2017 IN REVIEW:

ECONOMY, FMCG & POSSIBILITIES

Nielsen Market Pulse Report – Year-end 2017
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

Prepared by Nielsen Market Pulse Team

Copyright © 2017 The Nielsen Company. Confidential and proprietary.

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 GROWTH ACROSS SECTORS DRIVES HOME BEST GDP
PERFORMANCE IN A DECADE
Industry and Services’ robustness is joined by Agriculture’s recovery

GDP % Growth vs. Year Ago Sectors’ GDP Growth vs. Year Ago
9.6
2017’s 6.8%
growth 7.1 7.6 8.0
6.0 6.3 7.0 7.4
exceeds 6.7% target 3.5
2.4 2.9
1.4

6.7 6.8 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017
6.4 6.2 6.2
6.0 Agriculture Industry Services
5.7 5.4 5.4
5.3
CPI Growth vs. Year Ago
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

9.2
6.6
4.1 CPI is under target 4%,
2.7 3.5 indicating well-managed
0.6 monetary policy

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: GSO - Social and economic situation in Full Year 2017 2

 GOVERNMENT CONTINUES TO PLAY A CRUCIAL ROLE
IN REASSURING AND STIMULATING THE ECONOMY
Vietnam’s 2017 PMI reflects
TAX an optimistic picture for manufacturing

55
Proposed tax hikes put
on hold in Q3 2017 to
spur economic growth

50
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

-0.25%
13.
In July, State Bank of Vietnam
9% lowered lending rate for the
1st time in 3 years to assist
business still relying on loans
45

6.25%
3
Source: Nikkei, GSO Vietnam
 VIETNAM’S ATTRACTIVENESS ON GLOBAL LANDSCAPE
IS FURTHER IMPROVED

GLOBAL COMPETITIVENESS GLOBAL RETAIL

RANKING 2017 DEVELOPMENT INDEX 2017
VIETNAM – Ranking
VIETNAM – Ranking
6/30
55/137 top developing
(▲5 vs. 2016) countries for retail
investment
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

TOP 5:
HIGHEST IN PAST 10 YEARS
INDIA | CHINA | MALAYSIA | TURKEY | UAE

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Source: GCR 2017-2018 report by World Economic Forum - GRDI report 2017 by A.T. Kearney
 FDI SECTOR IS STILL A VITAL PART OF THE ECONOMY,
ATTRACTING CASH FLOW THROUGH INVESTMENT & EXPORT

Registered FDI Record-breaking

33.8 Bn. USD 400 Bn. USD
▲47% vs 2016 Goods Trade Flow

JAPAN KOREA SINGAPORE

COUNTRIES

Balance of Trade
TOP

2.7 Bn. USD surplus

25.4% 23.7% 14.8%

PROCESSING ELECTRICITY REAL ESTATE

SECTORS
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

TOP

FDI Sector Domestic sector

44.2% 23.3% 8.5%
26.1
Bn. USD
HO CHI MINH BAC NINH THANH HOA 28.8 Surplus Deficit
LOCATION

Bn.USD
TOP

18.1% 9.5% 8.8%

Source: Vietnam Foreign Investment Agency (FIA) 2017. GSO, Social economic status 12 months of 2017 5
 DEVELOPMENT IN TOURISM IS ALSO A POTENTIAL
SOURCE OF ECONOMY AND FMCG GROWTH

Government Two-year pilot VISA

JAN 2017

turned TOURISM plan to launch EXEMPTION

into a SPEARHEAD E-VISA for 5 Western
economic sector for tourists from European
40 countries countries

VIETNAM TOURISM IN 2017

Not only DOMESTIC tourism But also OUTBOUND travel
grows well… witnesses the peak
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

73 Mn. visitors 6th Fastest growing tourist

+20% vs 2016 destination 2017

Total value 13 Mn. international visitors

23 Bn. USD +30% vs 2016

Source: GSO, Social economic status 12 months of 2017. UNWTO World Tourism Barometer 2017 6
 PROMISE LANDS: MIGRATION REVEALS OPPORTUNITIES
IN BOTH URBAN & RURAL
DEMOGRAPHICS 2017 – URBAN VS. RURAL MIGRATION FLOWS (% of migrants)

100 4.0
65 56 47 45 24
18%
80 Increase
3.0
consumer base
2.3
60 2.2 2.2
2.6 URBAN
2.0

50%
1.6
40
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

20
1.0
3%
35 44 53 55 76 RURAL
0 0.0
Vietnam Philippines Thailand Indonesia Malaysia Bring urban
lifestyle to rural
Urban population (%) Rural population (%) 29%
Urbanization rate (%)

Source: Regions follow government’s definition. GSO Population report 2016. Net migration = immigrants – emigrants 7
The World Factbook (CIA, 2017)
 AS ECONOMY FLOURISHES, CONSUMERS’ CONCERN
SHIFTS FROM JOB SECURITY TO PRICE

Top Consumers’ Concerns Q3’17 vs. Q3’16

JOB SECURITY HEALTH WORK/ LIFE BALANCE THE ECONOMY

(41%, -6%) (37%, +3%) (27%, +2%) (22%, +4%)
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

INCREASING INCREASING INCREASING

UTILITY BILLS FOOD PRICE FUEL PRICE
(10%, +2%) (8%, +2%) (6%, +4%)

Q: % respondents say these are top concern

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Source: Nielsen Consumer Confidence Survey
 CONSUMER’S GROWING CONCERNS REFLECT PRICE
INCREASE ON EVERYDAY’S NECESSITIES
2017 sees 24 petrol price adjustments,
Electricity joins in with ▲6% price
▲1,190 VND from 2016
hike in December 2017
Price continues to rise in early 2018

Though CPI is still under control, price hikes can still affect consumer confidence,
given Vietnamese spends relatively more on commodities:

Estimated Annual Petrol Expenses Estimated Annual Electricity Expenses

vs. GDP Per Capita vs. GDP Per Capita

3.0%
4.6% 4.8%
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

4.3%
2.1% 3.5%
1.8%
1.3%
1.9%
1.4%

0.2%

Vietnam Laos Phillipines Indonesia Thailand Vietnam Cambodia Laos Phillipines Indonesia Thailand

Petrol price & petrol consumption per capita gathered from GlobalPetrolPrice.com
Electricity price from VNEconomy.vn, Electricity consumption & GDP per capita from Wikipedia. 9
 LIVELIHOOD IS ALSO IMPACTED BY UNPREDICTABLE
AND CATASTROPHIC NATURAL DISASTERS
Disasters repeatedly struck towards end of year with Unprecedented
increased intensity and carnage damage recorded

7 August, 2017 9 October, 2017

Damage Caused By Natural
Heavy rain triggered flash floods and Tropical Depression 23W Disasters, Bn. VND
landslides 40,000 people impacted,
231 houses collapsed, 425 houses and 340 >8,000ha of rice damaged
ha agricultural land damaged and 40,000 animals
59,300
perished

15 September, 2017 4 November, 2017

Typhoon Doksuri Typhoon Damrey
692,000 people impacted, 500,000 people affected,
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

>11,000 ha agricultural >12,000ha agricultural lands

lands damaged damaged

17,000

For the 1st time, Vietnam endures

16 typhoons (5 making landfall)
10-year Average 2017

Source: Tapchitaichinh.vn 10
 DESPITE Q4 SLOW DOWN, FMCG STILL SEES POSITIVE
GROWTH IN 2017
FMCG Growth YA – Traditional Trade Nationwide

8.9%

6.5% 6.4%
5.6% 5.7%
5.4%
4.9% 4.8% 7.9%

3.8% 5.1%
3.2% 5.8%
4.5% 3.2% 5.0%
2.8%
1.0%

1.8% 1.6% 1.8% 1.8% 1.4%

0.8% 0.9% 0.7% 0.6% 0.5%
-0.1%
0.6%
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

2016 2017 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

Unit Value Growth Volume Change (Weighted Value) Nominal Value Growth

Categories including: Shampoo, Hair Conditioner, Toilet Soap, Toothpaste, Toothbrush, Feminine Protection, Laundry, Dishwashing Liquid, Fabric Softener, Household Cleaner, H.I.
Aerosol, H.I. Coil, Insecticide Control, Msg-Bouillon, Instant Noodles, Biscuits, Pie & Sponge Cake, Soft Drink, Energy Drink, RTD Tea, Fruit Juice, Package Water, Sport Drink, Coffee , Beer,
RTD Milk, SCM, Sauces, Chili Sauce, Tonic Fodd Drink, Cigarette.
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 …DRIVEN BY RURAL AT A FASTER PACE

Fast Moving Consumer Goods dynamics – By Urban/Rural

VIETNAM URBAN (50%) RURAL (50%)

6.1%
5.4%
4.9% 4.9%
4.1% 4.0%
3.2% 3.0% 5.4%
4.5%
3.0% 3.2%
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

1.8% 1.9%
1.0% 0.8%
0.8% 0.8%

MAT
2016LY MAT
2017TY MAT
2016LY MAT
2017TY 2016LY
MAT 2017TY
MAT

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, Packaged Water, Energy Drink, RTDT, Cigarette, Sport Drink, Sweet Condensed Milk, Fruit Juice , Household Cleaners, Beer, Instant Noodles, Household Insecticide, Tonic Food
Drinks, Pie&Sponge Cake, and Biscuits 12
 MOST CATEGORIES SUSTAIN/ACCELERATE,
EXCEPT FOR MILK BASE & PERSONAL CARE
FMCG - Value Contribution (%) FMCG – Value Growth
Total Nationwide
2016 vs. 2015 2017 vs 2016
Value Growth Value Growth

TOTAL FMCG +4.9% +5.4%

20.9 22.3 23.3
Beer 12% 10%

23.9 Beverage*
23.1 22.7 1% 4%

Food 2% 4%
15.2 14.8 14.6
Copyright © 2017 The Nielsen Company. Confidential and proprietary.

Milk Base 6% 4%
9.2 9.4 9.2
Cigarette 5% 5%

19.0 18.9 18.8

Personal Care 5% 2%

6.0 6.1 5.8 2% 4%

Household Care
5.6 5.5 5.4
2015 2016 2017

(*): Non-alcoholic Beverage

Source: Nielsen Retail Audit data
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 2017 – THE ECONOMY ENDS ON A HIGH NOTE
• Vietnam economy shows the strongest performance in latest 10 years

• Growth across sectors with Inflation under control

• Global position improved in competitiveness and attractiveness

POSITIVE TOURISM –
EFFECTIVE DYNAMIC
BUSINESS EMERGING
REGULATIONS MIGRATIONS
PROSPECT FACTOR

Decreasing interests & FDI Influx & Manufacturers’ Multi-billion-dollar industry Opportunity for both
Maintaining tax rate willingness to spend showing potential urban & rural markets

Price hikes raise concerns with looming impact on consumer confidence

Copyright © 2017 The Nielsen Company. Confidential and proprietary.

•
TO KEEP WATCH
• Unforgiving natural disasters affect people’s livelihood

POSITIVE FMCG GROWTH

• Positive FMCG Growth in 2017 despite recent slowdown in Q4

• Rural continues posting higher growth
• Most categories sustain/accelerate, except for Milk Based & Personal Care

Copyright © 2017 The Nielsen Company. Confidential and proprietary.

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Copyright © 2017 The Nielsen Company. Confidential and proprietary.

David Levitch – Senior Manager – david.levitch@nielsen.com

Hoang Pham Lam Hong – hong.p.hoang@nielsen.com
Mai Thanh Dung – mai.dung@nielsen.com
Nguyen Thi Loi – nguyen.loi@nielsen.com
Han Tu Oanh – han.oanh@nielsen.com
Nguyen Kim Xuan Thuy – nguyen.thuy@nielsen.com
Nguyen Tran Minh Hoang – hoang.tran.nguyen@nielsen.com
Copyright © 2017 The Nielsen Company. Confidential and proprietary.
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