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Vietnam consumer trends 2015-2016

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Presentation from 11th Crystal Ball Business Luncheon at CANCHAM (Canadian Chamber of Commerce Vietnam) given by the Ralf Matthaes.
Presentation highlights consumer and economic trends of the passing year (2015) and what we should expect in 2016.
Ralf is a Managing Director of Infocus Mekong Research (IFM): an innovative technology-driven market research agency specializing in mobile, custom & integrated strategic research in Vietnam, Myanmar, Cambodia and Laos region.

Published in: Data & Analytics
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Vietnam consumer trends 2015-2016

  1. 1. www.ifmresearch.com 1 THE GOAT IN REVIEW / THE MONKEY PREVIEW VIETNAM CONSUMER TRENDS 2015 – 2016 Ralf Matthaes Managing Director Infocus Mekong Research
  2. 2. www.ifmresearch.com 2 79 68 56 51 82 86 0 10 20 30 40 50 60 70 80 90 100 2011 2012 2013 2014 2015 2016 A massive increase in Consumer and Business confidence over last 18 months indicates that Consumer spend and business expansion should be on the rise. Consumer Confidence Index (%): TNS 2011-2015 & Infocus CCI 2016 | Urban onlyx 2011 - 2016 Confidence Indices 79 48 56 78 59 X Business Confidence Index (%): Euro Cham Vietnam
  3. 3. www.ifmresearch.com 3 25% 48% 47% 18% 15% 11% 9% 35% 36% 36% 37% 29% 38% 32% 41% 17% 17% 45% 56% 51% 60% Average % Value of the Vietnamese dong The cost of living Employment Vietnam's economy My personal standard of living Foreign investment worse same better Average Perception of 2016 in terms of key economic indices Key concerns for 2016 revolve around the value of the VND and the increase in the cost of living, while FDI, personal standard of living and Vietnam’s economic prosperity are big positives…. source: Infocus CCI Base: n = 512
  4. 4. www.ifmresearch.com 4 Will you spend More - The Same - Less in 2016 vs 2015? 45% 34% 38% 38% 40% 44% 44% 47% 48% 50% 55% 56% 47% 55% 55% 56% 49% 52% 38% 47% 44% 44% 41% 38% Average % Home appliances Household utilities Transportation Personal quip. (phones/laptops, etc) communications (tele.email) Entertainment & dining out Food & beverages products Personal care products House hold care products Health care products/services Education more same less source: Infocus CCI Base: n = 512 2016 should see continued growth in consumer spend. Education, Healthcare and Household products should see the positive upswings in spend. Average
  5. 5. www.ifmresearch.com 5 41 54 60 81 84 86 4 11 42 37 58 31 0 10 20 30 40 50 60 70 80 90 100 Smart TV iPad /Tablet Desktop Laptop Home Wifi Internet Smart Phone Urban Digital Ownership 2013 2015 Explosion of Digital & Smartphones source: Infocus Base: n = 2,800 In a short two years, all that is smart / communications driven has exploded. Consumers are craving connectivity / info / entertainment via personalized gadgets…
  6. 6. www.ifmresearch.com 6 Growth of high end / high cost items 111 000 157 000 215 000 290 000 0 50 000 100 000 150 000 200 000 250 000 300 000 2013 2014 2015 2016* Automobile sales Auto sales are indicative of Vietnamese joining the developed world & upscaling their lives source: V.A.M.A 2 8 5 40 70 13 32 48 59 91 0 10 20 30 40 50 60 70 80 90 100 Vehicles Life insurance Credit | Debit card Air-con ATM Card Urban ownership growth (%) 2013 2015 source: Infocus Base: n = 2,800 Huge growth in creature features and security products, highlighting desire for global integration *estimate
  7. 7. www.ifmresearch.com 7 Percentage of consumer who took out loans in 2015 & why? 36 25 20 5 5 5 0 10 20 30 40 Lower income Total Higher income Yes Yes More than 1 An astonishing 30% of those surveyed took out bank loans in 2015 & 41% of lower income earners, mostly for real estate (35%) & business investments (25%). 5% 35% 24% 13% 9% 14% Purpose of Loan Automobile Real Estate Business Education Personal Others Take out Loan source: Infocus CCI Base: n = 512
  8. 8. www.ifmresearch.com 8 FMCG Value & Volume growth % 2013-2015 10,1 4,3 3,2 4,7 1,6 2 0 2 4 6 8 10 12 2012-2013 2013-2014 2014-2015 Urban Value / Volume Growth % Value % Volume % 10,5 11,8 8 7,4 9,4 6,4 0 2 4 6 8 10 12 14 2012-2013 2013-2014 2014-2015 Rural Value / Volume Growth % Value % Volume % Overall FMCG growth is down from last year, partially driven by a reduction of CPI (0.3% YoY end of November), but also largely due to limited increases in salaries, bonuses and a sense that consumers have different spending priorities. source:
  9. 9. www.ifmresearch.com 9 19 11 2 4 15 12 4,2 3,1 0 2 4 6 8 10 12 14 16 18 20 2012 2013 2014 2015 FMCG Modern vs General Trade Value Growth (%) Modern General Modern vs General Trade FMCG Value Growth (%) The past 3 years have seen a huge drop of both Modern & General FMCG value growth in urban Vietnam, indicating either saturation or consumers tightening spend for other trade offs. Modern Trade is showing a positive increase for the 1st time in years, though small. source:
  10. 10. www.ifmresearch.com 10 Media spend by Medium: 2013 – 2015 (US Billion) 1 320 1 537 1 719 98 84 77 34 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2013 2014 2015 TV Print (all) Digital Radio Overall Media spend grew by 10% in 2015. TV makes up over 90% of all measured advertising spend, yet the mobile phone is becoming the # 1 source of time being spent in urban Vietnam, yet digital spend is still negligible…. Makes you wonder!!! source:
  11. 11. www.ifmresearch.com 11 Daily activity do you do most, when not working? 29% 5% 9% Using Smart Phone Using Laptop / PC Watching TV Others source: Infocus CCI Base: n = 512 2% 26% 25% 18% 29% 0% 10% 20% 30% 1 hour or less / day 1-2 hours / day 2-3 hours / day 3-4 hours / day 4 plus hours / day Most popular daily activity (%) Major shift in consumers activities to mobile and on-line. Over half of urban consumers note mobile usage as #1 activity, of which ¼ spend 4 plus hours a day on their mobile. Vietnam has caught up very quickly…. 57% Time spent on your favorite medium(%)
  12. 12. www.ifmresearch.com 12 The growth of smartphone opportunity in Vietnam 68 57 49 39 32 43 51 61 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2013 2014 2015 2016 est. Smart vs Feature phone share growth (%) Feature Phone Smartphones Smartphone ownership is the single largest consumer growth opportunity in Vietnam, with an average growth rate of over 30% annually. With urban Vietnam already over 80% penetration, the last conquest is rural Vietnam, changing the face of communication forever… Are you READY! source:
  13. 13. www.ifmresearch.com 13 2016 Predictions „The trouble with our times is that the future is not what it used to be.” Paul Valery
  14. 14. www.ifmresearch.com 14 Vietnam is out of recession, but… 2015 KEY GROWTH TRENDS 2016 PREDICTIONS Positives = Confidence, Growth & Spend 1 Business & Consumer confidence have increased substantially, driving growth Increase investment and consumer spend should make 2016 best year ever, in terms of overall growth 2 Over 25% growth of Digital & Mobile connectivity Much more opportunity for digital content, messaging and overall connectivity… 3 Gradual increase in FMCG spend in Modern Trade Continued growth in modern trade with potential uplift for overall FMCG spend 4 Growth of Banking, Education, Healthcare spend, etc. Accelerations of all, so long at CPI stays in check Negatives = debt culture aligning with China? 1 VN becoming debt reliant / credit culture, borrowing to catch up with the “Nguyens” Any major global crisis / currency destabilization, could be devastating for Vietnam due to bad debt 2 New laws on investment, enterprise, real estate, etc., yet to see impact - Danger! Fear of mass speculation and skyrocketing inflation as in 2008…
  15. 15. www.ifmresearch.com 15 Cam On Ralf Matthaes | Managing Director ralf.matthaes@infocusmekong.com mobile: +84-903-949-531

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