Retail Outlook For

2023 & TET23

Market Pulse Q4’22

Source: Retail Measurement Service, NielsenIQ Vietnam

Market Scope: Vietnam ex.SR and Ecommerce

© 2023 Nielsen Consumer LLC. All Rights Reserved.

[1]
2023 Outlook
How can manufacturers prepare for 2023?

© 2023 Nielsen Consumer LLC. All Rights Reserved.

 Economy & FMCG Consumer Retail Channels

After the pandemic, VN economy is on the strong rebounding stage in 2022

…with the highest growth in Service this year. But notice the slowdown in Q4’22
VN – GDP yearly growth vs. YA GDP growth by sectors in 2022 vs. YA

8.0 Agriculture, Forestry

6.7 6.8 7.1 7.0
6.2 6.0 6.2
Products taxes less & Fishery: +3.4%
5.3 5.4
subsidies on products
2.9 2.6

8.5 11.9
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

GDP in 2022 by Quarters

41.4
13.7 38.3

7.8
5.1 Retail sales:
Industrial &
+14.4%
5.9 Construction: +7.8%
Services:
Q1'22 Q2'22 Q3'22 Q4'22 +10.0%
Source: GSO Vietnam (Social Economic situation report)
3
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 Economy & FMCG Consumer Retail Channels

Despite slowdown in Q4 due to less global demand, there are tailwinds for
VN economy in 2023
VN – Exports & industrial production vs. YA Tailwinds for VN economy in 2023

1 Industrial & Construction in Q4’22: +4.2%

1 Recovery of international tourism:
▪ Continuous decline in new orders during Q4 amid slowing global
economy, leading to the decelerating of these sub-sectors: ▪ Tourism and travelling services +272% in 2022 vs YA, in which
international arrivals reach 23.3 times higher than YA.
✓ Manufacturing (+3.0% vs +11.6% in Q4’22 & Q3’22)
▪ Int’l arrivals in 2023F: +195% vs 2022 & reaching 55% of 2019, which
✓ Electrical demand of Electricity, gas, steam & air conditioning supply support the service sector’s recovery amid a likely slow down of domestic demand.
(+4.5% vs. +11.6% in Q4’22 & Q3’22)

2 Exports in Q4’22: -6.8% 2 Energy transition for sustainable growth

▪ Driven by major exports: phones (-21.9%), electronics and computers (-3.3%), ▪ VN is set to follow Indonesia and South Africa with a climate financing
machinery and equipment (-4.6%), textiles (-8.3%), fibers (-38%), steel (-56%), & package of at least US$11 billion to shift its economy away from coal and boost
seafood (-9.4%). the rollout of renewable energy sources.

3 Less optimistic business trends 3 Accelerating public investment disbursement:

1/3 of manufacturing enterprises in Vietnam reported that they faced 2023F: +28.9% vs 2022’s plan, supported by:
difficulties in Q4’22 & predicted that it would be more difficult for their ✓ Relaxing inflation target in 2023F (+4.5% vs 4.0% in 2022)
businesses in Q1’23. ✓ Lifting the higher budget deficit to 4.5% in 2023F
(i.e., 33.7% and 31.2% for these 2 above questions – GSO) ✓ Reducing construction material prices in recent months

Source: GSO (Social economic situation report), Kinh tế Việt Nam 2023 nhìn từ 4 điểm nhấn vĩ mô trong quý 4/2022 (nguoiquansat.vn), Tailwinds for the Vietnamese economy in 2023 (diendandoanhnghiep.vn)
4
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 Economy & FMCG Consumer Retail Channels

VN is forecasted to sustain better growth at around +6.2% in 2023

Accelerate the internal force to overcome the imminent global recession & rising inflationary pressure
Global – GDP growth vs. YA VN – CPI growth vs. YA

6.7% by ADB Actual 2022: 3.2%

6.5% by the Target 2023: 4.5%
National Assembly 5.6
(+0.5% vs 2022 target)
8.0%
4.4

6.6%
6.2% 3.2 3.3
6.0% 2.8 3.0
2.7 2.5
5.2%
1.9 1.9
1.4
3.7% 3.7%
3.2%
0.3
2.7% 2.6%
2.4%

Q3'21
Q1'20

Q2'20

Q3'20

Q1'21

Q2'21

Q4'21

Q1'22

Q2'22

Q3'22

Q4'22
Q4/20
1.1%

Key drivers in Q4’22 vs YA:

▪ Transportation: airfares (+47.9%), train fares (+8.0%),
Global Developed Countries Emerging & Developing Vietnam passenger car fares (+16.8%), package tour (+13.5%)
Countries ▪ Education: +12.1%
▪ Housing and construction materials: +7.5%
2021 2022 2023(F)
▪ Food: +5.1%, Beverage and cigarettes: +3.6%
Source: IMF, Multiple local sources | Consumer price index, gold and USD price indexes, December 2022 – General Statistics Office of Vietnam (gso.gov.vn) ▪ Rental housing prices: +29.4%
5
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 Economy & FMCG Consumer Retail Channels

Vietnam FMCG records +17% growth in 2022, with highest uplift in Q3/4
…thanks to organic consumption. But continuous price increase could be challenge for 2023
VN – FMCG – Growth vs. YA

37.3

31.6 22.5

17.0
15.3
11.1 10.4
7.4 7.6 5.4
5.2 4.7 4.9 4.3 4.6
5.9 6.3 2.9 5.0 5.8 7.2
2.4 2.3 2.4 2.4 2.5 0.6
-7.7 -4.4
-4.8 -7.6 -8.7 -4.0 -4.6
-7.1 -13.5 -7.2 -8.3
-12.9
-13.7
-17.2

2019 2020 2021 2022 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22

Ave. Price Change Volume Change Nominal Value Growth

Source: NielsenIQ Retail Audit data ending in Dec’22 | FMCG include 38 nationwide-tracking categories
6
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 Economy & FMCG Consumer Retail Channels

Recession pressure is felt globally with some markets more than others
Global – % respondents who currently feel their country is in a recession

63%
Canada

84%
United 61%
Kingdom Germany

64% 60%
France Poland

59% 70%
67% 89% 77%
United States Italy 89%
Spain Turkey India South Korea
66%
46% Egypt
Mexico
41% 54%
Saudi Arabia Thailand
+56%
Colombia 43%
Indonesia 43%
Singapore

75% 49% 49%

Chile Brazil Australia

> 50% < 80% 70%

South Africa

Source: NielsenIQ 2023 Consumer Outlook Survey

7
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 Economy & FMCG Consumer Retail Channels

Though inflation rises, APAC seems to have a brighter landscape in 2022

Limited unit volume growth globally due to consumer budgets spread thin
% change in FMCG’s unit price – MAT TY vs YA % change in FMCG’s unit volume sales – MAT TY vs YA

0% < 90% -20% +20%

+8% -3%
Canada Canada
+6%
-3%
United
United
Kingdom +8%
Kingdom -3%
Germany Germany
+4% +12% -1% +3%
France Poland France Poland
+11% +81% -2% +1% -3%
+8% Turkey +4% +1% +1% Turkey
United States United States South Korea
Spain +6% China +5% Spain Italy
South Korea -18%
Italy
+8% +6% China
Mexico +8% Mexico
+4% -1% +8%
Vietnam
+14% Saudi +1% +16% Saudi Vietnam
Arabia +8% Thailand Arabia +12% +13%
Colombia Colombia India Thailand -5%
India
+3% Singapore
Singapore

+14 -1% -1%

% Chile Brazil
+13% Brazil +2%
+8%
Chile South Africa
South Africa

Source: NielsenIQ Global Strategic Planner | Latest 52 weeks ended Dec 3 2022 vs. year ago - Average unit price change & Unit sales change
8
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 Economy & FMCG Consumer Retail Channels

VN consumers will be still conscious of their spending in near future

…given full ‘financial’ recovery takes more time
APAC vs. VN – Consumer groups upon household financial VN – Household financial situation
Q. How events of the last few years have impacted your overall household financial situation? Q. My current household financial situation is?

12 7
(Dec’22)
APAC

25% 15% 31% 14% 14% 19

28
Better than pre covid
(Mar’22)

Same as pre covid

VN

13% 33% 36% 10% 9% 74

59 Worse than pre covid

SEA Vietnam

VN – Consciously monitoring on spendings

Q. Is your household consciously watching what it now spends?

44 40
Yes, much more
Strugglers: Rebounders: Cautious: Not Unchanged: Thrivers:
Have suffered Experienced impacted Not impacted Saved money Yes, slightly more
financial income or job financially but and continued and feel more
insecurity and loss but now are cautious to spend the financially 41 53 No
continue to do feel they are with spending. same. secure. Same as pre-Covid
so today. back on track.

SEA Vietnam

Source: NielsenIQ 2022 Consumer Outlook Survey (APAC – Dec’22/Jan’23 , Vietnam - Mar’22) | Asia Pacific data includes 7 countries – Australia, China, India, Indonesia, Singapore, Thailand, South Korea
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 Economy & FMCG Consumer Retail Channels

Wallet shifts during a pending recession, but FMCG spending is secured

“Strugglers” who splurge: Many feel more spending freedom than ‘Cautious’ consumers
APAC – Spending intentions for next 12 months
net change in spending (pt. change)

Total APAC Strugglers Rebounders Cautious Unchanged Thrivers

Life Expenses
Rent / mortgage, Education, Financial services, Debt,
Utilities, Savings / investments, transportation, +8 +21 -7 -15 +28 +35
childcare

Consumer Goods
Groceries and household items +33 +39 +33 +15 +43 +53

Semi/Durable Goods
Clothing / Apparel, Home improvements / décor, -3 +15 -12 -41 +20 +32
electronics / technology

Food Service
Food delivery/ takeaways, OOH dining/ eating -1 +16 -9 -35 +19 +33

Leisure & Lifestyle

OOH & in-home entertainment, holidays, gym / sports -9 +14 -19 -45 +5 +28
/ club memberships

Source: NielsenIQ 2022 Consumer Outlook Survey, Dec 2022

Change in spending calculated by subtracting % of respondents who are spending less from % of respondents who are spending more
11
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 Economy & FMCG Consumer Retail Channels

APAC remains optimistic consumption outlook vs. the rest of the globe
FMCG positioned well in the region, shifting from other spending intentions
Global vs. APAC – Spending intentions for next 12 months
net change in spending (pt. change)

Global APAC

Utilities 23 31 Fresh produce 35

Groceries and household items 19 33
Home essentials 30
Education - self /children's 18 31
Transport costs 16 27 Health & wellness 29
Rent/ mortgage 13 17 Dairy 28
Childcare 12 26
Fresh meat 26
Paying off debt 10 19
Saving/ Investments 7 28 Packaged groceries 14
Financial services 5 22 Baby products 17
In home entertainment -5 12
Pet products 13
Gym/sports/club memberships -6 9
Holidays – domestic -7 8 Frozen food 13
Electronics/Technology -11 10 Beverages (excl. Alcohol) 15
Holidays – international -12 1
Home improvements/décor Personal & beauty care 15
-15 2
Food delivery/ takeaways -17 6 Prepared food & meal kits 13
Clothing/ Apparel -19 0
Snacks & confectionery 8
Out of home entertainment -22 -2
Out of home dining/ eating -25 -2 Alcohol 2

Source: NielsenIQ 2023 Consumer Outlook Survey, Dec 2022 | Change in spending calculated by subtracting % of respondents who are spending less from % of respondents who are spending more
Home essentials (eg. cleaning, paper, storage, outdoor products)
12
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 Economy & FMCG Consumer Retail Channels

Basket gradually resets, yet Essentials have high contributions vs pre-Covid

Non-essential products still have the growth opportunity after market re-opening
VN – FMCG – Value % Share Val % Growth

2021 vs YA 2022 vs YA Q4'22 vs YA

FMCG -4.8 17.0 22.5

19.8 17.5 20.4 20.3
22.1
Beer -15.5 36.3 64.2

17.9
18.3 18.7 18.6 NA Beverage -6.8 22.1 32.8
19.7

14.0 Cigarette -4.9 16.7 16.7

14.0 14.0 14.0
14.7 2.2
2.3 1.8 1.7 Baby Care -9.3 -6.6 -4.9
1.0
15.4
11.8 14.5 13.7 13.8
Milk Bases 0.8 3.8 6.6

17.7 18.2 19.8 18.7 18.9 Foods 3.6 10.6 13.2

6.4 6.3 6.6 6.5 6.6 Home Care -0.4 16.3 9.9
6.6 6.6 6.6 6.3 6.2
Personal Care -4.6 11.4 4.9
2019 2020 2021 2022 Q4'22

Source: NielsenIQ Retail Audit data ending in Dec’22

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, Milk Powder, Baby Diapers, Facial
Tissue, Tissue (Napkin/Toilet/Kitchen), Candy, Snack, Gum
13
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 Economy & FMCG Consumer Retail Channels

Foods & Dairy is expected central to 2023 consumer spending intentions

However, limited out of home consumption may impact the Horeca’s performance in 2023
APAC – Spending intentions for next 12 months
net change in spending (pt. change)

Top spending less Same as before Top spending more

Paying off Savings / Financial In home
OOH debt Investments services entertainment
33% 42% Utilities
Dinning / Eating
42% 42%
OOH 39% 39% 45% Fresh produce
Entertainment 32%

Grocery & household items

Health &
42% wellness
Clothing /
Apparel 31%
40% Fresh meat
Food delivery /
Takeaways 28%

45%
40% Dairy
Home
improvement / 27%
Decor 41% Transportation

Holidays
international 28% 40% Education

Source: NielsenIQ 2023 Consumer Outlook Survey | Interpreted as: “33% of APAC respondents plan to spend less on Out-of-home (OOH) Dining and Eating”
14
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 Economy & FMCG Consumer Retail Channels

Channel-wise, MT & TT Rural remain as important channels to secure

Besides the gradual OOH-rebound benefits F&B, Recent lay-offs may shift consumption back to Rural
VN – FMCG by channels – Value % SOT % Chg vs YA Business status in 2022 vs YA

124,589 (20.9%) 18,609 (11.2%)

13.2 15.3 16.5 15.7 Enterprises temporarily ceased Dissolution enterprises
20
18.3 15.9 16.9 15.2 15.1 15.6
MT Vietnam
11
6.9 6.2 5.7 6.2 5.2 5.5 6.5 6.5 6.3 65,000+
4.8 Workers are laid-off due to
8.8 4.9 7.4 51 business hardship
14.1 11.8 12.0 9.7 12.7 12.8 12.8
TT On Rural
28 “Factory workers laid off, return
to hometowns as order shortages
persist…to save money”
111
43.0 40.9 TT On Urban
36.3 37.3 39.9 38.3 40.2 37.9 37.8 37.3 60
Service activities in 2022 vs YA
12
TT Off Rural
12
52.5% 271.5%
12
29.5 29.5 29.2 27.8 29.0 30.5 27.7 27.7 27.8 28.0 TT Off Urban
11

Q4'22 2022 Accommodation, F&B Tourism & travelling

Q3'21

Q4'21

Q1'22

Q2'22

Q3'22

Q4'22
2019

2020

2021

2022

services services

Source: GSO, Layoff wave sweeps Vietnam's manufacturing hub as export orders dwindle - VnExpress International
15
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 Economy & FMCG Consumer Retail Channels

In TT, new emerging formats are potential to penetrate & drive growth
Differentiate our brand offerings & assortment across new emerging TT formats
Semi-Retailer – Tiny-but-mighty channel Specialized stores in TT
SR End-consumer – Value % SOT to total VN – 2022 Value % SOT to VN & Value % Chg – 2022 vs YA

Dairy Shop VN
24k Semi-retailer stores (~2% to VN retail stores) +5%

26.6% 28.0%
19.1% +30%
7.3% 8.4%
17.3%
15.5% 15.4% 2021 2022 2021 2022
13.5% Liquid Milk Powder (Infant+ Adult)
12.9%
Milk Powder

TT Pharmacy Urban

+11%
+15%

3.9% 3.9% 4.4% 4.5%

RTDM Beer Biscuit & Home Personal N/A Long Chau Pharmacy tripled
Sponge Care* Care* Beverage 2021 2022 2021 2022 its revenues and open
Cake hundreds of new stores Y-onY
Toothpaste Shampoo Source: VNExpress

Note: Please be noted that this is current Semi Retailer data. The contribution will be higher after enhancement goes live in 2023 | Home Care includes Dishwashing Liquids, Fabric Softener, Laundry Products. Personal Care includes
Personal Wash, Shampoo, and Toothpaste
16
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 Economy & FMCG Consumer Retail Channels

Signs of stabilization in Asian e-commerce in 2022

Symbiotic balancing approach of both online and offline sales is needed
% share of sales – E-commerce Value % Chg vs YA:
+0.0% in MAT O3’22
(+11.8% in MAT Q3’21)

2021 2022 Pt. Change

APAC 19.5%

South Korea 31.9% 35.5% +3.6

Thailand 1.3% 1.9% +0.6

Indonesia 0.8% 1.1% +0.3

India* 2.3% 2.3% 0

China 29.7% 30.4% +0.7

Singapore 14.2% 15.3% +1.1

Source: NielsenIQ RMS and CPS data, total online share of sales by market, Latest 52 weeks ended Sept. 2022 vs. year-ago, * India to Latest 52 weeks ended June 2022
17
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[2]
Signal for TET’23
How are the retailer stock-up & shopping
pattern for TET?

© 2021 Nielsen Consumer LLC. All Rights Reserved.

Earlier TET23 date & post-pandemic effect drive optimistic outlook vs 2022
…with increasing retailer support in Nov-Dec’22 and early uplift in MT during Dec’22
TT VN – Total FMCG VN – Total FMCG
Volume Stock (Mil. KG/L) Volume Sales (Mil. KG/L)

TT VN

700 700

600
600
500

400
500
300
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
400
2020 2021 2022

300 MT VN

150
200 130
110
100 90
70
0 50
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2020 2021 2022 2020 2021 2022

19
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In TT, stronger stock-up signals better TET performance, esp. North & MKD
Non-essential products also have stronger load for upcoming TET’23
TT VN by regions – FMCG TT VN – FMCG by super categories
Stock % Chg (Nov-Dec’22) vs PP Stock % Chg (Nov-Dec’22) vs PP

73
25 Beer
VietNam TT 57
19
17
NAC Beverage
12
27
TT North 9
Cigarette
19 4

17
Regular Foods
29 18 NOV-DEC'22
TT Central
25 33 NOV-DEC'21
Impulse Foods
26

20 4
TT SE Home Care
11
19
4
Personal Care
7
24
TT MKD 9
10 Milk Bases
2

20
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In MT, seasonal categories have double-digit growth in Dec, esp. Beer/Bev
Foods are also prioritized shopping-products in TT during the month
VN by channels – Value % Chg
Dec’22 vs PP

FMCG Beer NAC Foods Home/

Beverage Personal Care
Traditional
Trade +3% +2% +1% +10% +2%

Modern
Trade +13% +52% +18% +14% +8%

21
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Key takeways
2023 Economy & FMCG
Outlook
▪ Vietnam economy records +8.0%
growth in 2022, and is expected to
deliver +6.2% growth in 2023.
▪ Vietnam FMCG records +17% growth
in 2022, with highest uplift in Q3/4. But
the inflationary & household’s financial
pressures will be challenge for 2023
FMCG’s performance.
▪ Amid the wallet’s shifting, consumer
goods are central to APAC consumer
spending intentions. They share more
optimistic outlook vs other regions.
Vietnam Market Report & Marketing Research by CTO Vietnam Network
© 2023 Nielsen Consumer LLC. All Rights Reserved.
Adaptive strategies of
new consumer outlook
▪ Appeal to consumers need for value &
spending shift back to home (i.e.,
Foods and Dairy).
▪ Growth opportunity for Non-essentials
do still exist, but needs to remind
consumers of usage occasions (e.g.,
TET, summer) and new experiences.
▪ Differentiate our brand/ product-value
offerings & assortment across new
emerging TT formats.
▪ Given the omni-shopper trend, the
symbiotic balancing approach of both
online & offline is needed as Ecom has
the sign of stabilization at APAC.
Early signal for TET’23
▪ Earlier TET23 date & post-pandemic
effect drive optimistic outlook vs 2022.
▪ In TT: Witness the strong retailers’
stock-up starting from Nov’22 across
regions, esp. higher level in North &
MKD, & for Non-essential vs TET’22.
Besides, Foods are prioritized
shopping-products in TT during
Dec’22.
▪ In MT: Consumers have already
started shopping for TET during
Dec’22 for all seasonal items, with
highest uplift for Beer/Beverage.
22