Cimigo on Vietnam

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Presentation Content

� 10 Years Rising 5

� Socio Economic Progress 15

� Consumer Mindset 25

� Vietnamese Values 38

� Reaching Consumers 78

� NetCitizens – Vietnam’s Newest Society 92

� Ubiquitous Mobile 100

� Retail Perspectives 103

� Key Consumer Trends 107

10 Years Rising


Traditions and Modernity – Striking The Balance


Fast Shifting Social Trends

“Nowadays freedom is an excuse for doing whatever one wants without thinking about

others; women want careers rather than families, men spend more time out of home, drinking and enjoying with their friends than

contributing to their families, women are freer with their favours and couples find it easier to

divorce without thinking of what they are doing to their families and children…”

Phuong 30 years old, from HCMC


2010: Where Are We Today?

US$79 billion economy 87 million people

45 million Under 30

5 million urban households

3.2 million urban ABC households

1.3 million ABC households

in 6 key cites

5.8 million ABC consumers in 6 Cities

US$740 million 2010 advertising spend

US$902 GDP per person

US$2,500 GDP per person in metros


10 Years Rising

Years Major Events Shaping Vietnam GDP Growth %

2000 Private Enterprise Law / HCMC stock market opens 6.1

2001 US - Vietnam bilateral trade agreement 5.8

2002 Tourism booms - Vietnam A Safe Destination 6.4

2003 Net foreign direct investment US$1.5 billon 6.9

2004 Boosts Trade & FDI – ASEAN Trade Fair, Vietnam Expo 7.8

2005 Exports grow 22% 8.4

2006 Significant investments from Intel and Microsoft 8.2

2007 WTO accession - net foreign direct investment US$22.3 Billon 8.5

2008 Bubble bursts! Stock market demise, high inflation, VND and banking crisis 6.2

2009 Vietnam still grows -whilst most of globe falls into recession 5.3

2010 Vietnam with much of Asia leads the global economic upturn 6.8 Est.


Exponential Growth of Middle Class in Metropolitan Vietnam

In 2010, 64% are middle to upper class

In 2000, 28% were middle to upper class in key cities.

With this comes an onslaught of advertising, a new world of brand choices and the outlets to shop for those brands.

Retail environments that were distant dreams ten ye ars ago.


Wide Disparities in Economic Opportunities

With an annual GDP averaging 7% in the last 10 year s Vietnam is growing rapidly, but the rate varies dramatically b y city and province.

Six key cities account for 40% of the urban populat ion.

Yet urban Vietnam represents just over a quarter of Vietnam’s 87 million people. Reaching the Vietnamese consumer is not always easy.


Youth Translate Consumer World to Parents

60% of Vietnam’s population are under 35.

Changing attitudes leave vast generation gaps where children are far more consumer savvy than their parents.


2000 Rapid Accession to 2010

US$27.5 billion economy


in 6 cites

5.8 million ABC consumers in 6 cities

US$108 million advertising spend


2.6 million ABC consumers in 6 cities


in 6 cites

US$740 million advertising spend

US$79 billion economy


87 million people 78 million people


This Progress Took Decades Elsewhere

2000 2009

TV Set 92% 100%

Cable TV 3% 82%

Mobile phone 20% 69%

Personal computer 14% 47%

Source: Cimigo 15-64 year olds in HCMC and Hanoi

Socio Economic Progress


87 Million Vietnamese

North Mountains and Midlands

Red River Delta

North Central Coast

South Central Coast

South East

Mekong Delta

Central Highlands

54 ethnic groupsKinh account for 88%

Surface area:330,000 km2

GDP/capita:US$902

(2010 Est)

Inflation 8% (2010 Est)

Unemployment 7% (2010 Est)

GDP Growth 6.8% (2010 Est)

Copyright © 2010 Cimigo Download this presentation for free: www.cimigo.vn

87 Million Vietnamese

Population (millions)

19 19 19 18 18 18 17 16

25 25 25 24 24 23 20 19

43 44 46 47 48 50 56 62

45%51% 50% 49% 48% 46%40% 36%

-

10

20

30

4050

60

70

80

90

100

2010 2011 2012 2013 2014 2015 2020 2025

Source: www.global-dem.com

0-14 years

15-29 years

30+ years

% under 30

87 88 89 90 90 91 94 96


7 In 10 Still Rural

15%22%

51%

14% 12%

26%17%

12%

23%

8%4%

7%

6%4%

8%

11%

6%

6%

77% 74%

43%

80% 84%

65%71%

82%

71%

0%

20%

40%

60%

80%

100%

MekongRiver Delta

Red RiverDelta

South East North East NorthCentralCoast

SouthCentralCoast

CentralHighlands

North West Total

Rural Village

Rural Township

Total Urban

22%Total Pop %

19% 17% 14% 13% 9% 4% 2% 100%

Urban rural population profile

Source: GSO


6 in 10 Key Urban Households Now ABC Class

Urban household economic class (N=5,000 6 key cities)

5 8 10

1317

2618

20

2730

30

23

2413

34

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2004 2009

E (Less than US$150)

D (US$150 - US$299)

C (US$300 - US$499)

B (US$500 - US$999)

A (US$1,000+)

Source: Cimigo

Approx. household monthly income


Progressive Psyche Shaped By History

Years Major Events Shaping Vietnam

111BC - 939AD Chinese occupation of Vietnam

1535 European Jesuits and traders

1802 French given trading concessions

1858 France invades Vietnam

1860-1945 French occupation

1940-45 Japanese occupation

1945 Ho Chi Minh declares formation of the Democratic Republic of Vietnam

1945-54 French re-occupation - finally defeated in the battle of Dien Bien Phu

1954 Geneva convention 17th parallel division of Vietnam

1959 US military advisors in South

1965 US Marine Corps lands on China Beach, Da Nang

1973 Singing of Paris peace accord (US and North Vietnam)

1975 Fall of Saigon - Reunification of Vietnam

1977-79 Implementation of unified socialist society

1979 Vietnam defeats Khmer Rouge and liberates Cambodia

1979 China invades Vietnam and is quickly repelled


It Can Only Get Better…Most Vietnamese Only Experience Progression

Years Major Events Shaping Vietnam GDP Growth %

1986 Doi Moi (Renovation) Congress - open door policy reforms 2.3

1987 Foreign investment law liberalises market access 3.6

1988 Extensive agricultural reform 6.0

1990 Vietnam world's 3rd largest exporter of rice 5.1

1991 Ban on TV Advertising lifted 6.0

1994 US embargo lifted 8.8

1995 Vietnam joins ASEAN 9.5

1997 Vietnam world's second largest exporter of rice. 8.8

1999 Asian crisis causes foreign investment to be liberalised 4.7

2000 Private Enterprise Law / HCMC stock market opens 6.1

2001 US - Vietnam bilateral trade agreement 5.8

2003 Net foreign direct investment US$1.5 billon 6.9

2007 WTO accession - net foreign direct investment US$22.3 billon 8.5

2008 Buuble bursts! Stock market demise, hyper inflation, VND and banking crisis 6.2

2009 Vietnam still grows -whilst most of globe falls into recession 5.3

2010 Vietnam with much of Asia leads the global economic upturn 6.8 Est.


US$79 Billion Economy in 2010

GDP per capita

$902

$853

$631

$351 $367 $416$471

$543

$724

$778$818

5.8%

6.4%

6.9%

7.8%

6.8%

5.3%

6.2%

8.5%8.2%8.4%

6.1%

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (Est)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%Per Capita GDP (USD)

GDP Growth (%)


Vietnam Compared With Region

Relative Size Of Total GDP 2008 (Asia)

New Zealand,111

Australia, 813

India,1059

Vietnam,70

Philippines,129

Indonesia,390

China,3613

Thailand,224

Malaysia,161

S Korea, 938

Taiwan, 393

Hong Kong, 209

Singapore, 144

Japan, 4632

-5,000

5,000

15,000

25,000

35,000

45,000

55,000

-1 4 9 14

Poor/Young Old/ Rich

GD

P p

er c

apita

200

8 (U

S$)

The area represents relative size of total GDP in US$ billion Source : Global Demographics Ltd.


Demographics and Economic Development Behind Trends

� Young population profile

� ABC economic class households climbed by over 50% compared with year 2000

– 2.75 million households (12.2 million Vietnamese) are now middleclass and above

– Highest concentration in key cities

� Economic development visible in GDP growth, infrastructure development and residential property boom

– Increasing affluence leads to changes in consumption, lifestylesand marketing scope

� Disposable income and time increasing desire to experience new opportunities

Consumer Mindset


Conservative

About money I think … (N=1,000 aged 15-64 in HCMC and Hanoi)

75

68

42

27

18

26

24

36

26

52

8

6

10

18

32

21

66

46

I am very particular about saving every month

My success is defined by my job

Men should be the sole money provider for the family

Money is the most important thing in life

I don’t like to be around people who show off their wealth

I am financially comfortable

Agree Neutral Disagree

Source: Cimigo


Optimistic

What do people say about…………(N=1,000 aged 15-64 in HCMC & Hanoi)

79

45

35

69

57

46

15

23

22

21

17

28

33

43

9

26

27

6I am optimistic about the future

You can tell a type of person by the clothes they wear

People think you are strange if you express too muchindividuality

I believe my spouse is faithful to me

I don't have any problem with the idea of marrying a foreigner

Life isn't really complete if you don't get married

Agree Neither Disagree

Marriage

Society


Yet Conspicuous

About brand trends I think.. .(N=1,000 aged 15-64 in HCMC & Hanoi)

67

60

47

46

38

33

20

20

30

30

27

32

13

20

23

24

35

35

Mostly prefer to use branded products

I like to be always up-to-date with the latest technologiesand gadgets

I don't buy a new brand until a friend assures me that it isgood

Like to pamper myself with clothes, accessories, personalproducts

Only play (bad) boys and girls wear trendy clothes

I want to be one of the first to have the latest new brand

Agree Neutral Disagree

Source: Cimigo


Rising Affluence – Raising Premium Consumption

Items I own and plan to buy in the next 12 months (N = 1,000 aged 15-64 in HCMC and Hanoi)

3

70

9

69 73

42

2415

4

21

5

8

10

14

620

Motorbike Mobile phone Line telephone Flat screen TV Digital camera PDA Video camera A car

Intend to Buy

Currently Own

Source: Cimigo


Increasingly Financially Savvy

Current and potential bank account ownership(N=2,926 aged 18-54 in HCMC & Hanoi-Q3/ 2009)

3432

40

56

49

38

25

20

44

37

27

7 7 7 6 7 86

11 11

25

Total HCMC Hanoi A B C D 18-24 25-34 35-44 45-54

Have a bank account Planning to open an account

Source: Cimigo

Source: Cimigo Financial Services Monitor

City SEC Age group


Yet Cautious

Perceived need for selected financial services(N=5,244 current and potential bank account users i n HCMC & Hanoi)

84

73

50

45

37

29

24

23

15

21

34

36

37

34

31

31

6

16

19

26

37

45

46

1A bank account in local

currency

A term deposit account inlocal currency

A bank account in foreigncurrency

A term deposit account inforeign currency

Life insurance

A loan from a financialinstitution

A credit card

A debit card

Necessary Neither Unnecessary

Source: Cimigo Fiancial Services Monitor


And Risk Averse

Perceived riskiness of personal financial activitie s(N=5,517 aged 18-54 in HCMC & Hanoi)

87

81

64

53

53

46

40

39

32

10

12

15

29

32

35

35

34

42

29

18

4

7

15

12

19

26

19

39

72

1Saving money in local currency

Storing money at a bank

Saving money in foreign currency

Storing money at home in cash

Paying for goods using cash exclusively

Paying for goods using a credit card

Getting a loan from a financial institution

Getting a loan from a family member or friend

Buying gold

Buying stocks

Safe Neither Risky

Source: Cimigo Financial Services Monitor


I Groom With…

I groom with...(N=1,000 aged 15-64 in HCMC & Hanoi)

49

39

36

20

6

3

81

42

53

41

43

32

Shower gel \ cream

Mouthwash

Under arm deodorant

Perfume

Facial moisturiser

Hand and body lotion

Male

Female

Source: Cimigo


I Enjoy A Glass Of…

Beverages consumption - past 24Hrs(N=1,000 aged 15-64 in HCMC & Hanoi)

46

55

22

29 28 30

24 25 2323 25

201921

14

1920

14

1820

13

1720

913

10

22

1315

8

12 11

16

12 13

98 710

85

16

7 7 7

Total HCMC HanoiCoffee Tea Ready to Drink MilkBottled water Soya Milk Fruit JuiceCarbonated Soft Drink Sweetened Condensed Milk BeerHealth Drink Drinking Yogurt Energy DrinkMilk Powder Spirits\Liquor Cereal Drink

Source: Cimigo


Trends Impact on Consumption

� The Vietnamese are extraordinarily optimistic!– Few have experienced a step back and the majority grew up post war

� Metro consumers increasingly technology and financial savvy

� Conspicuous consumption visible and acceptable

� Success is imbued in pride which has to be visual or verbalised to be recognised;

– For example housewives focusing on self development to enable better care of family is now acceptable

� Individual expression through brand ‘badges’ now accepted– The brands I wear reflect who I am is now a prevalent attitude

� Youth translate the consumer world for their parents - they are more consumer and ad savvy

– And parents increasingly brand conscious– Pester power from kids increasing beyond kid’s brands


Affluence Impacting Lifestyles

� Increase health awareness– Greater focus on better nutrition– food and beverages– Focus beyond physical to include mental development – Annual check ups– Fitness and gym use– Demand for improved private healthcare

• Awareness assisted by bird flu, SARS and H1N1

� Increase in education demands – Enrolment of dependents in foreign language schools– Demand for private kindergarten, secondary schools and universities– Increased propensity to send children overseas for University education

� Increased international awareness– Increased travel demand largely within SEA region


Trends Impacting Technology And Finance

� Consumers are increasingly tech savvy– Internet penetration and speed– PC penetration rapid increase– Frequent use of SMS

� Consumers begin planning finances– Finances move beyond living expenditure to investments– Savings and plans evolve around own home property demands – Banking, private insurance, ATM services escalate

Vietnamese Values

The Family Nguyen

How This Shapes Who We Are

40

The Family Nguyen - How This Shapes Who We Are

Youth translate the

consumer world for their

parents

Progressiveand

entrepreneurial

Happiness is money

Confused and frustratedDesperate to

express myself

Thirst for edutainment

Success is imbued in

pride

Success through the eyes of my

child

41


Youth translate the


parents

Progressiveand

entrepreneurial

Happiness is money


express myself



pride


child

42

Core Ethos – Keeping Up With The Nguyen’s

Hope to be very successful in the

shortest time possible!

43

Everyone Wants to Be Their Own Boss - Big Or Small!

44

Everyone Is So Busy Getting Ahead

45


Youth translate the


parents

Progressiveand

entrepreneurial

Happiness is money


express myself



pride


child

46

Money (and Quickly) Makes You Happy

� Many consumers know what it is truly like to be hungry– Too wrap your feet in newspaper during winter, to lay husk to

sleep on to keep warm, to the relish of having meat at TET

� Society has come a long way. The rapid accession has polarised focus on getting ahead by getting rich very fast.

� Incredible naivety exists amongst youth today about to enter the work force regarding their prospects in society. Whilst endearing they are headed into a horrible reality check.

� That $$$ makes you happy is a value or aspiration being instilled in children. The need for making social statements of status via brands has only just begun.

47

Money (and Quickly) Makes You Happy

7 in 10 believe my success is

defined by my job

Only 3 in 10 like to avoid people who

show of their wealth

Nearly 50% believe money

is the most important thing

in my life

48


Youth translate the


parents

Progressiveand

entrepreneurial

Happiness is money


express myself



pride


child

49

Success is Imbued in Pride

� Fortunately for marketers, success is imbued in pride (commonly referred to as ‘face’) which has to be visual to be recognised. This leads to considerable conspicuous consumption.

2/3 Prefer branded products

6 in 10 I like to have the most up to

date gadgets

1/3 Like to buy new

brands as soon as they are launched

50

My Face : My Home - Demonstrates Purchase Priorities

51


Youth translate the


parents

Progressiveand

entrepreneurial

Happiness is money


express myself



pride


child

52

My Missed Opportunities Are His to Take

Through the yes of my child I shall achieve success

His success is my success

He reflects on me

53


Youth translate the


parents

Progressiveand

entrepreneurial

Happiness is money


express myself



pride


child

54

The Nguyen’s Live in Two Worlds Today

Traditional Rural Vietnam Modern Asia

55

Youth Translate Consumer World to Parents

Half of Vietnam’s population are under 30.

Changing attitudes leave vast generation gaps where children are far more consumer savvy

than their parents.

56

A Look Ahead - Kids Are Very Savvy Consumers

� Kids (5-14) accounting for more than 15% of the population.

� Kids are brand and ad savvy –more so than their parents. They are bringing consumer news to the family.

� First generation born in a true market economy – exposed to brands and advertising since they were born.

� In many aspects kids are recognised as knowing more than their parents (e.g. brands, technology, ads).

� Due to the broader exposure as kids, they are quicker in decoding subtle messages and are amongst the highest group on the ad savvy continuum.

� Kids exhibit considerable pester power in many categories beyondthose targeting kids.

57

Generation Gap Widens Dramatically!

They DonThey Don’’t Know How to Listen to One Anothert Know How to Listen to One Another

No role modelsConfused parentingDifferent value appreciationInfluence from peer group

Too fast for me to catch upToo complicated to understand

Too busy to understandToo little time to earn money

The Young Ones The Old Ones

58


Youth translate the


parents

Progressiveand

entrepreneurial

Happiness is money


express myself



pride


child

59

Thirst for Edutainment

� Rising disposable incomes create an increasing desire to experience new opportunities.

� They really want knowledge, information and experiences

� They want to succeed, to develop, to catch up with not only the Nguyen’s next door but also the Thais in Bangkok and the Chinese in Singapore.

� They have an appetite for edutainment – will invest time and money in feeding the appetite. In doing so they open up a world of opportunities for you (the audience).

� Edutainment is the path to progress.

60

Thirst for Edutainment

� Cable TV almost universal in metropolitan cities

� Local sites win with the highest penetration for Edutainment (news, entertainment, blogging, games, music) whereas global sites win: Google for search and Yahoo! for communications, chatting and blogging.

61


Youth translate the


parents

Progressiveand

entrepreneurial

Happiness is money


express myself



pride


child

62

Traditional Outlet for Expression of National Pride

� An outlet for expression

� An outlet for Nationalism

� Everybody gets involved - old, young, men, women, grandma -everyone


Today’s Medium For Self Expression - Blogs

63

Source: NetCitizens down load at www.cimigo.vn

64


Youth translate the


parents

Progressiveand

entrepreneurial

Happiness is money

Desperate to express myself



pride


child

Confused and frustrated

65

Increasingly Aware of What Could Be……

Increasing Increasing opportunities opportunities

(Commercial & (Commercial & education) for womeneducation) for women

Always out of home / Always out of home / hardly stay in homehardly stay in home

Thirst for Thirst for EdutainmentEdutainment

Increasing Increasing opportunity for opportunity for outbound traveloutbound travel

More socializing out More socializing out of home, drinking, of home, drinking,

cafcaf éé, etc, etc

More international More international standard educationstandard education

66

Heaviest Toll On Family – Conflict With Traditional Values

From extended to From extended to nuclear familiesnuclear families

From community to From community to individual needsindividual needs ’’

satisfactionsatisfaction

Modern day working Modern day working ethos and ethos and

requirements requirements

Emerging gender Emerging gender equality & changing equality & changing

roles in society roles in society

Divorce acceptableDivorce acceptable

Change in parenting Change in parenting PrePre--marital sex marital sex the normthe norm

Materialism critical Materialism critical

Happiness defined as Happiness defined as moneymoney

67

Challenging the Core of Vietnamese Motivations

Very fast changes in every aspect of life, most excited / most heady / most naive

Homebound with chores, looking

at the changes from the outside

Born freegrowing with wings

outspread, Too fast? Too early?

Changing the mostAt work but also what

he can expect from home changing

radically

68

It’s Just A Chain Reaction – Changing Values

Mum

Dad

Family

Family

Family

ParalysisParalysis

65% not even hanging out with family

once a week!

69

Not All Upbeat About Changing Society

Least Upbeat

Confused

Most Upbeat

Few Pre-teens

Few Teenagers

Many Older Housewives

Very few Young Adults

Some Older Housewives

Pre-teens from broken

homes

Many adult men

Many Pre-teens

Many Teenagers

Many Young AdultsEspecially women

Confident

70

Consumer Paralysis At Failure to Self Acutualise

� Great expectations but not delivered

� Parents are at home less and less for family

� Adults feel confused by lack of awareness and knowledge– Men struggling with greater equality– Women desperate for recognition and self worth

� Young adults disappointed and frustrated with perceived failure to self-actualise

� Teenagers live through ‘screens’ and have no role models

� Pre-teens desperate for parental attention and affection

71

Preteen Seek Attention and Affection: 11 Year Old in Hanoi

“I wish we could spend more time together as a family. Either my mother or my father or both are

never there”

72

Consumer Paralysis At Failure to Self Acutualise

� Great expectations but not delivered

� Parents are at home less and less for family

� Adults feel confused by lack of awareness and knowledge– Men struggling with greater equality– Women desperate for recognition and self worth

� Young adults disappointed and frustrated with perceived failure to self-actualise

� Teenagers live through ‘screens’ and have no role models

� Pre-teens desperate for parental attention and affection

Brands Offer SolutionsBrands Offer SolutionsCoping StrategiesCoping Strategies

73


Youth translate the


parents

Progressiveand

entrepreneurial

Happiness is money


express myself



pride


child

AfflunenzaAfflunenza

74


Youth translate the


parents

Progressiveand

entrepreneurial

Happiness is money


express myself



pride


child

Brands Offer SolutionsBrands Offer SolutionsCoping StrategiesCoping Strategies

75

Guiding Consumer Progress

Strong and sensitive male character, not afraid to give a

woman more than what he gets in return

Father as role model: spending time with

his kids

Guidance for coping with demands of work and progress at home

Encouraging parental emotional displays of

affection

76

Closing the Generation Gap!

Rebuilding BridgesRebuilding Bridges

No role modelsConfused parentingDifferent value appreciationInfluence from peer group

Too fast for me to catch upToo complicated to understand

Too busy to understandToo little time to earn money

The Young Ones The Old Ones

77

Guiding Consumer Progress

Interactive guidance and entertainment

Women crave self worth; need to be shown the

modern way to be giving without losing their own

identity.

An older sibling setting an example of

being ‘with it’ in today’s world

Men need to be shown the modern way to be strong - traits such as flexibility, sensitivity,

understanding yet very successful

Reaching Consumers


TV Is King – Internet Is Rising

I learn about the brands/ trends from...(N=1,000 aged 15-64 in HCMC & Hanoi)

94

76

71

58

53

52

44

70

86

51

54

43

32

15

Advertising on TV

Read about it inmagazine

From chatting with friends

Browsing at shoppingcenter

In store promotion

See other people with anew brand

Suff the Internet

2009

2006

Source: Cimigo


Key Media

Televison Daily NewspaperVTV3 Tuoi TreVTV1 Cong An HCMCHTV7 Thanh Nien

Source: Mindshare Source: Mindshare

Magazines Vietnamese WebsitesTiep Thi & Gia Dinh Google

The Gioi Phu Nu ZingHoa Hoc Tro Yahoo!

Source: Mindshare Source: Cimigo NetCitizens


Media Perspective

� Over 50% of TV advertising spend is with two channels VTV3 and HTV7

� 1 GRP on TV currently costs US$230.

� Programming barter arrangements. Production companies own as much as 50% of available spots.

– BHD– Lasta– VAC

� Imported programming accounts for 25% of air time; HK, Korea, China and Taiwan.

� The top 20 print titles account for 80% of print advertising expenditure. The top five account for over 40%.

Terrestrial Channels 65National Channels 4

Digital Cable Channels 72Digital Terrestrial TV 42Digital Sateliitte TV 21

Vietnam Television VTVHo Chi Minh Television HTV

Long An Television LATVVinh Long Television THVL

Binh Duong Television BTVLiteracy 96%

Web Sites 18-24 year oldsGoogle 31%

Zing 25%Yahoo! 25%

Web Sites 25-64 year oldsGoogle 34%

Tuoi Tre 24%VN Express 20%

Cinemas 57

National Channels 1Regional Channels 61

Tuoi Tre

Tiep Thi & Gia DinhThanh Nien

The Gioi Phu Nu

Cong An HCMC

Share of Ad Ex

Key Publications

TV Channels

Radio Stations


TV Remains King – Online Fast Growth

2009 Media Spend Grew 33% to US$706 Million

556,000,000

83,250,00049,200,000

15,500,000 2,100,000

8%

60%

17%

0%

43%

-

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

TV Newspapers Magazines Internet Radio

Source: Kantar Media. Cimgon Online Revenues

-10%

0%

10%

20%

30%

40%

50%

60%

70%

2009 Spend US$

Annual Growth %


Cable TV Prolific - As Cable Is So Inexpensive

Operator Installation Monthly

Subscription Channel Package

VCTV $17.2 $3.9 45SCTV $8.9 $2.6 72HCTV $17.8 $3.9 49

VTC $95.0 $0.0 42

VTV $160.2 $2.4 21

SCTV $44.5 $3.9 16

FPT $89.0 $0.0 45IPTV

Digital Terrestrial TV

Digital Cable TV

Digital Sateliite TV

MMDS

Platform Free or PaySubscription

Based Provider ExamplesTerrestrial TV Free to Air No VTV, HTVDigital Terrestrial TV Pay No VTCDigital Cable TV Pay Yes SCTV, HCTV, VCTV, HTVCMMDS Pay Yes SCTV, VCTVDigital Satellite TV Pay Yes VTV Internet Protocol TV Pay No FPT, VietTel, VTC


TV Advertising Demands Attention

How I feel about TV advertising...(N=1,000 aged 15-64 in HCMC & Hanoi)

34

26

13

28

I find a lot of TV advertising is devious

Nearly all TV advertising annoys me

Quite often I find the TV advertising moreentertaining than the programmes

I find TV advertising interesting and quite oftengives me something to talk about

Source: Cimigo

41%

59%


Engaging Viewers is Essential

How people react during advertising break...(N=1,000 aged 15-64 in HCMC & Hanoi)

21

13

7

4

3

4

11

37

Nothing - I just watch as usual

I only watch the ads that are interesting to me

I watch the whole advertising break with little or no interest

I watch the first advertisement, then do something else

I watch the whole advertising break with interest

I leave the room to do something else

I stay in the room but do something else until after the ads

I switch channels to see what else is on

Source: Cimigo


Trends Impacting Media and Mediums

� On line! On line! On line! On line!

� Cable TV near universal

� Access to international channels with Vietnamese

� Movie rental heavily impacts viewing

� Blatant branding of game shows

� Increase number of interactive game shows

� Increase number of ‘slice of life’ drama series depicting reality not fantasy

� Increased cinema going

� Electronic games dominate youth activity

Two Thirds of TV Ad Spend Advertises the Category - Not the Brand

Cimigo should know we track over 400 brands and their communications in Vietnam

2/3 Advertise the Category

That is US$488 Million in 2010

Only 1/3 Advertise the Brand


Decoding Advertising – Who Are You Talking To?

1 Straight SellProduct Attributes

Super Consumers

Rural/Blue Collar Housewives

Blue Collar Adult Male

-White Collar Adult Male

Naïve Consumer

Low competition

High competitionTeens

-Urban/White Collar Housewives

Metro Teens

Teens, kids and white-collars are the most literate in terms

of ad savvy

2 Hard SellComparative Attributes

3 EndorsementFunctional Benefits

4 MetaphorConsumer Benefits

5 LifestyleFunctional + Psychosocial Benefits

6 SymbolicAbstract Values

7 DeconstructedAdvertising Itself

Kids

Metro Trendsetters


Keep It Really Simple – Focus on One Message!

Reason To Believe

Functional Benefit

Customer Benefit

Emotional Benefit


Trends in Communications

� Advertising now dominated with lifestyle advertising.

� Consumer testimonials in advertising replace international superstar endorsements.

� Local brands matching international brands on price (or vice versa!) and close behind in terms of marketing savvy.

� Cutting through the clutter is extremely hard leading to significant waste in advertising expenditures.

� US$488 million is spent advertising the category and not the brand.


A Look Ahead - Youth Are Very Savvy Consumers

� Youth are brand and ad savvy – often more so than their parents. They are bringing consumer news to the family.

� First generation born in a true market economy – exposed to brands and advertising since they were born.

� In many aspects kids are recognised as knowing more than their parents (e.g. brands, technology, ads).

� Due to the broader exposure as kids, they are quicker in decoding subtle messages and are amongst the highest group on the ad savvy continuum.

� Kids exhibit considerable pester power in many categories beyondthose targeting kids.

NetCitizens – Vietnam’s Newest Society


Online Explosion

94


5 in 10 Now Online

I surf the internet...(N=1,000 aged 15-64 in HCMC & Hanoi)

49 5345 47

58

86

56

30 26

33

3 2

4

5

3

13

48 52 5239

8

41

68 72

45

0

10

20

30

40

50

60

70

80

90

100

Total Male Female HCMC Ha Noi 15-24 25-34 35-49 50-64

Never

Less often thanonce a week

At least once aweek

Source: Cimigo


News Sites Most Penetration For 25-64 Year Olds

1010

99

8877

6655

44

33

22

11

Website Total 15-24 25-34 35-49 50-64

Google 46% 53% 45% 39% 34%

Zing 26% 44% 18% 9% 5%

Yahoo 23% 25% 25% 18% 14%

Dantri 19% 15% 24% 20% 20%

VnExpress.net 17% 11% 26% 14% 8%

Tuoitre.com.vn 16% 10% 19% 20% 34%

Nhaccuatui.com 11% 17% 9% 4% 4%

24h.com.vn 11% 11% 13% 9% 5%

Thanhnien.com.vn 9% 4% 11% 12% 21%

Facebook 8% 13% 7% 1% 0%

Source: Cimigo NetCitizens www.cimigo.vn

Most Popular Sites?

Local Sites WinLocal Sites WinEdutainment

(news, entertainment, games, music)

Global Sites WinGlobal Sites WinSearch

Communications


Traditional Outlet for Expression of National Pride

� An outlet for expression

� An outlet for Nationalism

� Everybody gets involved -old, young, men, women, grandma - everyone


Today’s Medium For Self Expression - Blogs

99

Source: NetCitizens down load at www.cimigo.vn


Engagement Online Not Yet There

How I feel about TV advertising...(N=1,000 aged 15-64 in HCMC & Hanoi)

34

26

13

28

I find a lot of TV advertising is devious

Nearly all TV advertising annoys me

Quite often I find the TV advertising moreentertaining than the programmes

I find TV advertising interesting and quite oftengives me something to talk about

Source: Cimigo

41%

59%

How I feel about online advertising...(N=1,000 aged 15-64 in HCMC & Hanoi)

9

35

30

10

16

I find some of them quite entertaining

I have occasionally clicked on those ofinterest to me

I don't really notice them

I find them very intrusive\irritating

I totally ignore them

Source: Cimigo

44%

56%

Ubiquitous Mobile


The Ubiquitous Mobile Phone

Mobile phone usage in HCMC & Hanoi(N=1,000 aged 15-64 in HCMC & Hanoi)

6976 79

64

46

8580

51

9

11 4

13

7

45

14

2313 17

23

47

11 16

35

0

10

20

30

40

50

60

70

80

90

100

Total 15-24 25-34 35-49 50-64 AB C DE

Don't intend tobuy soon

Intend to buyin next 3months

Current users

Source: Cimigo


Beyond The Talk

On my mobile phone I...(N=790 mobile phone users aged 15-64 in HCMC & Hano i)

97

7164

54

38

19 16

100

8378 79

51

2520

Send/receiveSMS

Downloadringtones

Take photos Play games Listen toradio/music

Surf the internet Check email

Total

15-25

Source: Cimigo

Retail Perspectives


Retail Perspectives

Modern trade is growing exponentially in sales and in 2009 accounts for and estimated

20% of retail sales and as much as 35% in some categories.

Cimigo expects the modern trade to account for nearly 40% of retail sales in 2010.


Modern Trade Influential

� With wet markets still a part of daily life, presence in this outlet is essential for salience. Shoppers typically visits the market in the morning before work and as such has limited time for involved marketing activities such as sampling and detailed product explanations.

� Consumers mindset favours supermarkets as the outlet of the future. Despite the fact that they currently account for approximately 20% of grocery sales today they require more attention. Small in numbers but modern trade (self service) outlets have grown in number;

– 127 Supermarket / Hypermarket– 9 Cash and carry wholesalers– 150 Smaller self service outlets

� Shoppers visit the supermarket less often than other channels, however, they have more time when shopping here. This extended shopping time means more opportunities to attract her attention.

� Supermarkets are both a source of information and entertainment.


Trends Impact on Retail Environment

� Modern trade contributions growing exponentially

� Clearly the shopping environment of choice

� Department stores, cash and carry, fast food environments proliferate

� Consumer increasingly entertain out of home

� Outlets steadily increase to meet demand for up-scale premium environments

Key Consumer Trends


Key Consumer Trends

1. Disposable income and time increasing desire to experience new opportunities

2. Affluenza leads to paralysis – brands can provide coping strategies

3. The Vietnamese are extraordinarily optimistic!– Few have experienced a step back and the majority grew up post war

4. Success is imbued in pride which has to be visual or verbalised to be recognised

5. Youth translate the consumer world for their parents - they are more consumer and ad savvy

6. Metro consumers increasingly technology and financial savvy

7. NetCitizens are Vietnam’s newest society

8. Modern trade FMCG contributions growing exponentially

9. Marketers increasingly seek to access rural markets

10. Marketers increasingly fragment markets

7 Critical Success Factors


7 Considerations Critical to Your Success

1. Avoid the hype and truly understand your market size. It is not 87 million consumers! There are 5 million urban households, 2.7 million of those are in the urban consuming (upper-middle class) which translates to 12.2 million people, who are widely dispersed.

2. Have a long term perspective. Longevity requires wisdom (from you) and deserves respect (to your consumer). Understand the Vietnamese and their needs and then understand the regional differences.

3. Provide products to suit not only the senses but also the pocket. Price sensitivity runs high however the actual cash outlay is critical. Consider small pack sizes and cheaper pack formats.


7 Considerations Critical to Your Success

4. Ensure wide availability and coverage to maximise your opportunities to sell. Successful companies in Vietnam have achieved very strong distribution and channel management.

5. Focus resources and do not dilute them across irrelevant line extensions suitable for developed (highly segmented) markets. Vietnam remains a developing market.

6. Do not under estimate the local competition; they caught up about three years ago! The marketing successes in recent years that have resulted in significant re-shaping of their respective categories; have been driven by local companies.

7. Looking to partner locally? Key local companies do not need your money. Vietnam is awash with money. Expertise, technology and experience count!

Cimigo on Vietnam

9 Nguyen Huu Canh Street, Binh Thanh District, HCMC, Vietnam

T: (84) 8 3822 7727

E: [email protected]

W: www.cimigo.vn

Cimigo on Vietnam - thanhs.com.vn

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