DECEMBER 2014

IMPACT ASSESSMENT

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EXECUTIVE SUMMARY

Within emerging markets, the formal economy is expanding rapidly. Contracted workers are earning minimum wage which allows them to purchase basic products to support their family. However, workers earning up to 400 USD per month in the manufacturing and industrial sectors face significant barriers when attempting to buy essential products and services. Buying items like a refrigerator, hot water heater, washing machine, or an air conditioner is exceptionally difficult when these products cost the equivalent of one month’s salary or more.

Additionally, workers in this income bracket face barriers when purchasing essential products from major retailers, such as distance and cost, which are challenging for them to overcome. Retailers are often located far from industrial zones and delivering products, especially white line, can take significant investment. Furthermore, workers often apply for financing to afford these products and high interest rates either from retailers or other money lenders can squeeze out buyers with limited purchasing power. If financing is an option, the application process and repayment methods are time consuming and inconvenient for borrowers and often over-leverage them. Modern payment methods such as digital wallets might solve some of these issues but they are not well understood, lack uptake in developing countries and do not unlock purchasing power nor bridge both the retail and affordability gap prevalent in a vast, untapped market at the base of the economic pyramid.

Workers earning up to 400 USD per month in the manufacturing and industrial sectors face significant barriers when attempting to buy essen tial products and services.

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An innovative solution is required to enable workers earning modest monthly wages to instantly access essential products and services without over-leveraging them financially or making them travel long distances to shop. iCare Benefits is an unrivaled platform that bridges the retail gap and unlocks purchasing power. Workers now have instant access to the offerings that span the lifecycle of household spending with prices competitive with modern retail, but payments over 6 months with no interest.

iCare Benefits is a retail platform and employee benefits program for registered members with the distribution capability and capacity to solve the reach and financing issues facing an immense untapped market of workers in developing nations. In partnership with brands, corporations, labor unions, and other stakeholders, iCare Benefits is a no cost, no risk program that is proven to enhance the quality of life and productivity of workers. The platform also saves workers both time and money and eliminates their need to borrow from friends, family or the black market when they need cash to make purchases. iCare Benefits also reduces turnover thus bringing down the cost to acquire new workers. Since officially launching in 2013, the program's impact

on livelihoods and worker retention has been significant. ThIS survey was created to gain invaluable insights into the impact on this intervention on the lives of active members and their familiers.

iCare Benefits enables workers to purchase essential products and services through no interest installment payments

COMFORT LIVING HEALTHY LIVING SMART LIVING PROSPEROUS LIVING

SURVEY HIGHLIGHTS

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Survey respondents provided valuable insight into the impact of iCare Benefits. The vast majority of respondents have experienced an improvement in their living and work conditions since they became members of the iCare Benefits program, with a particularly strong positive impact on quality of life and outlook on life. Respondents recognised that iCare Benefits has allowed them to purchase previously una�ordable products and helps to control their spending. The improvement is aided by the excellent service iCare Benefits provides to members, with extremely high satisfaction ratings for the customer service call center and the delivery service.

63% female

73% married

64% live with spouse

55% live with children

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As many respondents do not yet own a number of essential products that make life more comfortable, there is an expressed demand for iCare Benefits to provide a broader variety of products extending outside of traditional retail into consumer finance, savings and loans and insurance.

There is demand for products that provide access to essential healthcare, hygiene and nutrition as well as education and vocational training programs.

Workers expressed great interest in gaining access to instant cash and short term loans. They also want to learn about financial literacy and demand alternatives to borrowing uncomfortably from family and peers or looking for solutions from money lenders who charge high interest.

Members also are poised to explore self-service channels and want to browse and shop on web apps and mobile applications. High smartphone penetration, and strong mobile internet connectivity is fueling this growing demand.

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The survey respondents consisted of a randomized sample of workers across 10 factories in southern and central Vietnam. The survey was conducted from December 2014 until February 2015 with 2178 total respondents, 3 focus groups and 30 personal interviews 95% confidence level, margin of error of +/- 5% and 0.5 standard deviation. Followed ICC/ESOMAR International Code on Market and Social Research fundamental guidelines.

SURVEY METHODOLOGY

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Nearly two-thirds (63%) of all respondents are female.Over half (56%) of the respondents are 30 years old or younger. Only 12% are older than 40.

Three-quarters (73%) of the respondents are married. A majority (64%) of the respondents live with their spouse, and over half (55%) live with a child as well.

Nearly half (48%) of all respondents also live with a parent.

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DEMOGRAPHICS

SURVEY FINDINGS

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IMPACT OF iCARE BENEFITS

› How has iCare Benefits influenced your life? 2030 out of 2178 people answered this question

0 10 20 30 40 50 60 70 80

5.6%

2.1%

19.0%

3.5%

21.8%

33.3%

16.7%

71.4%

I DO NOT FEEL ANY DIFFERENCE IN MY LIFE

I NOW THINK LESS ABOUT SAVING MONEY AND MORE ABOUT SPENDING MONEY

I NOW THINK MORE ABOUT SAVING MONEY

I AM OUT OF CONTROL OF HOW I SPEND MONEY

I AM MORE IN CONTROL OF HOW I SPEND MONEY

I FEEL THAT MY HOME ENVIRONMENT AND LIVING CONDITIONS IMPROVED

I STILL CANNOT AFFORD ALL THE THINGS I NEED

I CAN NOW BUY THINGS THAT I NEEDED BUT COULD NOT AFFORD BEFORE

0 10 20 30 40 50 60 70 80

0.3%

7.1%

60.1%

31.9%

› What has been the impact of iCare Benefits on your quality of life? 1841 out of 2178 people answered this question

0.6% VERY NEGATIVE IMPACT

NEGATIVE IMPACT

POSITIVE IMPACT

NO IMPACT

VERY POSITIVE IMPACT

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Word of mouth is generating leads and members as over 50% of the respondents were referrals

in their workplace, and one-quarter (24%) were told by a friend or colleague at work.A significant majority (71%) of respondents stated that they can now

One-third (33%) of respondents feel that their home environment and living conditions have already improved because of iCare Benefits.19% are able to think more seriously about saving money now, with 22% now in more control of how they spend their money.An overwhelming majority (92%) of respondents expressed that iCare Benefits has had a positive impact on their quality of life.Well over three-quarters (83%) indicated that their and their families’ well-being have improved since they became members of iCare Benefits.77% of respondents believe that their health and their family’s health has been positively impacted by iCare Benefits. Over three-quarters (77%) of respondents also stated that iCare

Satisfaction at work has improved due to iCare Benefits for four-fifths (81%) of respondents.A considerable majority (85%) of respondents have an improved outlook on life since they joined the iCare Benefits program.

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› What has been the impact of iCare Benefits on your productivity at work? 1581 out of 2178 people answered this question

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0 10 20 30 40 50 60

VERY NEGATIVE IMPACT

NEGATIVE IMPACT

NO IMPACT

POSITIVE IMPACT

VERY POSITIVE IMPACT

0.6% VERY NEGATIVE IMPACT

2.1%

20.2%

55.4%

21.8%

90% rated the iCare Benefits delivery service as good or excellent.For the iCare Benefits warranty service, over three-quarters (79%) of respondents answered that the service is at least good.A large majority (81%) of respondents rate the iCare Benefits cata-log as good or excellent, and an even greater number (84%) of respondents believe that iCare Benefits has a good or excellent selection of products available.A mobile app is almost universally demanded with 97% of respon-dents answering that they would use a mobile app that allowed them to browse more products than the paper catalog and gave them access to personalized promotions.

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iCARE BENEFITS PRODUCTSAND SERVICES

› iCare Benefits Customer Service Call Center 1902 out of 2178 people answered this question

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› Would you use an iCare Benefits mobile app? 1856 out of 2178 people answered this question

97% - YES

3% - NO

0

10

20

30

40

5045.0%

Excellent Good Average Poor ExtremelyPoor

NotApplicable

48.1%

5.9%

0.8% 0.1% 0.1%

The overwhelming majority (93%) of respondents rated the iCare Benefits customer service call center as good or excellent.

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27.2

9.3

13.6

20.0

29.8

› Air Conditioner 1731 out of 2178 people answered this question

ESSENTIAL PRODUCTS AT HOME

0 10 20 30 40 50 60 70 80

I DO NOT NEED IT

I PLAN TO BUY IT

NO

YES

One-quarter (24%) of respondents do not own a refrigerator, with only 2.3% stating that they do not need one.

Half (50%) of all respondents do not own a washing machine, with 11% planning on buying one in the near future and only 4% replying they do not need a washing machine.The vast majority (88%) of respondents already own a mobile phone.Over three-quarters (81%) own a television, with 7.5% planning to buy one.Nearly one-third (29%) of respondents do not own a mattress yet, with a further 11% planning on buying their first or a new mattress soon.Nearly two-thirds (61%) do not own an air conditioner in their home.12% expressed that they do not need air conditioning at home. There is also strong demand for other products not listed above, such as a water heater, rice cooker, motorbike, or consumer elec-tronics.

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11.7 %

11.9%

60.9%

21.4%

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› Loyalty program 1432 out of 2178 people answered this question

NEW PRODUCTS AND SERVICES FROM ICARE BENEFITS

8.7% Unlikely

16.1% Very Unlikely

44.2% Likely

31.0% Very Likely

Nearly three-quarters (73%) of respondents indi-cated that they are likely to purchase health insur-ance through iCare Benefits if it was o�ered.

83% would buy motorbike insurance if it was introduced and o�ered by iCare Benefits.Over half (57%) of respondents would sign up for an emergency medical pre-paid plan through iCare Benefits if it was available.Over two-thirds (70%) would be likely to sign up for an iCare Benefits savings plan.A majority (55%) are likely or very likely to enroll in vocational training programs through iCare Benefits.Two-thirds of respondents (68%) would like to sign up for a sav-ings plan related to their children’s education.58% would sign up for a homeowners mortgage plan that allows them to purchase a house or apartment through iCare Benefits and make repayments over multiple years.A majority (58%) of respondents would be likely to buy entertain-ment content digitally like e-books and music from iCare Benefits.Nearly three-quarters (72%) would be likely or very likely to use a mobile app to shop for products from iCare Benefits.Nearly two-thirds (64%) of respondents indicated that they would be likely to sign up for a mobile chat app similar to Viber if it was launched by iCare Benefits.A significant majority (72%) would be likely or very likely to sign up for an iCare Benefits gift service.Three-quarters (75%) of survey respondents would join an iCare Benefits loyalty program.

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› Go to iCare center in your workplace or near your home to pick-up products you buy 1616 out of 2178 people answered this question

iCARE BENEFITS QUALITY OF SERVICE AND DISTRIBUTION

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10.6% Unlikely

17.0% Very Unlikely

35.4% Likely

37.0% Very Likely

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Nearly three-quarters (72%) of respondents would be likely or very likely to go to an iCare Center in their workplace or near their home to pick up products they have bought.

A substantial percentage (80%) would be likely to use an app on a mobile phone or other mobile device to buy products in the iCare catalog. Purchasing home delivery for a fee for products bought from the iCare catalog would be likely or very likely for two-thirds (67%) of respondents.Nearly two-thirds (61%) would purchase expedited home delivery of products they buy from iCare Benefits.

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RESPONDENTS’ USE OF OTHER SERVICES

› Medical emergencies 1474 out of 2178 people answered this question

A majority (55%) of respondents do not have a personal check-up at the doctor regularly, with 8% stating they would not be able to a�ord a check-up.

14% cannot a�ord to pay for a check-up of a family member with a doctor, and 63% said they did not do this often.Nearly half (48%) of respondents and their family members do not receive vaccinations often.12% cannot a�ord this on a regular basis.A significant number (50%) of respondents are not able to pay for medical emergencies when they arise.Half (50%) cannot a�ord to repair damage to their motorbike or vehicle often.Over half (54%) do not often buy books and other educational ma-terials for themselves or a family member, with 15% unable to a�ord such materials at all.

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0 10 20 30 40 50 60 70 80

I CANNOT AFFORD IT

NOT OFTEN

OFTEN

49.8%

62.1%

11.5%

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› Why do you save or think you should save money? 1876 out of 2178 people answered this question

PERSONAL SAVINGS

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A significant majority (61%) of respondents believe that the primary reason to save money is for a better lifestyle in the future.

Over half (51%) stated that they also believe they should save to cater to future needs, such as emergencies, weddings, or funerals.43% of respondents indicated that they think saving money for the education of their children is important.Nearly one-third save or think they should save to either buy a vehicle (30%) or apartment/ house (29%) in the future.45% of respondents find it di�cult to save because they have no money left once they have paid their bills.Approximately one-third (31%) were never taught how to save so have trouble with it.Nearly half (45%) of respondents would be immediately inter-ested in a monthly savings program that guaranteed money after retirement, with a further 49% possibly interested but would like to learn more about the program first.

27.9

32.4

23.8

37.4

23.6

4.0

0 10 20 30 40 50 60 70 80

0.1%

43.0%

18.2%

30.4%

29.4%

61.4%

51.1%

OTHER

FOR THE EDUCATION OF MY CHILDREN IN THE FUTURE

FOR STARTING A BUSINESS LATER

FOR BUYING A VEHICLE (MOTOBIKE)

FOR BUYING AN APARTMENT, HOUSE, OR LAND

FOR BETTER LIFESTYLE IN THE FUTURE

FOR FUTURE NEEDS

› How do you get cash if you run out of money and need it? 1874 out of 2178 people answered this question

FINANCIAL SERVICES AND PRODUCTS

› What kind of financial service needs do you require or find interesting? 1777 out of 2178 people answered this question

0 10 20 30 40 50

01020304050607080

BORROWFROM FAMILY

BORROWFROM FRIENDSOF NEIGHBORS

OTHER

24 HOUR ACCESS TO ONLINE BANKING

SAVINGS ACCOUNT WITH INTEREST

QUICK LOAN WITH LOW INTEREST RATES

INSTANT CASH

OTHER

MONEYLENDER

LOAN FROMAN MFI OR BANK

SELL POSSESSIONSAT A PAWN SHOP

WITHDRAWPERSONALSAVINGS

EASY MONEY TRANSFER TO FAMILY MEMBER OR OTHER WITH LOW FEES

0.3%

16.4%

36.9%

35.6%

19.7%

47.2%

64.2% 28.8% 18.3% 22.2% 14.1% 17.1% 0.2%

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If users run out of money but need more, nearly two-thirds (64%) borrow from a family member.

Over one-quarter (28%) will borrow from friends.One-fifth (18%) will turn to a money lender and 22% will apply for a loan from a MFI or bank.15% would sell possessions at a pawn shop if they needed money.Only 16% of respondents do not require emergency cash at least once per year before they receive their monthly salary.39% need emergency cash at least six times per year.The primary reason respondents have taken out a loan is for con-sumption purposes, with 36% stating they had bought a product using a loan. Over one-third have also taken out loans to cover unforeseen expenses (35%) or for investment purposes (34%), such as build-ing or renovating a house, and 18% used a loan to pay for the school fees of a family member.Only one-fifth of respondents (21%) have never taken a loan out before.With regard to financial services, nearly half (47%) require or find instant cash interesting and 20% would like to be able to access quick loans with low interest rates.Over one-third are interested in a savings account with interest (37%) or easy money transfer to family members or others with low fees (36%).The majority of users are interested in financial education, with 56% registering interest in learning about family financial planning and 31% want to understand loan interest calculations.38% are interested in programs to learn about di�erent savings programs.

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Respondents can now a�ord essential products and services thanks to iCare Benefits.While in the past workers earning up to 300 USD per month would struggle to buy essential products, iCare Benefits has enabled them to a�ord products that make life easier and more comfortable.

iCare Benefits has had an extremely positive impact on the personal lives of respondents.The vast majority of respondents have seen an improvement in their health, quality of life, and wellbeing since joining iCare Benefits. Workers can save time on household chores and can spend more time relaxing with their family.

The professional life of respondents has improved significantly due to iCare Benefits.Respondent satisfaction and productivity has improved in the workplace following the deployment of iCare Benefits, in part because workers are better rested when they come to work as their life at home has become easier and more enjoyable.

iCare Benefits is providing a highly rated service to customers.All business areas from product selection to delivery and customer service are highly rated by respondents. This creates trust between iCare Benefits and members that iCare Benefits will o�er high-quality products in all four pillars.

iCare Benefits is successfully spreading the message of the program through a variety of channels.The number of di�erent channels suggests that iCare Benefits is popular among workers, labor unions, and factory management as all three groups are convincing workers to become members.

A mobile app is essential for respondents.The iCare Benefits program has enabled an increasing number of respondents to purchase smartphones and it is likely respondents desire to use these to buy further products conveniently.

Respondents do not own a significant number of essential products.White goods are not widely owned, meaning there are significant opportunities to sell these products through iCare Benefits Comfort Living.

CONCLUSIONS

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There is substantial demand for iCare Benefits to expand into new product and service areas.Medical, educational, and financial products related to savings are likely to see signifi-cant uptake when launched.

Respondents are willing to pay extra fees for the home delivery of products. Therefore, respondents are interested in maximizing their convenience. Respondents are already busy with their work and personal lives, and travelling long distances to purchase essential products is highly undesirable.

Essential medical and educational services are una�ordable and underutilized.Healthy Living and Smart Living will open up new opportunities for iCare Benefits members to access training and education programs for themselves and their children while simultaneously improving their health through low-cost medical products.

Respondents want to save money for a better lifestyle in the future.With iCare Benefits, a better lifestyle is available immediately. Respondents are likely to save money to buy products to make their life more comfortable, and iCare Bene-fits allows them to buy these products the moment they sign up.

iCare Benefits can help respondents overcome di�culties in saving money.For respondents who have no money left after paying their bills, iCare Benefits’ six month, 0% installment payment plan allows members to spread the cost of expensive products over time.

There is strong interest in savings products through iCare Benefits.This reinforces the trust that exists between iCare Benefits and its members. Respon-dents not only trust iCare Benefits to supply essential products, but also with their savings as well.

Emergency cash is commonly needed and demanded by respondents.Through the Cash Advance service, respondents will no longer have to turn to turn to black market money lenders or ask family who are also on low incomes for financial support.

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LIVING FORTOMORROW

Respondents often turn to money lenders or banks for emergency money.The high interest rates from money lenders and banks (due to a lack of credit history) can be prohibitive and force respondents to spend months repaying loans.

Loans with low interest rates are demanded for a wide number of purposes.Weddings or school fees can be costly, one-o� expenses that are di�cult to pay for. By providing loans with low interest rates, the cost can be spread over multiple months without the user facing punitive interest rates as they would from money lenders.

There is significant potential for financial education programs.It is unlikely that the majority of respondents have been educated on how to use financial products e�ectively. Through Smart Living and Prosperous Living, workers will gain knowledge on, for example, the loan application process.

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