nielsen presentation q42014 fmcg update

VIETNAM FMCG TODAY AND TOMORROW

Vaughan Ryan, Christoph Michel 2nd March 2015

A SHARING SESSION WITH METRO C&C VIETNAM

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SLUGGISH GROWTH

GROWING EXPORTS

MODERATE INFLATION

CPI

EXPORT GROWTH

GDP

2013 2014 TARGET 2014 ACTUAL

Source: GSO

Source: GSO

Source: GSO

Source: GSO

TWO STREAMS ARE DRIVING VIETNAM'S ECONOMY

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.

4.1%

-1.4%

18.5%

13.1% 14.5%

7.4%

-1.5% -2.5% -5.4%

-2.0%

1.3% 1.1%

8.1%

1.0%

25.9%

18.0% 18.8%

11.5%

2.1% 1.1%

-2.2%

0.3% 3.4% 2.4%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Unit value change Volume change Nominal growth

Fast Moving Consumer Goods dynamics - total 6 cities (TT+MT excl. Coop)

Source: Nielsen Retail Index – Versus year ago

VOLATILITY MAKES IT HARD TO PREDICT FUTURE TRENDS

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-1.5%

15.4%

4.2%

-1.1% -2.2% -5.7%

-1.7%

1.0%

-1.1%

1.3%

19.7%

8.2%

2.6% 2.1%

-2.1%

1.3% 3.3%

-0.7%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%Traditional Trade 6 cities


Fast Moving Consumer Goods dynamics - Traditional Trade vs Modern Trade

Unite Value change Volume change Nominal growth

-3.8% -3.4% -7.1% -1.6% -2.8% -1.2%

-3.9%

-3.2%

-6.0%

-2.8%

1.0%

-3.1%

0.9% 0.3% -0.5%

-3.2%

-3.2% -4.8%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%MT HCM and HN excl. Coop Mart

Like-for-like

2014 WAS CHALLENGING ESPECIALLY IN MT

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-4.8%

-1.5%

3.1%

-0.8%

-9.7%

-10.2% -9.9%

-2.1%

2.7% 3.8%

-0.2% 1.1%

7.8%

4.2%

-5.4%

-6.4% -6.8%

-0.1%

5.0% 6.5%

-15%

-10%

-5%

0%

5%

10%

15%

On Premise - 6 cities

Unit value change Volume change Nominal growth

Source: Nielsen Retail Index – Versus year ago On-Premise Categories include Soft drinks, Gums, Beer, Energy Drinks, RTDM, RTDT, RTDC, Fruit Juice, Package Water, Sport Drinks and Cigarette Off -premise retrieved for all on-going tracking categories

Fast Moving Consumer Goods dynamics - On premise

ON PREMISE DRIVES RECENT FMCG GROWTH

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97 98 99 98

102

106

Source: Asia Pacific Consumer Confidence Report (Q4 - 2014) All respondents n = 10134

CONFIDENCE REACHES A 4-YEAR-HIGH LEVEL… Vietnam is among top 10 most confident countries globally

CCI Q4’14 - Top 10 countries globally

INDONESIA

INDIA

PHILIPPINES

UAE

THAILAND

CHINA

UNITED STATES

HONG KONG

VIETNAM

DENMARK

129

121

120

114

111

106

108

107

107

104

CCI Vietnam - from Q3’13 to Q4’14

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…YET PEOPLE REMAIN CAUTIOUS

Source: Nielsen Consumer Confidence Index – Q4’14 Note: Q: How to utilize spare cash after covering essential living expenses

: All respondents who answered Yes to Q11 (1 Code) n=500

1

2

3

4

5

Health

The Economy

Job security

Work/life Balance

Increase food price

VIETNAM TOP CONCERN Q4’14

32

34

35

40

77

Out of homeentertainment

NewTechnology

Products

New Clothes

Holidays/Vacations

Put into saving

+1

+7

+9

+2

Q4 - 2014 Change from

Q4’13

+3

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NIELSEN TRACKED CATEGORIES Total 50 categories

BEVERAGE

Beer

CSD

Fruit juice

Instant coffee

Package water

Ready to drink coffee

Ready to drink tea

Sport drink

Tea bag

Tonic food drink

HOUSEHOLD CARE

Dishwashing liquids

Fabric softener

Household cleaner

Household Insec.

Aerosol & Coil

Laundry products

Tissue

(Napkin, Toilet,

Kitchen )

PERSONAL CARE

Body Cream Lotion

Deodorants

Eyecare

Facial Care Products

Feminine Protection

Hair Conditioner

Mouth Wash Personal

Wash Shampoo

Toilet Soap

Toothbrush

Toothpaste

Insec. Lotion

Facial tissue

Hair colorant

FOOD

Biscuits & Pie

Bouillon MSG Cheese

Chilli Sauce

Cooking Oil

Gums

Instant Noodles

Mayonnaise

Meal Maker

Sauces (Soy, Fish &

Oyster)

Snack

Candy

MILK-BASED

PRODUCTS

Milk Powder

Spoon Yoghurt

Sweetened Condense

Milk

Ready to drink milk

BABY PRODUCTS

Baby Cereal

Baby Diaper

CIG

Cigarette

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37%

BEVERAGE

ONLY BEVERAGE HAS BEEN ABLE TO REALLY RECOVER

MILK BASE

17%

FOOD

15%


Super Category Contribution and Growth - total 6 cities (TT+MT excl. Coop)

Source: Nielsen Retail Index – Versus year ago. Beverage: includes On-Premise

-1.7% -2.8% -4.0%

3.0%

8.8% 11.0%

1.4%

3.8%

-3.1% -3.2% -1.8%

-5.6%

3.2% 0.9%

-2.3%

0.0% 0.2% 1.1%

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8%

CIGARETTE

14%

WHILST OTHER CATEGORIES STILL SUFFER

PERSONAL CARE

6%

HOME CARE BABY CARE

4%



10.0%

4.8%

0.6% 2.6% 3.6%

-1.9%

16.3%

8.3%

-1.3% -1.1%

2.4%

-0.9%

15.5%

19.6%

12.5%

4.5% 4.1%

-4.6%

-1.2 -1.3 -2.0 -1.9 -1.4 -2.8

Super Category Contribution and Growth - total 6 cities (TT+MT excl. Coop)

THREE TRENDS TO WATCH FOR

Urbanization

Upgradation

Sophistication

Convenience Experience Value

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+5%

+0%

Q4’14 vs. Q3’14

Number of Stores

MINIMARTS ARE GAINING MOMENTUM

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13 Source: Banners’ official website / Shopper Trends

Number of Stores

CONVENIENCE STORES EXPAND RAPIDLY

• Notable expansions in Q4 are from Family Mart and Circle K.

+6%

+2%

+10%

+29%

Q4’14 vs. Q3’14

Need it now… On-the-go… Hanging out

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3%

12%

0%

43%

Q4’14 vs. Q3’14

Number of Stores

7%

SUPERMARKET STORES ARE EXPANDING THEIR FOOTPRINT

Source: Banners’ official website

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E-COMMERCE OPPORTUNITY IS EMERGING 2014 vs 2011: Laptop grows ~ 4x, Smartphone grows ~ 8x

TOP 4 SUPPORTED PLATFORMS FOR INTERNET ACCESS

81% OWN LAPTOPS

74 % OWN DESKTOPS

37 % OWN

SMART TVs

82% OWN

SMARTPHONES

Cross-platform study in 2014 in 6 key cities, internet access from respondents; Global e-commerce study 2014

51% Airline ticket/ reservation

28% Clothes/ Shoes/ Accessories

26% Digital devices (TV, cameras...)

TOP 3 CATEGORIES WITH INTENTION TO SHOP ONLINE

TOP 3 TIPING POINTS SAFE SIMPLE SAVING

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SHOPPERS GET INCREASINGLY PRICE SAVVY

Lowest price perception Store attribute ranking

1. Convenient to get to 2. Good deals and promos 3. Easy to find what I need 4. Low prices

39% “I know the price of most of the items and always notice when the price changes”

33% “I actively search for promotions”

2008 2014

Source: Shopper Trends study 2008-2014, HCMC, HN, DaNang, Can Tho

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MORE PURCHASING POWER

Source: Monthly income per capita: GSO 2012 Occupation structure & Urbanization rate: Rural Census 2011

Education level: Nielsen Rural Syndicated Study 2009 & Nielsen Rural 2014

BUT ALSO DON’T FORGET THE MASSES

Of the population live in rural Vietnam

68%

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MORE PURCHASING POWER

Source: Monthly income per capita: GSO 2012 Occupation structure & Urbanization rate: Rural Census 2011

Education level: Nielsen Rural Syndicated Study 2009 & Nielsen Rural 2014

TO BE SUCCESSFUL IN VIETNAM YOU MUST EMBRACE RURAL

More than 2X the size of urban

Young and increasingly dynamic

Over 750K stores

Watch TV everyday

Not going to go away

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2.0%

-4.4%

5.9%

-1.9% -4.4%

-7.9%

-4.1%

-0.8%

0.1%

6.7%

0.5%

10.8%

2.1%

-0.4%

-3.3% 0.1% 2.7%

2.7%

-10%

-5%

0%

5%

10%

15%

20%

Total Urban

5.1%

-5.2%

9.4%

-0.2% -3.7%

-8.6% -6.3%

-2.7% -2.4%

8.1%

-1.4%

11.8%

2.2% 0.0%

-3.7% -1.5%

0.4% -0.7%

-10%

-5%

0%

5%

10%

15%

20%

Total Rural

Unit Value change Volume change Nominal growth

Fast Moving Consumer Goods dynamics - Urban vs Rural

Source: Nielsen Retail Index – Versus year ago 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, Energy Drink, RTDT, Cigarette

RURAL IS MORE ‘EXPRESSIVE’ THAN URBAN GREW FASTER IN UPTURN BUT DECLINES STEEPER IN DOWNTURN

55% 45%

Rural

Urban

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WHAT DOES IT MEAN FOR METRO

Brick & click

Bang for the buck

Customer Connection

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MORE PURCHASING POWER YOU NEED KNOW WHAT MAKES THEM TICK

REACH

WHO WHAT HOW

REACT RESONATE

Driving differentiated outcomes for your business in Vietnam