class A-D • • • • • • Updated Population: 87 millions (Rural/ Urban = 70/ 30) Growth in 1999-2009: averagely 1.1%/ year Male/ Female = 49/ 51 Class ABCD = 77% (Urban = 92%, Rural = 70%) (*) Class AB/ CD = 11%/ 66% (*) Age range – – – – – 1-14 years old: 24% 15-24 years old: 20% 25-34 years old: 17% 35-49 years old: 21% 50+ years old: 17% 62% • HCM is the biggest market with largest population, highest average income and highest GDP contribution • GDP in 2010: 104.6 bil USD • Annual Income: US $1,168 Source: General Statistics Source: GSO, Nielsen Database (*) Household income bank (HIB, in VND) A (15,000,000 or higher) B (7,500,000 - 14,999,999) C (4,500,000 - 7,499,999) D (3,000,000 - 4,499,999) E (1,500,000 - 2,999,999) F (Under 1,500,000) Copyright © 2011 The Nielsen Company Confidential and proprietary [1 Country facts] - A potential market with large & young population Growing economy but still a challenging 2011 Glance of FMCG market Impact of devaluation Topic of Presentation Page Copyright © 2011 The Nielsen Company Confidential and proprietary Economy is growing… But challenges arose in late 2010 and bloomed in 2011 12 % Wage Growth 10 % 3% 3% Unemployment 12 % Inflation 7% 17 % FDI Growth 16 % 7% GDP Growth 5% 29 % 21 % Retail Sales Growth 2011 Growth Estimation 22.6% 5.8% 10% 18.7% ), data to MAR11 16 Source: Nielsen Retail Audit Copyright © 2011 The Nielsen Company Confidential and proprietary Nielsen Tracked Categories