Vietnam’s Millennials are changing the landscape of consumerism

1. CATERINGTO
VIETNAMESE
MILLENNIALS
by:RalfMatthaes
ManagingDirector
Ralfhas livedandresearchedVietnamforover25
years.

2. Vietnam’s Millennials arechangingthe landscapeof
consumerism.These18-44yearold’s exhibit different
purchasebehavior andrequire different marketing
strategies to harnesstheir interest in yourproductsand
servicesandaboveall their evergrowingdisposable
incomes.
FMCGGROWTH
2018witnessed the first yearin over25yearsthat Fast Moving
ConsumerGoods(FMCG)volumesexperienced decline in urban
Vietnam,at 0.1percent negative growth andonly amild 2.4%
valuegrowth, driven mostly by Inflation. FMCGgrowth in Rural
Vietnamwasmore positive with a5.5%valuegrowth and3.2%
volumegrowth.
9.55
3.77
2.74
5.2
2.4
4.86
1.2 1.78 2.36 2.3
-2013 2014 2015 2016 2017 20180.1
Urban Value/ VolumeGrowth%
Value % Volume %
6.7

3. However, FMCG marketers need not panic just yet, as there are
several growing trends which shed a healthier picture in the
FMCGMillennialmarket.
FMCGpurchasesaretypically measured bywhat is purchased
andconsumedinside the homeanddoesnot include out of
homeconsumption,where Millennialsare flexing their
economicmuscle.
Infocus MekongResearch’s2019ConsumerConfidence Indexisstill
verypositive at 91pointsout of anindexon 120 points, only 1
point below 2018,meaning that consumers arestill upbeat and
willing to spend,but arespendingtheir hardearnedDong
differently than their non Millennial contemporaries.
Millennial consumersshopverydifferently andlook more for
Brandexperience than other consumersandplaceahigh valueon
the entire experience andconvenience ofspending money,than
non-millennials, whosekeyfocushasbeenon best valefor money
andbandsthat are“goodenough”.

4. Millennials, arethe demographiccohort that
directly follows GenerationX, consisting of
individuals born between 1982and2004.
Millennials grew up in an electronics-filled
andincreasingly online andsocially-networked
world. Theyarethe generation that has
received the most marketingattention. Having
beenraised under the mantra "follow your
dreams" andbeingtold they were special,
theytend to beconfident.
Thoughsimilar to GlobalMillennials,they
aretypically older anddefinedby
Vietnam’s turbulent history andthearrival of
the internet andmassmedia. Thus,a typical
Millennial in Vietnamwasborn after the war
(1975) anddefined bythe arrival of the
internet in1997,making
Vietnam’s Millennials aged 18 to 44 years of
age, but with very similar traits as their
Globalbrethren.
WHATIS AMILLENNIAL?

5. Themajor difference between millennials andolder consumerscanbest besummedup as;Consumers who caremoreabout
personalizationofgoodsandservices,withakeeneyeonbrandexperienceandenhancement,convenienceandhealthwhoare alldigitalnatives
andaremuchmorebrandastuteandsavvythanolderconsumers.
Millennials almost alwaysresearchtheir purchaseson-line before anypurchase.Theycompare, researchon-line, visits stores,to try, then
ultimately buy on-line to savemoneyandgainconvenience.
PREVAILINGTRENDS

6. INDEPENDENCEOFCHOICE
Theseconsumersenjoy andwant
their freedom andindependence,
andhencetend to goout much
more in terms of diningandeating
out, stepping out of the yokeof
parentalcontrol.
Thisispartially what isdriving the
reduction of FMCGin-homevolume
consumption, asthey buy lessto
consumeat homeandmore asthey
areon the go.
Justvisit anyof Vietnam’s coffee shops,
fast food outlets and convenience
stores,to seethehigh- volume traffic.
CircleK,asway of example, experienced
double digit growth in 2018,and
outlets suchas Jollibee arealsoseeing
phenomenal growth dueto this trend
of out of homeconsumption.

7. DIGITALLYDRIVEN
Millennials arethe driversof everything Digital. 90%own a
smartphoneandover60%own laptops,desktops,tablets etc. 78%
madeat least onepurchaseon-line in thelast
30days,highlighting amegaMillennial trend, on-line
shopping. Most on-line platforms arethriving interms of growth,
but still hindered bysupplychain issuesandthe limited useof
electronic payment,but growth forsomeisin the triple digits. This
further addsto the reduction of the traditional FMCGmarket
growth asdigitalpurchasesare impacting both Modern trade and
Traditionaltrade growth. Ironically, of the US$3Billion pluse-
commercemarket, some categoriesarealreadyoutselling modern
andtraditional trade.
88% 81%
76%
61% 55%
3%
65% 62%
44% 37%
8 80% 83% 73%
41% 46%
Retail Beauty Healthcare Electronics Books
Everpurchasedatstores
PurchasedatstoresinP3M
PurchasedonlineinP3M
Productpurchases

8. Banksandinsurancecompaniesin Vietnamhaverealized this digital
trend explosionandareall offering Omni-Channelpayment and
purchaseoptions, further catering to thesetech savvy consumers.
In terms of product andservice brandselection, Millennialschoose
brandsandservicesthat offer; personalization, suchasbeingable to
designyour own running shoes,Apps,which youcanprogram with your
preferred content andall must offer, convenience,such asfree delivery,
haveahealth platform andareeco-friendly. These arethe new
parameters of Brandselectionandshould evolve even further in the
next fewyears.
Another keytrend isswitching from local Vietnamese brandsto
International brands.Thisespeciallyholdstrue for the Foodand
BeverageCategories,dueto recent food safetyandhygiene issues of some
local brands.Thisisfurther exacerbated bytheperception that
Vietnamese brandsshould becheaperto produce, creating the
perception that Vietnamesebrandsshould becheaperthan
International brandsandhenceconsumersselectInternational brands,as
they areperceivedto havebetter quality and assurances,evenat a
slightly higherprice.

9. TRENDREVERSALS
9%
14%
17%
23%
15% 16%
36%
48%
Goto bars/
restaurants
Read(physical)
books
Exercise Travel
Technologyhasnow fully saturatedVietnam.Aschildren with new
toys,they playwith it for afew weeksandtend to move onto
other activities. Thisreaction will alsooccurwith
Vietnam’s technologyobsessed,partially dueto saturation and
partially dueto more choiceandmore income.Whenasked which
entertainment activities Millennials will engagein morein the
future, outside of Smartphoneusage,not asingledigital activity,
from Gamingto WatchingYouTube,sawanincrease. In contract, non-
digital activities sawasubstantialspikein future use,led bytravel.
ENTERTAINMENTACTIVITYGROWTH
Today inFuture

10. FMCG COMPANYTACTICSANDSTRATEGIES
Many FMCGcompanieshavebeenquick to realizethesechanges.Nowhere can this been
seenmore prominently than the growth of digital advertisingspend, which in ashort 5
yearshasgrowth from about US$30Million to anestimatedUS
$300Million in 2018.Thoughonly accountingfor some17%of totaladvertising
spend,it doesbarewitnessthat FMCG’sarefishing where the fishare,on-line.
Almostall major FMCG’sadvertiseon Facebook,Googleandevenhavetheir own fan pagesandblogsfor consumersto addandshare
experiences. Thisisoneareawhere proper targeting andknowing exactly who your Millennial digital native is,becomescrucial, to
ensureyouaremeasuringthe impact of your digital campaignsto better understand your R.o.I,which Infocuscanhelp with viaour
partner Miaozhensystems.
Many FMCG’shaveembracedgamingto bring their messagesto theseyoungconsumers.Asall aredigital andgrew up with Gaming,
manycompaniesareattracting consumersbygamifying their messagesto generate brand awarenessand consideration.
As Vietnam’s tech boom continues, many companies are reaching consumer with Digital promotions, using QR codes to deliver
discounts and vouchers to drive business. This again allows for immediate access and reduces cost, as paper and procedures are
minimalized.

11. 74 24 2
51 27 22
18-44
44plus
LASTON-LINEPURCHASE
Lastmonth Lessfrequentlyy Never
Theusageof Socialmediahas skyrocketed,from theobvious (Facebook,Google,Zalo,etc)tothenew,Instagram,Viber, Facetime.FMCG’s
areplacingthemselvesattheforefrontof whereMillennials spendmostof theirtime,on-lineand via theirsmartphones.Thisallows for
continuousbrandbuildinginanevermorefragmentedmediamarket.
Finally,manyFMCG’shavebroughttechnologytotheretailenvironment,wheresmartphonetargetedadcampaigns tellaconsumer
wherethebestdealsareandwhatdiscountscanbehad.
ConsideringthatsmarttechnologyhasonlybeeninVietnamfor7yearsorso,itisamazinghowfastthedigital
advertisingagehastransformedtheFMCGlandscapeandwillcontinuetodoso.

12. WINNINGMILLENNIALS
So,to ensurethe continued growth of FMCGfrom Millennials, it iscritical tooffer; astrong on-line presence,Apps,
gamification, smart tech retail messaging,on-line promotions, andmost importantly content andproducts or serviceswhich
meet theseconsumersexpectationswhich are; personalization, convenience,ahealthy platform, eco-friendliness andasense
of belonging andanability to share.
If these can be achieved, the last challenge for success is to ensure you know how to specifically target these
millennials, which is all about; knowing your target audience and their preferred medial channels and which
categoriesthey prefer for which media channels,andwhat time toengagethem.

13. www.ifmresearch.com 13
RalfMatthaes |ManagingDirector
Tel:+84-82262-7627
Mobile:+84-903-949-531
Website: www.ifmresearch.com
ifmpanel website:www.ifmpanel.com
Email: Ralf.matthaes@infocusmekong.com 4th
Floor, 21 Phung Khac Khoan Street, D.1 HCMC,
Vietnam
Advanced- Agile- Accurate-Actionable