IFM COVID 19 vietnam behavior change track from a behavioral science lens sharedbyworldlinetechnology

COVID-19 IMPACTRACK – Consumer Behavioral Change Tracking Report- through the Lens of Behavioral Science Prepared for: Prepared by: Infocus Mekong Research SandRock Consultancy June 10, 2020 IFM CONSUMER CONFIDENCE INDEX – COVID-19 TRACKER – Behavioral Science Insights Introduction: Contents: Dates and sample: Infocus Mekong Research (IFM) has been running the Vietnam Consumer Confidence Index annually since 2012, across a nationally representative sample of Vietnam’s population This report covers key indices such as: Consumer confidence, future Economic Outlook, Purchase Growth of both Product and service sectors, Fears and reservation shifts, Shopping behavior, COVID-19 Impact on employment, consumer financing and the impact of COVId-19 on business / employment prospects The study consists of waves conducted between January 2019 to May 2020 and will be conducted again in June of 2020 The sample consists of a total over 9,000 Vietnamese consumers nationally, including Rural Vietnam With the impact of COVID-19 on consumer behavior over the past months, IFM has continued to track consumer confidence and behavioral changes, in an effort to help businesses better understand the evolution of consumerism and what might become the “new normal” of consumption behavior in Vietnam Data was collected via IFM Mobile panel Behavioral Science Lens This report includes commentary and analysis from a Behavioral Science lens by Jim Sailor – Director, Sandrock Consultancy and sheds light on the consumer psyche from a unique perspective in terms of Choice architecture and Risk perceptions CONTENT Contents Study Sample & Demographics Top-line Summary Opportunities & Behavioral Science Insights 11 Section – Consumer Confidence 17 Fears & Reservations 20 Section 2: Purchasing behavior 22 Purchase Growth / Decline 23 Big Ticket Item Product / Service Impact 17 Changing behaviors 29 Section 3: Financial Impact 31 COVID-19 business / employment prospects 36 Section 4: USAID Economic Impact results 38 About Infocus Mekong Research 40 Demographics Demoographics METHODOLOGY ▪ IFM consumer confidence Index, has been ongoing since 2012 For this report, the sample utilized ranges between 9,000 to 1,500 respondents nation-wide and will be conducted again in mid June 2020 ▪ Quantitative – Self-completion by end consumers ▪ Using IFM Mobile Panel via smartphones data collection Total sample: 9,056 SAMPLE PLAN Location HCMC Hanoi 2nd cities Danang Hai Phong Can Tho Binh Duong / Dong Nai Other (Rural / sub-urban) South Central North Total Sample 256 255 52 50 50 50 100 110 110 1,023 SEC A B C D E Household Income bands 30,000,000 VND and more 20,000,001 - 30,000,000 VND 15,000,001 - 20,000,000 VND 10,000,001 - 15,000,000 VND Below 10,000,000 VND Sample error is 3-4% based on sample size per wave at 95% confidence level Date Dec 2018 Dec 2019 Mar 2020 May 2020 June 2020 Total Total 23% 27% 23% 14% 13% Sample 3,567 2,964 502 1,023 1,000 9,056 Age 18-24 25-30 30-40 40-50 50 Plus % 18% 25% 36% 15% 7% Gender Male Female % 51% 49% INCOME & MARITAL STATUS Demographics are reflective of Vietnamese aged 18 plus, whom own a smartphone, which is over 90% in Urban Vietnam and around 80% in Rural Vietnam MONTHLY INCOME Household Income Personal Income A - 30,000,000 VND plus B - 20,000,001 - 30,000,000 VND MARITAL STATUS URBAN RURAL 26% 8% Urban 12% 2% 19% 6% C - 15,000,001 - 20,000,000 VND 24% 21% D - 10,000,001 - 15,000,000 VND 10% 22% 18% 3% 7% 52% Rural 29% 13% 29% 1%5% Single with kids Married without kids Married with kids WITH KIDS UNDER 16 YEARS OLD 7% 15% 43% 64% 57% 36% E - Below 10,000,000 VND 23% 36% Your monthly Household income? Your monthly Personal income? Your Marital status? Do you have any kids under 16 years old? 42% Single without kids 29% 11% 61% Yes No Urban Rural 70% Base: n=1,023 It is interesting that 19% actually lost income in May Obviously that would likely prime them to be pessimistic and bias them towards a more negative outlook Maybe more interesting is that this also means that 81% did not lose income, but still show overall results that appear to be perceiving risks (especially economic risks) to be at a high level EMPLOYMENT STATUS Prior to COVID -19, 82% of respondents were employed full time, while in May only 63% were employed full-time, with 9% unemployed and 28% working Part-time or on reduced hours and pay EMPLOYMENT STATUS Before COVID-19 82% Full-time employed 63% 13% Part-time employed Unemployed Full-time employed but have reduced hours / pay 19% After COVID-19 14% 5% 68% are from 24 – 40 years old Lost Income in May due to COVID-19 42% are under 24 years old 11% are over 50 years old 28% have monthly household income under 20 mil VND 9% 0% 14% Which of the following best describes your present employment status? 16% for under 40-year-old people while over 40-yearold is only 8% Base: n=1,023 Top-line Summary VIETNAM’S PROSPECTS In a recent Politico overview of Global Coronavirus Pandemic, Vietnam was seen as the most successful country in the world in managing and controlling the spread of the Virus A major coup for Vietnam, driven by early intervention such as closing down schools and borders and quarantining potential high risk cases and its amazing tracing efforts to root out infection With only 328 cases and no deaths, Vietnam is ready to open, if and when the rest of the world is safe to reconnect with Reasons for optimism As Vietnam has so far avoided major calamity, there are some key positives for the near future… Reasons for concern Inversely, not all is rosy and Vietnam, like the rest of the world - will struggle ▪ Global image boost provided by containment, breeding potential investor confidence ▪ Vietnam, as part of the global economy, will be negatively impacted much more than previously by global economic impact ▪ 2019 GDP growth of 6.8%, one of the highest globally, and even higher than China 6.1% ▪ On-going China Plus one potential of Vietnam ▪ A resilient population and stable administration ▪ Vietnam has no benchmarks in dealing with this type of crisis, so there will be many unknowns ▪ Unemployment, wage lose and a critical loss of consumer confidence This report outlines key consumer behavioral changes brought on by the pandemic, and analyzes which of these behaviors are temporary, permanent and how Marketers can start to respond to these changes KEY SUMMARY COVID-19 has become a major reality check for consumers Prior to the outbreak consumer confidence, though not as high as in 2019, was still strong at 84, which has now dipped to 22, lowest in the last 25 years Consumer economic outlook also plummeted from 70% with a positive outlook for 2020, to only 6% in May, a mere months later, partially spawned by 19% having either lost their livelihood or having had a reduction in income Some sectors actually grew during the pandemic, such as Online shopping, Ewallet payments, while other sectors were almost wiped out; Tourism, entertainment and bars / restaurant businesses Key economic indices impacted by COVID-19 - based in Pre COVID vs Post COVID sentiment Index Full time employed Positive Outlook for 2020 Biggest fear for 2020 Pre COVID Jan 2020 Post COVID May 2020 82% 63% 70% 6% Environmental Pollution COVID negative impact on Business 26% 25% Consumer Confidence Index 84 / 110 22/110 Percent of Consumer who noted spending more or less on sectors in 2020 versus 2019 and versus Post COVID-19 Pre COVID Post COVID Pre COVID Post COVID Sector Jan 2020 Sector May 2020 Sector Jan 2020 Sector May 2020 F&B 56% Household Utilities 28% Home Appliance 26% Entertainment /dining out -61% Education 55% F&B 9% Communications 26% Transportation -50% Healthcare 53% Health care -2% Household Utilities 33% Personal electronics -26% 10 COVID-19 Financial Impact 32 COVID-19 IMPACT ON LOANS If Interest rates stay low, Loans from all sources should see an increase in the coming months, to deal with the ravages of COVID-19 62% - 67% in Ho Chi Minh city and Hanoi Loan taken in P12M 52% 54% 59% 41% Coming June 2020 29% 2015 2017 In the next 1- Months will you take out a loan of any kind from a bank, lending institution or borrows from Friends / family? [SA] 2018 Jan-20 Base: All May-20 Jun-20 33 SOURCE OF LOANS Vietnamese banks will be the major beneficiary of Loans, as many consumers Friends and family have equally been negatively impacted by COVID-19 and hence, have less cash to spare Sources of loan 70% May’20 63% 56% 54% Jan’20 54% 47% 2018 29% 31% 22% 11% 12% 6% Vietnamese banks From where would you take out a loan ? Friends/ Family Consumer finance companies Base: All Foreign banks 34 PURPOSE OF LOANS Prior to COVID-19 most loans were for Personal and business purposes Now, the mass majority need cash injections just to survive, pay back loans and reinforce their business 2018 Jan-20 May-20 Jun-20 Purpose of loan 57% 49% 46% 39% 45% 36% 35% 29% 24% 25% 19% 16% 9% 12% 14% 15% 3% Business What would be the loan for? For Immediate Survival Personal To Pay Back Loans / Debts Real Estate Base: All Automobile Education 35 BEHAVIORAL SCIENCE INSIGHT These financial slides reinforce the general feeling of economic risk and is especially highlighted with 46% seeking loans for immediate survival! I believe this survey took place at what may have been close to the peak (or maybe a little after) of heightened risk perception If the view of risk goes down in June and July, there may be significant swings in the data on loans as well as on purchase intentions 36 CORONA VIRUS REVENUE IMPACT FOR 2020 GROWTH Three quarters of all surveyed see a negative to very negative impact from COVID-19 on the growth of 2020 business ▪ Consumers in the North (80%) and those with Household incomes over 30 mil VND (77%) are much more pessimistic 18% Extreme 10% POSITIVE 2% 3% 9% Mild 4% NEUTRAL 3% 6% 73% Mild 16% NEGATIVE 22% 7% Extreme 28% Base: n=1,023 How much you think the Corona Virus outbreak, is going to impact your Job - business in 2020? (SA with 1=Very Positive Impact / 5=Neutral /10= Major negative impact) 37 CORONA VIRUS REVENUE IMPACT FOR 2020 GROWTH In March, at the beginning of the crisis, 84 of Businesses owners noted being negatively impacted by COVID-19 and estimated a drop in their revenues of - 13.5%, which will be checked again in June, to gauge the business communities sentiment IMPACT OF CORONA VIRUS ON REVENUE -25% OVERALL IMPACT OF COVID 19 ON YOUR BUSINESS Very positive -25% Positive Neutral Negative Very negative -19% -13.48% -14% 1%8% -6% 4% 5% 1% 20% 16-20% 11-15% 6-10% Plus Base: N=167 Business owners in Mar 2020 1-5% No Impact 1-5% 6-10% 9% 40% 44% 3% 10% Plus How much you think the Corona Virus outbreak, is going to impact your Job - business in 2020? (SA with 1=Very Positive Impact / 5=Neutral /10= Major negative impact) 38 Excerpts form Vietnam Government statistics office Impact of COVOD-19 on Business 39 COVID-19 Negatively Impacts 86% Business, Lays off 21.6% Laborers in Vietnam The Coronavirus disease 2019 (COVID-19) has so far negatively impacted 85.7% of businesses in Vietnam and forced firms to streamline 21.6% of laborers, according to data of the government-run General Statistics Office (GSO) For businesses, 20% had to halt their operation The rate of impacted businesses reached over 90% for sectors of apparel, footwear, electronics, automobile production, and even higher at 93.9% for education; 95.7% for tourism; 95.5% for food & beverage; 97.1% for accommodation; and 100% for aviation Firms listed problems of smaller markets, lower input of materials, lack of capital, while the operating expenses remain unchanged The GSO estimated that if COVID-19 last until end of the second quarter (Q2), Q3, and Q4, 134,000, 160,000, and 205,000 businesses will halt operation, respectively About laborers, 66.8% of firms had to apply labor-related methods, including 28.4% streamlined staff, 21.3% let staff have break without pay, and 18.9% reduced income of laborers As a result, as of end-Q1, 21.6% of laborers lost their jobs, 7.5% took break without pay, 9% had their incomes reduced, and 22.8% had their working schedules disrupted 40 About us 26 years on the ground experience in Cambodia, Laos, Indonesia, Myanmar, Thailand and Vietnam Accurate Actionable Advanced IFM Mobile / Panel Specialized Custom Strategic Consulting Digital Ad RoI & Planning ▪ Fast & Robust ▪ Cost effective ▪ Pre targeted consumers ▪ Tier Q.C Mechanism ▪ Full Range of Customized research ▪ From AD & Product testing to Qualitative FGD’s, IDI”s, Ethnography ▪ Using technology to max impact ▪ Customer Experience & Design ▪ Market entry / feasibility ▪ Market Sizing / Risk assessment ▪ Competitor SWOT ▪ We focus on your business issues ▪ 250,000 Holistic Panel ▪ Planning software allows for TV / Digital Research Curve maximization ▪ Campaign Data norms ▪ Ideal for tracking Digital Campaigns 80,000 + Panelists 1.5 M Data Base 42 Senior management team 60 Plus years experience Ralf Matthaes CEO / Founder Ralf has over 26 years of MR experience in Vietnam, as MD of TNS, Kantar Worldpanel, Kantar Media and regionally for South Asia Ralf specializes in Market entry and feasibility, Brand development, Media, Retail and consumer brand connection Harsh Chimata Senior BD Manager Harsh has more than 12 years of experience in the panel industry and research with Toluna, Epinion and Decision Lab He is responsible for helping clients with research, mobile research, online data collection and consulting Matt Erickson Research Manager Matt has over 11 years Research experience both from agency and client side in Vietnam gained with TNS / Kantar, IFM and Diageo Vietnam Matt specializes in Tracking, ad hoc and consumer purchase engagement and purchase journey analysis Thu Le Research Manager Thu has more than years of research experience from INTAGE & Kantar TNS This helps her to specialize in customized/ ad-hoc studies with a wide range of methodologies in consumer research Her time at client-side also benefits for product and brand development Lan Anh Data Control Manager Lan Anh has over 13 Years research background gained with TNS, INTAGE and Epinion Lan Anh controls all Questionnaire and Data quality, Quotas , Survey programming and data base integrity Son Dang Head of Operations A Graduate of Masters IT program at Technical University , Son’s Team manages all technical panel management, scripting, logic, and mobile / on-line technical solutions and Operations functions 43 Multiple Consumer touch points IFM Panel mobile data collection: N = 80,000 Plus National Face-to-Face Interviewing: (CATI/PAPI) - 340 field force Multiple Analysis National Telephone Interviewing: 22 CATI stations in HCMC Mixed methodology data collection to save cost, time and maintain highest quality and data integrity available New specialty Panels for: Auto / Mums / Retail / Etc Tracking with mobile / F-2-F CATI methods for hard to reach sample/locations for maximum reach and analysis 44 Key clients ADVERTISING AUTO Partner Agencies BANKING BEVERAGES CONSUMER GOODS CONSULTING TECHNOLOGY 45 FOODS HEALTHCARE Ralf Matthaes | Managing Director Tel: +84-8 2262-7627 Mobile: +84-903-949-531 Website: www.ifmresearch.com ifmpanel website: www.ifmpanel.com Email: Ralf.matthaes@infocusmekong.com 4th Floor, 21 Phung Khac Khoan Street, D.1 HCMC, Vietnam 46 ... and what might become the “new normal” of consumption behavior in Vietnam Data was collected via IFM Mobile panel Behavioral Science Lens This report includes commentary and analysis from a Behavioral. .. consumer behavioral changes brought on by the pandemic, and analyzes which of these behaviors are temporary, permanent and how Marketers can start to respond to these changes KEY SUMMARY COVID- 19 has... 26 years on the ground experience in Cambodia, Laos, Indonesia, Myanmar, Thailand and Vietnam Accurate Actionable Advanced IFM Mobile / Panel Specialized Custom Strategic Consulting Digital Ad