1. Prevailing 2013
Economic & Consumer
Trends
Ralf Matthaes
Regional Managing Director
Cambodia | Laos | Myanmar | Vietnam
©TNS 2012
1

2. THE GOOD, THE BAD, THE UGLY
2012 / Q.2 2013 macro economic overview
©TNS 2012

3. The Ugly
Un-real estate market
 No movement in the real-estate market
 Commercial rents have fallen up to 40%
Until the real estate market recovers, Vietnam will continue to struggle
©TNS 2012
3

4. The Ugly
Consumer Confidence (%)
100
80
89
78
60
79
68
64
56
40
20
0
2008
2009
2010
2011
2012
2013
Consumer confidence has dropped
due to domestic economic woes
Source: TNS CCIP – 2008 – 2013 urban only
©TNS 2012
Bad Debt
The State Bank of Vietnam
reported that at the end of
March this year Vietnam's
bad debts ratio amounted US
$9.6 billion U.S = 8.6% total
outstanding credit.
Vietnam’s 100 largest state
enterprises are indebted
about US $50 billion, or more
than one third of GDP.
Source: Reuters
Bad debt will cause havoc
in the near future

5. The Bad
Bankruptcies
Tourism (Million)
6.65
54,000
49,000
6.0
5.0
39,000
2.6
2010
2011
Q.2 - 2012
Bankruptcies are a sign of the times,
but also a measure of Vietnam’s
bubble popping
2010
2012
Jul-2013
Tourism is flat, down from 19%
growth, and should have negative
growth in 2013
Source: GSO
©TNS 2012
2011

6. GDP Growth - Bad…or Good?
6.78%
5.89%
5.03%
2010
2011
4. 9%
2012
Jul-2013
GDP = 4.9% slow down of growth actually has positive effects
Source: GSO
©TNS 2012

7. The Good
Exports
Trade Deficit
(US Billion)
12.4
114.6
96.4
9.6
72.2
71.6
0.3
2010
(US Billion)
2011
2012
2010
Jul-2013
2012
Jul-2013
Trade Deficit = a sign of fiscal
responsibility or lack of growth?
Exports are Vietnam’s saving grace
= US $72 Billion end July
Source: GSO
©TNS 2012
2011
0.7

8. The Good
Inflation
ATL Ad Spend
(%)
(US Million)
900M
18.13%
726M
760M
625M
11.75%
9.21%
6.81%
2010
2011
2012
Jul-2013
Inflation is in check, but will it
remain, as typically Q.4 sees a spike
Source: GSO
©TNS 2012
2010
2011
2012
Jul-2013
Advertising spend looks
to grow at a healthy 19%
Source: Kantar Media

9. The Good
New Foreign Direct Investment
60,271
A Rebound?
17,855
16,345
17,200
11,559
9,097
2006
2007
2008
2009
New Investment
2010
13,013
11,900
2011
2012
Jul-2013
Implemented Capital
Source: Vietnam Economic Times
TNS Consumer Confidence Poll
© TNS

10. Smartphone Ownership
Growth of smartphone ownership – Vietnam
42
35
+42%
27
19
Global
Emerging Asia
Vietnam 2013
Vietnam 2012
B1. Device ownership
Base: All respondents – Global 37698 | Emerging Asia 3491 | Vietnam 500 | Male 250 | Female 250 | 16-21 100 | 22-30 125 | 31-40 125 | 41-50 100 | 51-60 50
Local Report 2013 - Vietnam
© TNS
2013
10

11. Automotive Sales
+10.5%
26,691
24,166
Jan - April 2012
Jan - April 2013
TNS Consumer Confidence Poll
© TNS
11

12. 2013 YTD Economic indices scorecard
Ugly = 3 - Real Estate – Confidence – bad debt
Bad = 3 - Bankruptcies - FMCG growth – Tourism
Good = 5 - Modest shift towards recovery
YTD 2013 is a mixed bag, some ugly, some bad, some good
Good time to invest for the future
©TNS 2012

13. Prevailing 2013
Consumer Trends
©TNS 2012

14. Consumer Confidence (%)
100
80
89
78
60
79
68
64
56
40
20
0
2008
2009
2010
2011
2012
2013
Consumer confidence has dropped due to domestic economic woes
Source: TNS CCIP – 2008 – 2012 urban only
©TNS 2012

15. Recession impact
 SEC differences are stark
 Education, life stage impact views & involvement
 A-B: relatively safe & stable in the “storm”, yet conscious of what’s
happening around/ to poorer people
 D-E :are doing it tough; it’s really tough in E- managing a family
on 3 million VND a month
“I don’t feel
much different.
I don’t feel the
impact of
economic crisis
on me”
©TNS 2012
vs
“too much
stress, the
worry always
sticks in my
mind, we don’t
even have time
to feel happy or
relaxed…”

16. Is your present job is safe or not?
Employment fears
on the rise leading
to more caution,
less spend
Jan-13
Aug-12
63
32
68
20
5
12
Present job is safe
Chance of unemployment
Don't know
Source: TNS 2013 VCCI – Urban only
©TNS 2012

17. Forecast in the next 12 months
2013
Consumer Confidence
index = 56
Value of the…
25
40
Employment
12
The cost of living
11
34
9
40
Vietnam's economy
My personal… 6
Foreign investment
3
24
39
15
24
82
1
5
17 3
6
18 3
4
24
81
5
22
9
2 12
48
2 17
38
29
34
18
48
26
Far worse
A little better
2012
Consumer Confidence
index = 68
30
4 13
45
34
38
30
25
23
3
41
26
4
35
29
A little worse
Far better
14 1
30
2
33
32
6
38
Same
DK
Consumer confidence index has dropped a massive 12 points in just 6 months,
driven by consumer fears across most indices - not reassuring
Source: TNS 2013 VCCI – Urban only
©TNS 2012
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18. 1. Consumers spending will be down in 2013
Consumer backlash to economic downturn
will result in specific spend cuts
40
Entertainment & dining out
House hold care products
Household utilities
Personal equipment (mobile…
Home appliances (wash…
Transportation
Personal care products
Communications…
Health care products/services
Food & beverages products
Education
Less
25
25
25
24
21
21
17
17
15
8
39
20
21
24
22
22
36
21
24
36
27
45
54
51
52
54
43
58
58
46
58
45
Same
More
1
1
-
+
1
1
2
DK
Source: TNS 2013 VCCI – Urban only
©TNS 2012
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19. 2. Mobile device as the everything hub
As the availability of
wireless broadband
expands & the cost of
advanced mobile
phones drop, the
mobile device will
become the preferred
hub for digital activity.
DEVELOP YOUTH
APPLICACTIOSN FOR
YOUR BUSINESS
©TNS 2012
Absolutely!

20. 3. Authenticity matters
Authenticity will become paramount for brands as they look to
regain credibility and trust. Consumers have lost a great deal of
faith in brands; they are searching for truths and clamouring for
transparency.
Yes!
“I need to know the
companies where the
products or services are
from so I have
confidence to use them”
GUARANTEE
QUALITY / SAFETY
©TNS 2012

21. 4. Modern trade growth is in decline
FMCG
General Trade
Modern Trade
Value growth
July 12
July 13
15%
19%
Value contribution
July 11
July 12
July 13
82.5
82.0
82.2
17.5
18.0
17.8
Generally prices at modern trade have out reached consumers pockets,
while traditional trade still offers affordability and security
©TNS 2012

22. 5. Buy / use less / conserve / save5.
Value growth
(%)
Price growth
(%)
2008-2009
18.6
2009-2010
16.7
2010-2011
16.2
13.0
2011-2012
16.0
13.9
18.8
8.5
Volume growth
(%)
0.1
7.6
3.0
6.0
2012 - 2013 Value Growth down to 11.6% and volume down to 4.8%
Source: Kantar Worldpanel
Urban only
©TNS 2012

23. Marketing trends

24. 1. Internet as a research tool
ENSURE YOU ARE DIGITAL
As the value of
purchases increases, the
amount of research both
off and particularly
online also increases
Source: TNS Digital life 2012
©TNS 2012

25. 2. Promotion Impact – Coupon Crazy
Discounted prices are preferred promotions, driving
“Groupon” & on-line coupon discount popularity
2008
54
46
On-line Coupons
“I often buy stuff I
don’t even need
right now, because
prices are so
cheap”
18
13
8
Discounted
price
2011
Free gift with
purchase
10
10
9
Get free
Sweepstake/Luck product/sample
y draw prizes
with multiple
purchase
8
5
Monetary gift
Source: TNS VietCycle 2011 – Urban only
©TNS 2012

26. 3. Media Spend – driven by security of TV
Media
2013 (Q1)
2012 (Q1)
Difference
4.991.72
3.329.87
49.9%
5.75
5.21
10.3%
Newspaper
275.65
294.62
-6.4%
Magazines
174.33
189.54
-8.0%
5.447.45
3.819.23
42.6%
TV
Radio
May be due to advertisers shifting form BLT to ATL for
measurability but has slowed in Q.3 to 19% YTD
TNS Consumer Confidence Poll
© TNS
26

27. 4.Brand innovation & new product launches
X-Men
Manly
international
standard ads
for men
©TNS 2012
Knorr
All-in-one new
multiple spices
for specific
meals
Pro Beauty
New Yogurt
gives you
beautiful
skin
Kent
Taste &
strength
control filter
Non to menthol

28. Summary
+/©TNS 2012
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29. 5 P’s to consider in 2013
People / Vietnamese Mindsets
 VN Consumers stuck for opportunities – need reason to believe
 Confidence down – savings up – Education & Health industries booming
 Psychological change afoot – from community to self
 16 million modern youth become consumers over next 10 years
Product / Extension
 F&B is the soul of the nation – 47% of spend – extend portfolio
 Address hygiene & food safety concerns and create guarantees
 The word is not innovation it is “NEW”
Product Position
 Convenience and price points critical to success
 Vietnamize or authenticate
©TNS 2012

30. 5 P’s to consider in 2013
Promotion
 Digital – think APS / multiple entertainment media / product research
 Develop coupon scheme
Place
 Review distribution GT vs Modern and urban vs rural
 Significant regional differences require different approaches
 Drive efforts in rural Vietnam
Price
 Over half of consumers are suffering from recession
 Review pack type / SKU offer
 Discount with an explanation / Groupons
 Vietnamese brands are not only competing on price
©TNS 2012

31. 2013 Economic forecast
Negatives
State Debt is huge
Sagging consumer confidence
Unemployment
Slower growth & spend
Reliance on cheap exports
Will to address core issues?
Continued slight downward trend but
also elements beginning to improve
Positives
Vietnam still largely untapped
Global / SEA investment interest
Overseas remittance
More competitive / Lower prices
Cheaper cost of entry
Certain categories growing very
well
©TNS 2012

32. Growth summary
2013 focus






Drive differentiation in offer
Understand price points
Drive loyalty & assurance
Cross promote
Be faster than competition
Maximize digital reach
Bottom is in sight – the only way is up!
©TNS 2012
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33. Thank you
©TNS 2012