E-COMMERCE IN

VIETNAM

Copyright © 2017 The Nielsen Company. Confidential and proprietary.

 VIETNAM –
A MARKET OF
OPPORTUNITIES

Copyright © 2017 The Nielsen Company. Confidential and proprietary.

 VIETNAM REMAINS ONE OF THE FASTEST GROWING IN SOUTHEAST ASIA

Vietnam Malaysia Philippine Singapore Indonesia Thailand

GDP Q2’19
growth vs. YA
6.8 6.0
4.2 5.1
3.3
1.9

Vietnam Malaysia Philippine Singapore Indonesia Thailand

Copyright © 2017 The Nielsen Company. Confidential and proprietary.

FMCG MAT Q2’19

growth vs. YA 10.0
10.0
10.0
10.0

9.0
9.0
9.0
9.0
8.6 8.1
8.0
8.0
8.0
8.0

7.0
7.0
7.0
7.0
5.8
6.0
6.0
6.0
6.0

5.0
5.0
5.0
5.0

4.0
4.0
4.0
4.0
2.8
0.5
3.0
3.0

0.1
3.0
3.0

2.0
2.0
2.0
2.0

1.0
1.0
1.0
1.0

0.0
0.0
0.0
0.0

Vietnam Malaysia Philippine Singapore Indonesia Thailand

Consumer Confidence 123 130 126
140
140
140
140

110 105
Index
120
120
120
120

100
100
100
100
92
80
80
80
80

60
60
60
60

40
40
40
40

20
20
20
20

0
00
0

• Vietnam
Source: GSO Malaysia
Vietnam. Economist Intelligence Unit. Nielsen Quarter by number report Q2’19 Singapore Indonesia Thailand
3
 CONSUMERS ARE STILL ASSURED.
HOWEVER, WITNESS CUT-
CUT-BACKS & PRICE CONCERNS
CONSUMER CONFIDENCE INDEX* TOP VIETNAMESE INCREASING CONCERNS

129
120 122 129 123
112 114 117 117 117
2018-Q2
2018-Q3
2018-Q4
2019-Q1
2019-Q2

Asia Pacific Vietnam 44% 13% 9%

(+2pts vs. Q2’18) (+1pts vs. Q2’18) (+2pts vs. Q2’18)
VIETNAMESE TOP SPENDING AFTER NECESSITY
78
75 CHILDREN
72 73 72 HEALTH INCREASING BILLS
70 69 EDUCATION
66
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

63 Savings

New clothes
53 53
55 % Respondents say these are there top 2 biggest concerns
51 Holidays/vacations
49
46 46 47 47 46
44 48 53 47 New technology products
43
40 49 50 39
36
44 44
42 46 42
48
46
48
39
46
48
39
OOH entertainment
ELECTRICITY PRICE INCREASE
37 43 43 38 Home improvements
31
38 38
41 40
Electricity price uplifted 8.36%
8.36%
30
29
in Mar’19 after 2 years of stability
Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

% Respondents say they will spend on this item after necessities

Consumer Confidence Index: Perceptions of local job prospects, Perceptions of state of personal finances over the next 12 months, Perceptions of good/bad time for people to buy the things they want and need over the next 12 months. Source: Nielsen
4
Global Survey Consumer Confidence Section
 VIETNAM HAS A YOUNG POPULATION WITH MILLENNIALS DOMINANT &
GEN Z ARE CONSUMERS OF FUTURE
2015 2025
SHARE OF POPULATION
MILLENNIALS
GEN Z (20-49 y.o) BABY BOOMER
(15-19 y.o) (50-64 y.o)

7%
18%
7% 14%

43%
48%
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

• Super connected with synergy • Seek for delivery services

between Online & Offline activities
• Care about society issues (social
responsibility, gender equality, LGBTQ)
• Strong POV & KOL influence
• Willing to try Health supplement
• Seek for greater convenience
products
• More going out
• Open to new things
• Go premium but value for money
5
 FAST CHANGING PACE OF MODERN “CASH-RICH TIME-POOR”
LIFESTYLE LEADING TO THE BOOMING OF CONVENIENCE SOLUTIONS
THEY ARE ALSO LOOKING FOR &
VIETNAMESE ARE LIVING IN
WILLING TO SPEND ON
SMALLER YET RICHER HOUSEHOLD
CONVENIENCE PRODUCTS

Vietnam average household size & wage
“Anything that saves me time is worth
5.00 4.59
4.13
3.78 3.60
300
56% paying extra for”
4.00 3.50 250
200 Household size
3.00
150 ('person)
2.00
100 Wage per month
1.00 50 ('USD)
0.00 0
MT # of stores – Mar’19
2000

2005

2010

2015

Est. 2020

7,968| +14% vs YA
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

BUSIER WORK Top 2 important attributes for shopping in

Longer working hours with more pressure 5.1 Supermarket/ CVS/ Mini-mart
hours/week ~ 9 hours
hours/day
SUPERMARKET CVS/ MINI-
MINI-MART
EVOLVING WOMAN’S ROLE Convenient to get to Convenient to get to
79.6% - Female labor force participation rate. Highest in Easy to find what I need Always available in stock
APAC (average of 50.1%)

Source: EIU. CEICDATA.com. International Labor Organization est. for 2025 Source: Nielsen shopper trend 2017-2018

6
 THE RISE OF
NEW
CHANNELS

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 MODERN TRADE IS BOOMING RAPIDLY ACROSS STORE TYPES &
DRIVING THE GROWTH OF FMCG

TRADITIONAL TRADE MODERN TRADE

Value % contribution – Total

87% Vietnam OFF+ON Premises in
MAT Jul’19
13%
Growth % vs. YA
5% 19%
Updated: Universe Update H1’18 Updated: Jul’19
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

~ 1.5 MIL STORES (+0.2% vs. YA) 7,968 STORES (+14% vs Oct’18)

Hyper/ Supermarket* 717

Market Stall 65,248
Minimart & Food Store* 5,301
ON Premise 675,469
Convenience Store 889
OFF Premise 811,032
Modern Drug Store** 434

Mom & Kid Store 627

Source: Nielsen Retail Measurement, Nielsen Universe Update, * including independent stores, ** including Health & Beauty store
MAT : Moving Annual Total, FMCG includes 37 categories without Cigarette 8
 SMALL FORMAT CONTINUES GAINING IN “PENETRATION”, “FREQUENCY”
AND “MOST SPENDING”

Wet Markets Traditional Supermarkets Department Health & Convenience Minimarts

Grocery Store Beauty Stores
Drugstore

PENETRATION 86 81 97 14 32 46 51
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

FREQUENCY 18.7 7.0 2.3 0.7 1.2 4.2 3.7

SPEND MOST AT 36 7 45 0 1 3 2

Base: 2018 (n=1500), 2019 (n=1702)

Ref: Q7a Which of these types of stores have you visited in the past 7 days?
Ref: Q8 On average, how often would you shop at the following type of store? 9
Ref: Q7d Which of these types of stores would be the one where you normally buy most of your food and grocery items?
E-
COMMERCE

This artwork was created using Nielsen data.

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
10
 HIGH INTERNET PENETRATION FUEL THE GROWTH OF
ONLINE PURCHASE IN VIETNAM
INTERNET FREQUENCY OF DAILY
PENETRATION INTERNET USE TIME SPENT

53% 85% 6.5H

DAILY

4,021 BILLION 3,418 BILLION 6H 33M DAILY TIME

Copyright © 2017 The Nielsen Company. Confidential and proprietary.

CONNECTED PEOPLE CONNECTED PEOPLE SPENT ONLINE

APAC 51% APAC 86% APAC 7H 34M

Japan 94% Hong Kong 95% Thailand 9H 38M

Highest in APAC
Myanmar 29% Phillippines 58 % South Korea 5H 04M

Vietnam 58% Vietnam 94 % Vietnam 6H 52M Lowest in APAC

11
Source: Internet Penetration: Demand Institute | Mobile Internet Penetration, Frequency and Daily Time Spent: We Are Social & Hootsuite, Digital in 2018
 INFRASTRUCTURE & DEVELOPMENT RATE OF
E-COMMERCE IN VIETNAM TO 2020 REACHING $10 BILLION
MARKET VALUE
10 billion
USD
8.1 billion
USD
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

2018 2020

$250/ 30%/
$350/ 20%/
person year
person year

12
 E-COMMERCE SIZE & EVOLUTION
In 2018, US$2.901 Billion globally (12.0% of Total Retail Sales)

CENTRAL &
EAST EUROPE
SALES 5.2%
GROWTH +20.6%

WEST
EUROPE
NORTH AMERICA ASIA-PACIFIC
SALES 9.6%
SALES 9.9% SALES 18.3%
GROWTH +11.6%
GROWTH +16.5% GROWTH +30.3%

VIETNAM
SALES <1%
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

GROWTH +30%
AFRICA &
MIDDLE EAST
SALES 2.2%
LATIN AMERICA GROWTH +22.6%
SALES 2.7%
GROWTH +17.9%

Source: eMarketer | Worldwide Retail e-commerce Sales by Region | 2018 – All categories | Hootsuite 2018 13
 FMCG ONLINE TO GROW ~4X FASTER THAN FMCG OFFLINE & GDP
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

* Nielsen forecasts based on 34 countries

** CAGR: Compound Annual Growth Rate 14
 ONLINE IS ALREADY A DOMINANT CHANNEL IN
SOME MARKETS
Diapers, South Korea Skin Care, China Cosmetics & Fragrances, UK

35% 20%

68%

Pet Food, Sweden OTC, Germany

Copyright © 2017 The Nielsen Company. Confidential and proprietary.

16% 14%

Legend: ONLINE SALES OFFLINE SALES

15
 WHAT PEOPLE BUY ONLINE THESE DAYS - VN & APAC
% of consumers who have purchased the following categories online (penetration)

APAC VIETNAM
69% 70%

55%
53%
51%
49%
47%
44%
40%
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

26%

61% 45% 40% 38% 36% 34% 31% 29% 24% 23%

Fashion Beauty & Books & Music IT & Mobile Consumer Household care Packaged Travel Children & Event Tickets
Personal care Electronics grocery food baby products

Source: Nielsen Global Commerce Study 2018 16

 PROMOTION IS KEY TRAFFIC DRIVING FACTOR FOR
MOST E-RETAILERS

SENDO SALE DAY 7.7 SHOPEE SALE DAY 9.9 TIKI MUSIC SPONSORSHIP
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

17
 VIETNAM E-COMMERCE BARRIERS

PRODUCT QUALITY
ACCESSIBILITY EXPERIENCE TRUST
AND SERVICE

Products may have Some websites are

DO NOT TRUST
a problem when not easy to “Inconvenience”
online shopping
delivered process

Actual product is “The real stores

Not familiar with
not the same as are not far from Afraid of FRAUD
online shopping
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

website where I live”

“I want to see
Do not have a products in reality
credit card before
purchasing”.

Source: The Nielsen Vietnam Omni-Shopper Trend Report 2018 18

 ENABLE YOUR SUCCESS IN VIETNAM
MARKET POTENTIAL
• Vietnam holds promising growth
in both GDP & FMCG
• Consumers are young, optimistic,
and seeking convenience
solutions
Copyright © 2017 The Nielsen Company. Confidential and proprietary.
MARKET
LANDSCAPE
• Traditional Trade is still key
channel with 1.5M stores,
contributing to 87% of FMCG
• Modern Trade is booming with
store expansion and higher
consumer penetration
E-COMMERCE
• Vietnam has strong foundation for E-commerce to take off with high
internet and smartphone penetration
• Still humble, ~1% FMCG, growing 30+%
• Have much white space for across categories,
• Very promotional driven
• Need to overcome trust issue for sustainable growth