VIỆT NAM RURAL REPORT

Cốc Cốc Ad Platform

Honorably Published @ MMA Website
Rural definition
Vietnam rural is also changing rapidly in both demographics
and lifestyles

URBAN: refers to the audiences living in 6 More knowledgeable Individuals 18+ YO

key cities in Vietnam including: Hanoi, Ho Chi

2018
Minh, Da Nang, Can Tho, Hai Phong, Bien
Hoa
2012

RURAL: geographical audiences in Tier 2 Post-high school Grade 6-9 No formal education
provinces in Vietnam, including both the sub- Grade 10-12 Grade 1-5
urban area (the capital city of the province)
and areas outside of the city of those More white collar workers Individuals 18+ YO
provinces.
2018
RURAL in this context does not refers to
income level of the audience. 2012

Government staff / officials White collar workers Farmer / fisherman

Self-employed Blue collar workers Part-time jobs / others /

unemployed
Source: Kantar
 Economic growth
Urban Rural

CAGR 2012-2030F
+6.5%

CAGR 2012-2030F
CAGR 2012-2018
+7.0%
+8.5%
Average monthly income per CAGR 2012-2018
capita (million VND) +9.9%

% Households by income 2012 2019 2012 2019

High income Mid Low income High income Mid Low income

Mid High income Low income Mid High income Low income

Source: Kantar Worldpanel Division | Household Panel 12 months to September 2019 & Lifestyle Survey 2018
 FMCG growth: rural vs urban
The FMCG growth for in-home consumption moves to a single-digit era, however showing positive signals to
bounce back in rural

CAGR (2012 - 2019) Urban 4 cities Rural

Value +6% +8%

Volume +4% +7%

Avg. paid price +2% 0

Forecasted for 2020 - 2025

5% - 6%
Value Growth

Source: Kantar
 Consumer’s share of wallet
% Spending per month

Urban Rural

Increase vs 3 YA *Others in Rural include: Investment and Farming

Source: Kantar Worldpanel Division | Expenditure Survey 2018 | Urban 4 cities & Rural Vietnam
 Rural shopping potential

Monthly household spending on Spending per trip to Hyper & Spending per online
Fresh food & FMCG Supermarket shopping session

2.1M VND 164K VND 242K VND

44% of Urban cities 84% of Urban cities 68% of Urban cities

Monthly household income Penetration Penetration

7.9M VND 30% 9%

42% of Urban cities 78% in Urban cities 25% in Urban cities
 Shift from traditional to modern retailers: Mini-markets are winning rural
consumers with the aggressive expansion of many players

Mini-markets - % Penetration % shoppers in Minimarket by KEY ADVANTAGES:

demographic
● Product Assortment: Similar to
modernized street shops yet

3% 4% 15% offering a wider/ more diverse range

of products/ choices, high quality/
premium choices
2018 2019 2020
● Product Quality: Hybrid format
between street shops & wet
markets to offer branded fresh
X5 Shopper Base
foods/ or with product origins

New Rural Household

2 Mil acquired
2019 2020
 Rural Vietnam is on the edge of transformation:
gap between urban and rural is closing fast
Accelerating on the Highly polarized across rural
urbanization pathway regions

Annual Income Urbanization Poverty

32M VND Red River

speed

63.33%
household

1.7%

University/ college graduate increases by South East 63.22% 5.6%

2.5 TIMES South Central 30.87% 8.2%

Mekong Delta 29.43% 19.2%

FMCG consumption Central Highland 22.5% 26.4%

51% National Sales Northern Midlands and

Mountains
15.53% 18.5%

HUGE SOURCE OF GROWTH

ONE SIZE DOES NOT FIT ALL
FOR BUSINESS

Source: Adtima
60% OF VIETNAM POPULATION IS
STILL RURAL AND THEY ARE
BECOMING MORE AND MORE
DIGITAL
 Media Penetration in Rural Vietnam
TV is declining while internet is growing, especially smartphone, since 2018 in rural

89 86 84 82
75
70 68 69

27 25
10 6

a TV programs Internet Mobile Internet OOH Radio Newspaper

(print)
2017 2018
 Online Devices in Rural Vietnam
Similar to Urban, Smartphone is the most popular device to access to the Internet in Rural. However, the other devices in Rural have
significantly lower usage rate compared with smart phone due to limited affordability of rural audience.
Smart phone Smart TV Laptop Desktop

99% 18% 12% 7%

Currently owned

Used to access the Internet

Smartphone is definitely the key device to go online in Rural. It’s noteworthy that accessing
internet via TV - screen is also quite common in this region, which spend around 160 minutes
to be online per day.
65% use
smartphone only
Average time spent online Number of device online
35% Smartphone
2.7Hour per day 1.48 per person with another device

Sources: Infocus
 Internet acceleration in Rural Vietnam

Internet penetration in rural Vietnam is of people in rural Vietnam have

now very high 77% Internet access, of which 91%

access the Internet daily

% of searches from Rural Vietnam:

The Internet is an enabler for rural
consumers: they can access online
resources relevant to their needs 70% 79% 76%

Online shopping Entertainment Health & education

Sources: Consumer Barometer, Vietnam; Cốc Cốc Data, Vietnam, H1 2020

 Rural People Thrive For Connecting
Limited offline entertainment Friends/ Relatives studying/
Routine & Slow pace of life Distant neighborhood
LIVING CONTEXT

activities working in urban

Aspire of urban lifestyles Phobia of being lagged behind

EXPECTATION

Thirst for small happiness to delight their Desire to connect & catch up with what’s going on
daily routine in urban lives

ONLINE ACTIVITIES HAVE BECOME THEIR ASPIRATION TO AIM FOR MORE COMFORTABLE AND EXCITING
LIFE AS WELL AS KEEP THEMSELVES INFORMED ABOUT DAILY LIVES
Heading Towards Expectation Through Mobile Activities
Rural consumers having slightly higher penetration of social media browsing and watching video

Weekly usage using mobile phones %

Source: Infocus
 And Sharing With Online Communications
Average time spent on daily online Chatting website/ apps as Top 5 positive factors in advertising content/
communication news update source format

65 MINS per day 28% update news Informative 54%

Key characteristics on daily online communication Humorous 53%

Sincere Relevant to my need 50%

Authenticity Straightforward
message and Fun music 43%

Simplicity
simple steps
Short & concise 41%

Source: Adtima & Kantar Millward Brown – Rural Online study 2018
 Search Is Another Top Information Source
for online rural consumers across popular categories

% of consumers using Search They also depend on Search to make purchase decisions

apparel 97%

shopping 96%

consumer electronics 97%

entertainment 95% Compare Discover Validate

products and brands unknown products purchase decision
jobs and education 93%

food and cooking 93%

Source: Google
OTHER SUPPORTS FOR
RURAL DEVELOPMENT
 Mobile Data & Infrastructure
Joint Development from local brands
4G widespread (Vsmart x Viettel)

Viettel to set up 12,000 4G base transceiver stations since The fact that VinSmart joined hands with businesses to
2015 in rural areas across Vietnam. develop the national smartphone model - Vsmart Bee Lite
shows the efforts in realizing the aspirations for
The 4G network will first offer services in communes, technology popularisation.
followed by districts, provinces and cities.
In particular, popularising smartphones is the first step
towards 4G and 5G coverage as well as creating the
foundation for the national digital transformation
program, especially for rural development.

Source: Vietnam Plus, Online Press

Great potential for E-commerce growth
E-commerce payment method split by value
GREATLY SUPPORT BY
34%
● The growth of mobile devices & network
22% 19% 19%
● Payment system (cards, e-wallet)

6%
BUT BARRIERS REMAIN
Bank Digital
Card Other Cash
transfer Wallet
● Barriers to Vietnam’s e-commerce growth include relatively underdeveloped
infrastructure to support both the digital processes involved with e-commerce and
Preferred e-commerce methods
also physical transport and delivery infrastructure to complete orders.
● Vietnam has rural and mountainous regions currently underserved by e-commerce $3.3 billion
providers, leading to high logistic costs for online merchants who do sell in these
regions.
$1.6 billion $1.7 billion
● Logistics costs are estimated to take 30 percent of revenues in Vietnam for e-
commerce companies. However, Vietnam’s logistics capabilities are improving.
Vietnam jumped 25 places in WB logistics performance index, from 64 in 2016 to 39
in 2018. E-commerce Mobile commerce Mobile commerce
completed on a completed in-app completed on a
Source: JP Morgan Research for Vietnam mobile device browser
COVID-19: ACCELERATING
ADOPTION OF DIGITAL
SERVICES AND CLOSING THE
GAP BETWEEN RURAL AND
URBAN CONSUMERS
Covid on consumer mind across the board, including adjacent topics
Rural consumer care about items impacting directly their daily life
Biggest fears for 2020

Source: Infocus
And it leads to the changes in
rural consumer’s purchasing
behavior

Rural consumers only purchase additional goods

during the pandemic re-outbreak, after a large bundle
shopping for Tet.

Source: Kantar World Panel, Covid Impact in Vietnam

 And making them to reconsider their wishlists
● Preparing for “pandemic”: home care and personal care; immunity booster; other convenient necessaries.
● Increasing shopping frequency for packaged food or packaged products.

Dropping out list Stocking up list

1. PERSONAL & FAMILY HYGIENE 2. IMMUNE-BOOSTING PRODUCTS

Candy -58% Bathroom Cleaner 86% Milk Powder For Kid 65%

Soft Drinks -46% Showering gel 74% Drinking Yogurt 17%

Biscuits -40% Bar Soap 66%

Beer -32% Hair Conditioner 58% 3. CONVENIENT FOODS & NECESSITIES

Liquor -24% Insecticide 45% Instant Noodle 27%

Fruit Juice -21% Table Napkins 17% Canned Fish 16%

Soya Milk -16% Floor Cleaner 14% Packaged Bread 16%

Source: Kantar World Panel, Covid Impact in Vietnam

 They also keep eyes on e-commerce & delivery services

Usage of e-Commerce before, during and after COVID-19 Consumer sentiment on the change in usage of Food
lockdown, indexed to pre-COVID-19 levels Delivery, indexed to pre-COVID-19 level

2.0

1.6
1.4
1.2
1.0 1.0

Before During After Before During After

 Shift in mindset with accelerating new trends as a
result

Ecommerce Online Media Financial Services HealthTech EdTech

Marketplaces Advertising Payment
Malls Gaming Remittance
Direct to Consumer Video on Demand Lending
Music on Demand Insurance
Investing
Trending this year due to Covid-19

Source: e-Conomy SEA 2020

 COVID: impact on mindset

EdTech: HealthTech:
some missed opportunities, but demand is there clear shift in mindset in line with the challenges
IMPLICATION
Think about rural
consumers for growth

Take into account Empathise with

modernization trends consumers
 ● Cốc Cốc Data, H1 2020

BIBLIOGRAPHY
● Indochina Research, Map Of Vietnam, 2020

● Google’s Year In Search 2020

● Adtima Rural Understanding, 2020

● Kantar World Panel, Rural Fmcg Consumption, 2020

● Infocus, Rural Findings, 2020

● Jp Morgan, E-commerce Research For Vietnam, 2019

● Vietnam Plus, Online Press, 2020