REBOUND RURAL THE PROMISING LAND - nielsen.com · - fish scandal . Industrial 4 INDUSTRIAL SECTOR...
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MARKET PULSE Q3’16 Prepared by Nielsen Vietnam December 2016 REBOUND RURAL THE PROMISING LAND
Transcript of REBOUND RURAL THE PROMISING LAND - nielsen.com · - fish scandal . Industrial 4 INDUSTRIAL SECTOR...
MARKET PULSE Q3’16
Prepared by Nielsen Vietnam December 2016
REBOUND RURAL THE PROMISING LAND
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DESPITE EXPANDING IN Q3’16, SOFTER MOMENTUM THAN LAST YEAR WITH CHALLENGES AHEAD
6.7 5.9 6.1 6.5 6.8 7.0
5.5 5.8 6.4
GDP GROWTH YA
6.7% 6.3-6.5%
Set at beginning of year
Revised
GDP GROWTH TARGET
CPI SPEEDING UP
+2.1% YTD’16 vs. YA
0.6 1.3
1.7 2.1
2015 YTD Mar16
YTD Jun16 YTD Sep16
KEY DRIVERS: CPI GROWTH YA
Healthcare
Education
Foodstuff
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2.6
-1.3
0.7 2.3
-2.5
0.1
-4
-2
0
2
4
6
8
10
Agri-Forestry & Fishery Agriculture
Forestry Fishery
AGRICULTURE IS RECOVERING AFTER WEATHER/SCANDAL IMPACT, BUT QUITE STRUGGLING Rice export value still declines versus last year
Source: General Statistics Office, Ministry of Agriculture and Rural Development (Sep’16 Report)
Production Value % Growth YA
38
-34 -24
RICE
3
35 33
COFFEE
-4 -13
15
Q1'16 Q2'16 Q3'16
RUBBER
Export Value % Growth YA | Key Agricultural Output Cold winter – drought
– saltwater intrusion - fish scandal
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INDUSTRIAL SECTOR FACING CONTRACTION BUT HEADING TOWARDS SUSTAINABILITY As it’s becoming less dependent on the exploitation of natural resources
Source: General Statistics Office, Ministry of Industry and Trade
7.4
-4.1
10.4
Industrial
Mining
Processing & Manufacturing
Index of Industrial Production – Growth YA
MINING
Driven by: • OIL - ↓ price • COAL – competition
with imported coal
35% EXPORT VALUE
vs. YA for Minerals, dragging Total Export
PROCESSING & MANUFACTURING • Good consumption rate, esp. for electronics,
computers (↑16%) & vehicles (↑19%) • ↑ PMI can be leading indicator for manufacturing ↑
in the future
7
12
17
22
45
50
55
Jan
15
Mar
15
May
15
Jul1
5
Sep
15
No
v15
Jan
16
Mar
16
May
16
Jul1
6
Sep
16
PMI
Processing &Manufacturing YTD vs YA
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CONSUMERS ARE STILL ASSURED, AND RETAILERS’ CONFIDENCE RECOVERS AFTER TUMBLING IN LAST QUARTER
Source: Nielsen Global Survey Consumer Confidence Section (Q3’16), Retailer Sentiment Report Q3’16
72 76 75 75 68 74
Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16
RETAILER CONFIDENCE INDEX (RCI)
Retailer Confidence Index Calculation • State of retail industry • State of retailer’s own business • Stocking intention in the next 12Ms
104 105 108 109 107 107
Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16
CONSUMER CONFIDENCE INDEX (CCI)
Consumer Confidence Index Calculation • 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
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HOWEVER, FUTURE SENTIMENT LOOKS MORE CONCERNED For the first time, concern about Job Security reaches nearly half
Source: Nielsen Global Survey Consumer Confidence Section (Q3’16)
TOP CONCERNS IN VIETNAM
OTHER CONCERNS Q3’16 vs. Q2’16
Health 34% +2
Work/life balance 25% +4
State of economy 18% -8
+18 +14
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1.3% 0.9% 0.9% 0.9%
1.4% 0.6% 0.9% 0.9% 0.8% 0.6%
1.1% 0.8%
1.5%
3.9%
2.6%
3.5%
0.7%
3.7%
0.6%
3.8% 4.6%
2.3%
5.2%
3.5%
2.8%
4.8%
3.6%
4.5%
2.0%
4.3%
1.5%
4.7%
5.4%
2.9%
6.3%
4.3%
0%
1%
2%
3%
4%
5%
6%
7%
Unit value change Volume change Nominal value growth
DESPITE VOLATILITY, GROWTH MOMENTUM IN KEY CITIES STILL MAINTAINS
Source: Nielsen Retail Index – Versus year ago
Fast Moving Consumer Goods dynamics - Total 6 cities
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Super Category Contribution and Growth - Total 6 Cities
FOOD CONTINUES RECOVERY WHILE BEVERAGE SLOWS DOWN MODERATELY
Source: Nielsen Retail Index – Versus year ago; % is value contribution to Total FMCG MAT TY
-4.9%
5.6%
-1.9% -0.9%
0.7%
-3.5%
4.7%
7.8%
10.4%
7.0%
10.2% 9.4% 8.9% 9.2%
4.7%
-2.3% -2.9%
3.0% 3.0% 1.7%
4.0%
1.3%
BEVERAGE FOOD MILK BASED
41% 15% 15%
Unit Value Change Volume Change Nominal Value Growth
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RECOVERY IS ALSO SEEN IN NON-FOOD, WHILE BABY CARE IS BACK TO DECLINE
Source: Nielsen Retail Index – Versus year ago; % is value contribution to Total FMCG MAT TY
-0.7%
3.9%
0.4%
-0.5%
6.1%
-1.5%
4.6%
8.2%
3.8%
7.5%
2.3%
-0.1% -0.8%
-5.6%
2.2% 3.9%
-4.8%
-3.5% -2.8%
3.1%
6.4%
4.6%
8.1%
5.1%
-10.1%
-11.5%
-6.0%
3.3% 2.7%
-4.7% -4.1%
-12.1%
HOME CARE PERSONAL CARE CIGARETTE BABY CARE
6% 8% 13% 3%
Super Category Contribution and Growth - Total 6 Cities
Unit Value Change Volume Change Nominal Value Growth
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4.1% 3.4% 3.8%
3.0%
5.0% 4.7%
2.1%
Remaining Urban
Nominal value growth
Fast Moving Consumer Goods dynamics – 6 CTs, Remaining Urban vs Rural
Source: Nielsen Retail Index – Versus year ago Note: 6CTs includes full FMCG categories; Remaining Urban & Rural only includes Feminine Protection, Hair Conditioner, Shampoo, Toothpaste, Toothbrush, Personal Wash, Dishwashing Liquids, Fabric Softener, Laundry Products, Household Insecticide,, Household Cleaners, Bouillon-MSG, Instant Noodles, Biscuits & Pie, Beer, Soft Drink, Packaged Water, Energy Drink, RTDT, Cigarette, Sport Drink, Coffee, Fruit Juice, RTDM, Sweet Condensed Milk. Value contribution is based on 25 categories.
HOWEVER, FMCG PICTURE SEEMS MORE SLUGGISH OUTSIDE KEY CITIES, ESPECIALLY IN RURAL
5.5%
5.8% 6.3%
4.6%
2.9%
9.2%
1.5%
Total Rural
2.8%
4.8%
3.6% 4.5%
2.0%
4.7% 4.3%
6 CTs 37% 12% 51%
Value Contribution
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9% 8%
4%
10% 9%
1%
2015 H1 2016 Q3 2016
0% 0%
7% 7%
3%
-0%
2015 H1 2016 Q3 2016
0%
3% 2%
4%
0%
-1% 2015 H1 2016 Q3 2016
2% 1%
5%
2%
7% 7%
2015 H1 2016 Q3 2016
1% 1%
7%
6%
2% 0%
2015 H1 2016 Q3 2016
BEVERAGE | 48% FOOD | 64%
CIGARETTE | 53% PERSONAL CARE | 48% HOME CARE | 56%
Nominal growth vs YA – Urban vs Rural – By super groups
Urban Rural
SLOWDOWN STARTS FROM Q3’16 AND IS SEEN ACROSS SUPER GROUPS
#: Rural value % contribution to each super group
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BUT RURAL POTENTIAL IN LONG-TERM IS STILL THERE
Val Growth MAT TY vs YA
Rural Urban
SIGNIFICANT > = 5% 16(*) 8(**)
MODERATE > = 3% and <= 4% 0 7
MAINTAIN > = -2% and <= 2% 7 8
DECLINING < = -3% 1 1
16/24 CATEGORIES GROW SIGNIFICANTLY IN RURAL
8/24 CATEGORIES GROW SIGNIFICANTLY IN URBAN
VS
Number of categories in each group
(*) 16 categories contribute 75% of FMCG value in MAT TY in Rural
(**) 8 categories contribute 60% of FMCG value in MAT TY in Urban (36CTs)
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SINCE 2014, RURAL IMPORTANCE IS INCREASING ACROSS CATEGORIES
+/- Val Contribution of Rural – YTD Sep’16 vs 2014
BEVERAGE FOOD MILK BASED PERSONAL CARE HOME CARE CIGARETTE
EXAMPLE FOR CATEGORY X
Rural Val contribution in 2014
Rural Val contribution in YTD’16
+/- Rural Val contribution
(A) (B) = (B) – (A)
49 51 +2
-1.6 -0.8
-0.2
0.0 0.1 0.2 0.3 0.3 0.3 0.8 0.8 0.9 1.3 1.3 1.4 1.5 1.7 2.0 2.3 2.5 2.5 2.8 2.9 3.0
5.0
6.9
10.1
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PREMIUMIZATION BIG PACK
TRENDS SETTING IN RURAL
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PREMIUM PRODUCTS ARE HAVING MORE SPACE ON THE SHELVES, EVEN RURAL
45%
9%
46%
DRIVER OF PREMIUM GROWTH
RURAL
6 CTs
REMAINING URBAN RURAL
REMAINING URBAN
6 CTs
SHARE GROWTH
37%
40%
42%
30%
31%
33%
26%
27%
29%
12%
13%
8%
9%
11%
14%
PREMIUM SEGMENT
Growth of Premium in Nationwide | MAT TY vs. LY
MAT TY
MAT LY
MAT 2YA
MAT TY vs. LY
MAT LY Vs. 2YA
PREMIUMIZATION BIG PACK
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< 30% > 50% 30% – 50%
POTENTIAL FOR PREMIUM CATEGORIES TO GROW FURTHER IN RURAL
FAMILIAR BRANDS
New experiences, new offerings
PREMIUM BRANDS
“I can’t afford the premium brands”
“I want to reward myself”
Packaged Water, Energy Drinks, Hair Conditioner, Toothpaste, Toothbrush, Shampoo, MSG-Bouillon
Sport Drinks, RTD Tea, Fruit Juice, RTD Milk, Cigarette, Household Cleaner, Laundry Products, Dishwashing Liquids, Fabric Softener, Household Insecticide, Instant Noodle, Biscuits & Pie
CONTRIBUTION OF PREMIUM
TO CATEGORY
Source: Asia Wants Premium report - 2015
Beer, Soft Drinks, Feminine Protection
PREMIUMIZATION BIG PACK
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BESIDE PREMIUM, BIG PACK IS THE OPPORTUNITY TO CAPTURE IN RURAL
17% 18% 20%
30% 31% 31%
53% 52% 49%
MAT 2YA MAT LY MAT TY
Big Medium Small
MSG- Bouillon
Biscuit & Pie
Laundry Products
Shampoo
driven by
Packsize contribution - Rural
Average growth of big pack in Tet vs. Pre Tet in L3Y
TET is season to capture
for big packs in Rural
PREMIUMIZATION BIG PACK
+14% +18%
+6% +4%
+2% -1%
Value % growth YA
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EXECUTIVE SUMMARY
MACRO ECONOMY Despite expanding in Q3‘16, softer momentum than last year with difficulties ahead
GDP 6.4% Q3’16 vs YA
CPI 2.1% YTD’16 vs YA
CONSUMER & RETAILER CONFIDENCE INDEX Still assured
107 CCI
74 RCI
FMCG Growth momentum in key cities maintains (+4.3% vs YA), but more sluggish in Rural, starting from Q3’16 (+1.5% vs YA)
But Rural still proves to be important with huge potential in the long-term So need to watch out key trends: • Premiumization • Big pack
THANK YOU !
CONTACT US David Levitch Senior Manager – [email protected] Nguyen Thi Sao Mai - [email protected] Dang Ba Anh Thi – [email protected] Nguyen Thi Ka Ly – [email protected]
