The changing reality of retail - CBRE · PDF fileBrand perceptions Retail trends ... Local brand preference is growing ... Total Male Female 20-24 Y.O 25-29 Y.O2 30 Y.O

The changing reality of retail

Ralf Matthaes

Regional Managing Director

Agenda

Key Demographic changes

Consumer confidence

Consumption trends (Omitted)

Brand perceptions

Retail trends

Branded Retail

Luxury myth

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mailto:[email protected]

Demographics

Vietnam population pyramid

By 2021 – 15.5 million

new consumers enter

the market

1999 42.8 Million aged 20 + = 56% population

2012 59.4 Million aged 20 + = 65% population

Source: VN GSO 2009, TNS analysis

% of population

SEF F 3%

E 22%

D 25%

C 31%

A 9%

SEC A+ 1%

2,500,001 – 5,500,000

less than VND 2,500,000

5,500,001 – 8,500,000 VND 8,500,001 – 13,500,000

13,500,001 – 15,500,000

15,000,001 – 40,000,000

Urban declared monthly household income

Urban Vietnam = 28 million is much wealthier than rural Vietnam = 62 Million

9%

B

Source: TNS VietCycle 2011 – Urban only

41,000,000 VND Plus

1.5%

3.9%

5.6%

11%

15%

29%

34%

A1

A

B

C

D

E

F

Vietnam national annual household income

2/3rds of Vietnamese are still eking out a day to day existence

Source: TNS Vietnam

Wealthy - 1.5%

1.3 mil

Affluent - 9.5%

8.2 mil

Middle - 26%

22 mill

BOP - 63%

54 mil

Consumer Confidence – 2011-2012

2008 – 2012 Consumer Confidence Index

8

89

64

78 79

68

0

20

40

60

80

100

2008 2009 2010 2011 2012

110

Index has fallen drastically due to poor Vietnamese economic performance

Source: TNS CCIP – 2008 – 2012 urban only

Consumer overview of Vietnam's next 12 months

51

44

29

34

20

13

34

30

41

35

38

48

15

26

30

32

35

39

Value of theVietnamese dong

Employment

The cost of living

Vietnam's economy

Foreign investment

My personal standardof living

Worse Same Better

57

20

21

13

7

5

25

42

43

27

42

43

16

36

36

58

41

51

2011 = 79

Q: In the next 12 months would you think that the following will be better, the same or worse than they are now?

Confidence has dropped substantially in the past 12 months


2012 = 68

76

68

17

20

6

12

Early 2011

Mid 2012

Present job is safe

Chance of unemployment

Don't know

Job Security is Falling

10

Do you think your present job is safe, or do you think there’s a chance you may become unemployed?


Job security is falling, driving consumer caution

Consumers savings

11

55

32

18

26

14

23

13

18

Early 2011

Mid 2012

Up to 5% 5% - 10%10% - 20% More than 20%

Roughly how much of your monthly income do you save?

++


Not only savings but % consumer

are saving has risen sharply

47

46

37

32

32

27

25

25

24

24

20

46

43

55

52

54

56

52

58

55

59

65

7

12

8

15

14

16

23

17

21

17

15

Education

Health care products/services

Food & beverages products

Personal care products

Household utilities

House hold care products

Entertainment & dining out

Mobile, Laptop, Devices

Home appliances

Transportation

Communications

More Same Less

Consumers spending in the near future?

12

Given the economic situation, will you be spending, less, the same, or more on each of the following items?


Some sectors continue to see growth, whilst other continue to decline

©TNS 2012

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

Changing brand perceptions

© 2011 TNS 13

©TNS 2012

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

43 47

75

50 49

39 33

50 45

1999 2004 2008 2011

“The country of origin is more important than the brand

name”

“Vietnamese brands are as good as international brands”

“I prefer local Vietnamese brands”

Top-2-box agreement (%)

Local brand preference is growing

Source: TNS VietCycle 2011.

© 2011 TNS 14

Foreign versus local brands

©TNS 2012

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

“I like to use the brand which shows my success”

“I prefer to buy well-known brands”

“I never pay attention to brand name”

76

91

31

73 73

19

55 54

17

49 45

13

1999 2004 2008 2011Top-2-box agreement (%)

Source: TNS VietCycle 2011

© 2011 TNS 15

Brand as an icon is beginning to fade, but brand equity appears to be on the rise

Famous or Fantastic?

©TNS 2012

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

41

93

71 61

1999 2004 2008 2011

“I stick with my main brand it is tried and trusted”

Brand loyalty Top-2-box agreement (%)


© 2011 TNS 16

Consumers are practical in their approach to brand selection: “loyal until the next best thing comes along”

©TNS 2012

3.14 X AXIS

6.65 BASE MARGIN

5.95 TOP MARGIN

4.52 CHART TOP

11.90 LEFT MARGIN

11.90 RIGHT MARGIN

40

86 88

26

70 72

32

63 73

20

1999 2004 2008 2011

“I am willing to pay more for higher quality brands”

“I prefer a brand which has a health and/or environment focus”

“There are no real differences between the brands available in

the market”


Quality needs are being met leading to consumers less likely to pay more for a ‘high quality’ product.

With increased saturation,

consumers are becoming more brand savvy?


© 2011 TNS 17

Brand differentiation

Retail trends

Most frequented modern retail outlets

67

38

20 16

5 2 2 1 0 4

65

35

2 0

7 3

20

10

Co-op Mart Big C Metro Maximark Lotte Mart Citimart Parkson Vincom Fivimart

HCM City Ha Noi

Source: VietCycle 2011

Base: HCMC & Hanoi

Nationally Big C followed by Metro are the most frequented outlets

Note low penetration of high end venues

Department store outlets shop most frequented

SOURCE: Q1. Which of the following department store outlets do you shop at most frequently?

• BASE: 150 (TOTAL), 39 (MALE). 111 (FEMALE)

17

3

9

13

4 17

37

Parkson Plaza

Crescent Mall

Vincom Centre

Lotte Mart

Diamond Plaza

Saigon Square

None

%

Parkson & Saigon Square are most popular

department store outlets in HCMC

Reasons for shopping at department stores

12

26

46

36

43

32

42

24

43

11

8

20

7

26

4

4

7

5

4 ParksonPlaza

VincomCentre

Lotte

Mart

SaigonSquare

%

Affordable prices Great selection of goods/brands

Clean and nice shopping environment I live close by

Friendly and helpful staff There are many brands I like

• SOURCE: Q3a. Why do you shop at this department store outlet (Outlet selected at Q1) the most?

• BASE: 25 (PARKSON), 14 (VINCOM). 19 (LOTTE MART), 26 (SAIGON SQUARE)

Affordability and selection drive preference in outlet selection

Supermarkets shop most frequently

• SOURCE: Q2. Which of the following outlets do you shop at most frequently?

• BASE: 150 (TOTAL), 39 (MALE). 111 (FEMALE)

5

59

21

10 1 1 1 3

Metro cash and Carry

Coop Mart

Big C

Maximark

Citimart

Giant

Vinatex

None

%

Coop Mart rules the supermarket space in HCMC followed by Big C

Coop Mart

Reasons for shopping at supermarket

33

65

7

29

26

23

53

57

13

13

25

10

27

14

2

3

1 Coop Mart

Big C

Maximark

Metro cash

and Carry

%

Affordable prices Great selection of goods/brandsClean and nice shopping environment I live close byFriendly and helpful staff My girlfriend likes Big CConsumption habit

• SOURCE: Q3B. Why do you shop at this outlet (Outlet selected at Q2) the most?

• BASE: 88 (COOP MART), 31 (BIG C). 15 (MAXIMARK), 7 (METRO CASH AND CARRY)

A mix of affordability, selection and Location are driving Coop Mart success

Importance of shopping outlet's branding

12 56 22 9 1 Total

%

Extremely important Important

Neutral Not very important

Not important at all

• SOURCE: Q7. How important is a shopping outlet’s branding on your decision to shop there?

• BASE: 150 (TOTAL)

Almost 70% note that branding is important for a retail outlet

Importance of shopping outlet's branding

12 13 12 13 10 12

56 59 55 64

59 48

22 21 23

18 26

23

9 8 10 4 5

15 1 1 2

Total Male Female 20-24 Y.O 25-29 Y.O2 30 Y.O. -

above

%

Extremely important Important Neutral

Not very important Not important at all

SOURCE: Q7. How important is a shopping outlet’s branding on your decision to shop there?

• BASE: 150 (TOTAL), 39 (MALE), 111 (FEMALE), 45 (20-24 Y.O.), 39 (25-29 Y.O), 66 (30 Y.O. – ABOVE)

Younger consumers find braning more important than others

Retail outlet which best suites my lifestyle

20

4

14

19 6

11

25 Parkson Plaza Crescent Mall

Vincom Centre Lotte Mart

Diamond Plaza Saigon Square

None

Parkson & Lotte Mart best suite Saigonese lifestyles

The Luxury Myth

Rich

Who is Vietnam’s luxury consumer?

Gender

29


52% Male

Living in

Hanoi = 36% - HCMC = 19%

Age between

35 – 54 = 49%

Monthly Income

8.5 Mil. vnd plus = 67%

30

% of populations which have bought luxury items

in last 12 months

14

*Luxury item here is defined as valued over VND 10,000,000

2011

10


Slow growth indicates that luxury is still well out of

reach for most consumers

2008

31

What does Luxury mean to Vietnamese consumers

60

56

36

32

26

23

18

14

Premium price

Premium quality

Unique design

Used by famous people

Hard to find

Country of origin

Limited edition

Exclusive

Q: Which of the following statements describe what is luxury to you?


Vietnam Luxury = Price & Quality,

Western World Luxury = Exclusive & Country of origin

PREPARED FOR DIAGEO

The luxurious difference

between Hanoi & HCMC

13 © 2011 TNS

63

1813

9

82

6

46

22

HCMC Hanoi

Having a

successful life

Showing off

Flashy

Enjoy high

quality life

With good

taste


PREPARED FOR DIAGEO

Hanoi versus HCMC, Luxury is….

10 © 2011 TNS

56

44

21

52

61

26

HCMC Hanoi

Premium

quality

Premium

price

Country

of origin

For Hanoians luxury perceptions are much higher than in HCMC ,

except for Quality


PREPARED FOR DIAGEO

Technology – the top of the luxury food chain

58

35

29 27

24 20 18

15 13

Tech item

laptop, TV,

camera

Household

items Cars Clothes Jewelry Furniture

Accessories

footwear

Cosmetics

Perfume Alcohol

Categories I would be willing to pay a premium for…


21 © 2011 TNS

Almost 2 in 3 ‘luxury’ buyers willing to pay a premium for tech items.


PREPARED FOR DIAGEO

Retail Synopsis

Due to the below factors, retailing is not what it is supposed to be….

NAT – is limiting value/volume retail from opening up

Lack of prime space

Low consumer confidence High Inflation

High rents

High product cost restrictive to consumers

Wrong mix of retail outlets – all premium and not in line with

consumer affordability

PREPARED FOR DIAGEO

Retail Solution

36 www.tnsglobal.com www.tnsvietnam.vn

Many products under one roof at affordable prices

Must offer grocery / food & beverage outlets

Must offer reasonable prices to entice consumers

Must offer right mix of consumer basket needs

Location - Location - Location

Documents

The changing reality of retail - CBRE · PDF fileBrand perceptions Retail trends ... Local brand preference is growing ... Total Male Female 20-24 Y.O 25-29 Y.O2 30 Y.O