MEETING WITH TAITRA

Prepared by Nielsen Vietnam -

STANDING OUT DURING SLOW-DOWN

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AGENDA

FMCG LANDSCAPE

CATEGORY SNAPSHOT

TAIWANESE BUSINESSES IN VIETNAM

NIELSEN SOLUTION AND CONTACT

1. FMCG LANDSCAPE

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THE ECONOMY KEEPS UP THE GOOD MOMENTUM IN Q2’15

Source: Vietnam General Office of Statistics (www.gso.gov.vn)

H1’15 GDP

+6.28% vs YA, the fastest first-half-of-

the-year growth rate in the past 5 years

H1’15 CPI +0.86% vs YA, still under

control

PETROL AND ELECTRICITY’S PRICE INCREASE slightly bring up CPI

MANUFACTURING sector performed

strongly, +9.5% vs YA

AGRICULTURE

+2.4% vs YA, slower growth may

dampen rural income growth

STABLE FOOD PRICES keeps CCI under control

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# CONCERN

1 HEALTH

2 THE ECONOMY

3 JOB SECURITY

4 INCREASE UTILITY BILLS

5 WORK LIFE BALANCE

…MAINLY DRIVEN BY PETROL PRICE AND ELECTRICITY PRICE INCREASE

21390 19930

17570 15670

17280

20430 21710

Q1 2015 Q2 2015

PETROL PRICE (RON 92) – NOV’14 – JUN’15

SINCE 16.03.2015, ELECTRICITY

PRICE INCREASE FOR 7.5%

TOP 5 CONCERNS IN VIETNAM

DECREASE IN RANKING

INCREASE IN RANKING

THE SAME IN RANKING

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-2.8%

1.0%

-1.2% -2.3%

-5.2%

-1.9%

1.1%

0.5% 2.9%

0.0% 0.5%

2.3% 2.4% 1.4%

-2.0%

0.5%

3.1%

1.8%

3.4%

0.9%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

Unit value change Volume change Nominal growth

AFTER A STRONG TET SEASON, FMCG STAGNATES IN Q2’15 WITHOUT VOLUME GROWTH

Source: Nielsen Retail Index – Versus year ago

FAST MOVING CONSUMER GOODS DYNAMICS – TOTAL 6 CITIES

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GROWTH IS UNDER EXPECTATION ACROSS APAC

Soủrce: Nielsen Growth Reporter Q2 2015

FMCG GROWTH RATE

Volume > Value Growth Volume = Value Growth Volume < Value Growth

FMCG Volume Growth Rate (in%)

Q1 2015 Q2 2015 Avg. (Q1 2015

& Q2 2015)

INDONESIA 0.3% 2.5% 1.4%

VIETNAM 3.4% 0% 1.7%

HONG KONG 2.2% 1% 1.6%

THAILAND 4.3% 4.5% 4.4%

INDIA 5.2% 7.4% 6.3%

CHINA 0.9% -0.5% 0.2%

AUSTRALIA 0.3% 1% 0.7%

TAIWAN -1.2% 0.1% -0.6%

SINGAPORE 1.4% 3.6% 2.5%

KOREA -1.6% -0.3% -1%

PH 3.6% 2.2% 2.9%

NZ 2.8% 1.9% 2.4%

MY 3.9% -0.4% 1.8%

JAPAN -3.4% 5.5% 1.1%

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9

35

39

39

44

78

32

35

35

45

73

Out of homeentertainment

Home Improvements/Decorating

New clothes

Holidays / vacations

Putting into savings

Q2 2015 Q1 2015

VIETNAM IS STILL IN THE TOP 10 MOST OPTIMISTIC COUNTRIES GLOBALLY In Q2 2015, Vietnamese consumers are spending less on some non-essentials

TOP 10 MOST OPTIMISTIC - CCI Q2 2015

Source: Nielsen Asia Pacific Consumer Confidence Index – Q2’15 Note: Q: How to utilize spare cash after covering essential living expenses All respondents who answered Yes to Q11 (1 Code) n=506

SPENDING STRATEGY - CCI Q2 2015

OOH

CHANGE VS Q1’15

INDEX COUNTRY

+1 131 INDIA

+7 122 PHILIPPINES

-3 120 INDONESIA

+6 112 DENMARK

-3 111 THAILAND

-7 108 UNITED ARAB EMIRATES

+1 107 CHINA

-2 105 SAUDIA ARABIA

+1 105 HONG KONG

-8 104 VIETNAM

DECREASE INCREASE THE SAME

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WHILE TAIWANESE IS SKEPTICAL ABOUT THE MARKET, THOUGH BEING IMPROVED

2. CATEGORY SNAPSHOT

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VULNERABLE GROWTH FOR MAJOR COMMODITIES Similar pattern with Vietnamese market when alcoholic beverage posed strong growth

Source: Taiwan Retail Audit dat a– ending Aug’15

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16%

38%

15%

BEVERAGE MILK BASE FOOD

Unit Value change Volume change Nominal growth

DIFFERENT PICTURE AMONG SUPER GROUPS. BEVERAGE(INCL. BEER) PROVES TO BE THE STAR

Source: Nielsen Retail Index – Versus year ago

-2.5% -2.8%

-0.9% -4.4%

5.2%

-2.5% -3.9%

2.5%

8.2% 9.7% 9.6% 6.7%

-2.4% -0.5%

-0.6%

-0.1%

-3.0%

-3.5%

SUPER CATEGORY CONTRIBUTION AND GROWTH – TOTAL 6 CITIES

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CIGARETTE PERSONAL CARE HOME CARE BABY CARE

Unit Value change Volume change Nominal growth

WHILE IT IS CHALLENGING FOR THE REST

Source: Nielsen Retail Index – Versus year ago

0.7% 3.0%

4.5%

-0.6% 3.4%

-0.3% 0.0%

0.8%

5.6% 3.9%

7.1%

2.1% -2.0% -2.2%

-2.8%

-5.2% -4.8%

-4.0%

12.8%

4.3%

0.6% -10.8%

-11.2%

-5.9%

6% 9% 13%

4%

SUPER CATEGORY CONTRIBUTION AND GROWTH – TOTAL 6 CITIES

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1.1%

3.5%

-1.5%

2.1%

4.6% 4.1% 3.7%

1.6%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

Total Urban

Unit Value change Volume change Nominal growth

Source: Nielsen Retail Audit – Versus year ago Note: This slide only includes Feminine Protection, Hair Conditioner, Shampoo, Toothpaste, Toothbrush, Personal Wash, Dishwashing Liquids, Fabric Softener, Laundry Products, Bouillon-MSG, RTDM, Soft Drink, Packaged Water, Energy Drink, RTDT, Cigarette, Sport Drink and Sweet Condensed Milk

RURAL SHOWS BETTER GROWTH THAN URBAN IN THE LAST 2 QUARTERS

-0.2%

1.5%

-4.0%

-1.9%

0.2%

-0.7%

3.5% 2.7%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

Total Rural

FAST MOVING CONSUMER GOODS DYNAMICS – URBAN vs RURAL

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AND 11/18 CATEGORIES HAVE POSITIVE GROWTH RATE IN RURAL, PROVING THE RURAL POTENTIAL Especially Beverage super group and small categories

54%

Rural

Urban

CATEGORIES’ VALUE GROWTH IN RURAL – H1 2015 vs YA VAL URBAN vs RURAL – MAT TY

Source: Nielsen Retail Audit Note: This slide only includes Feminine Protection, Hair Conditioner, Shampoo, Toothpaste, Toothbrush, Personal Wash, Dishwashing Liquids, Fabric Softener, Laundry Products, Bouillon-MSG, RTDM, Soft Drink, Packaged Water, Energy Drink, RTDT, Beer, Cigarette, Sport Drink and Sweet Condensed Milk

BEVERAGE FOOD MILK BASED PERSONAL CARE HOME CARE

68%

POPULATION FMCG

CIGARETTE

-7.5 -3.3 -2.5 -2.1 -2.0 -1.8 -0.3

0.7 1.8 2.1 2.7 5.2 5.6 6.2 7.0 7.5 8.0

14.5

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

46

46 53 49 47 53

58

47 50 34 49 57 67 46 42 51 63

60

Top 5 fastest growing categories

in Rural

X Rural contribution in total Nationwide – MAT TY

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LOCAL MANUFACTURERS PLAY AN IMPORTANT PART IN RURAL CONSUMER’S LIFE …demonstrating the large opportunity for MNCs in the rural market

Source: Nielsen Retail Audit data

Note: all the number is rounded Local Players = Non-Multi National Companies

CONTRIBUTION OF LOCAL PLAYERS IN RURAL OFF vs URBAN OFF – MAT TY

10%

PERSONAL CARE

30%

HOUSEHOLD CARE

77%

MILK BASE

28%

BEVERAGE

80%

BEER

45%

CIGARETTE

25%

03%

55% 65%

15% 13%

Rural Urban Rural Urban

Rural Urban

Rural Urban

Rural Urban Rural Urban

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KEY TAKEAWAYS FOR VIETNAM

GROSS DOMESTIC PRODUCT H1 2015

+6.28% vs YA

INFLATION H1 2015

FAST MOVING CONSUMER GOODS LANDSCAPE

RURAL HIGHLIGHT

11/18 CATEGORIES GROW POSITIVELY

CONSUMER CONFIDENCE INDEX Q2 2015

104

54% VALUE OF FMCG COMES FROM RURAL

OPPORTUNITY IN RURAL

+0.84% vs YA

TOTAL FMCG IN 6 KEY CITIES IN Q2’15 STAGNATES IN VOLUME GROWTH vs YA AFTER A PICK UP IN TET HOLIDAY RURAL SHOWS A BETTER MOMENTUM vs URBAN IN THE LAST 2 QUARTERS

HEALTH IS THE TOP CONSUMERS’ CONCERN

ECONOMY RANKS SECOND AND JOB SECURITY RANKS THIRD

• IT IS TIME FOR PLAYERS TO JUMP IN RURAL

• WIN RURAL RETAILERS TO WIN IN RURAL

• FOR AN EFFECTIVE AND TARGETED ROUTE TO MARKET, MANUFACTURERS MUST UNDERSTAND WHERE TO FOCUS

3. TAIWANESE BUSINESSES IN VIETNAM

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FACT AND FIGURE ON TAIWANESE BUSINESSES IN VIETNAM FMCG is still non – target sector for Taiwanese investors still promising

Source: Foreign Investment Ministry of Vietnam

Taiwanese investor position in Vietnam (after Japan, Korea)

Top 3 Industries for Taiwanese FDI into Vietnam

Processing/ Manufacturing Real Estate Construction

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NOTICABLE TAIWANESE PLAYERS IN VIETNAM

Business

Status in Taiwan

Status in Vietnam

Rice cake & Flavored Drinks Rice Crackers Food, Dairy and Beverage

Biggest Conglomerate Largest in Rice cake Noticable

Take over Tribeco – leading local Bev company Perform in Noodle, Beverage mainly limited share

<1pt share, focus on Modern Trade channel only

Not yet developed

A LOOK AT OUR NEIGHBOR

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TEA PLUS BECAME A SUCCESS STORY RIGHT AFTER SUNTORY-PEPSICO JOINT VENTURE

• Became JV since April 2013 • Launched Tea+ in August 2013: became the innovator of Tea category

with Oolong flavor • Emphasizes on 3 key benefits: Japanese quality, a ranges of health

benefits, and a premium image • Utilize Pepsi’s sale force to expand distribution quickly

251% GROWTH AUG-DEC’14 VS. AUG-DEC’13

8.6

VOLUME % SHARE IN FEB’15

0

10

20

30

Aug-13 Feb-14 Aug-14 Feb-15

Tea Plus – Nationwide

Numeric Distribution

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VINA ACECOOK ALSO SHARE SIMILAR SUCCESS STORY

• Started to operate as a JV in 1993 • Launched Hao Hao in 2000 – a breakthrough in the Vietnam

Instant Noodles category • Emphasizes on product quality

24.2% VOLUME % SHARE IN 2014

#1 DIAPER BRAND IN VOLUME SHARE

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WHAT ARE THE KEY SUCCESS FACTORS FOR JAPANESE JOINT VENTURES

INNOVATOR / TREND-SETTER OF THE CATEGORY

JAPANESE QUALITY / HIGH-QUALITY PRODUCTS

UTILIZE & LEVERAGE LOCAL STRENGHTS TO SUCEED

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WHAT THERE FOR TAIWANESE BUSINESSES?

TRANS – PACIFIC PARTNERSHIP GOLDEN TIME FOR INVESTMENT ON FMCG

DRIVE CONSUMER – DRIVEN BUSINESSES ON PRODUCT QUALITY, INNOVATION

EXPAND DISTRIBUTION VIA M&A, PARTNERSHIP WITH LOCAL COMPANIES

4. NIELSEN SOLUTIONS AND CONATCT

Prepared by Nielsen 2015

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• Ho Chi Minh Head Office

• FW Offices in top 6 cities in Vietnam

• The biggest in-house FW in Vietnam. Local employees based in most of provinces in Vietnam

• Company size: ~2000 employees

• Apx. 2 millions consumer and audit interviews annually

This means...

• We can offer full national coverage both urban & rural

• We have the capacity to take on any project large or small

* Employee data as of 2013

Cantho

Ho Chi Minh

Danang

Hanoi

Haiphong

Nhatrang

CAPABILITY: IMPLEMENTATION IN VIETNAM

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OUR CLIENTS RANGE FROM BIG TO SME

FMCG | Finance | Automotive | Technology | Pharmaceuticals and More

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OUR ROLE AS ONE NIELSEN

•Track / analyze performance

•Market trends

•Manufacturers’ SWOT

•Execution Excellence

•Sales planning

•Optimal Route to the Market

•Quantify the proportion of consumer with this type of behavior

•Understand the “what”, “when” and

“why”

Qualitative Services

Quantitative Services

Retail Measurement

Services

Sales Force Activation

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END – TO – END SOLUTION Nielsen supports client to make decision at each stage of their product cycle from understanding market to setting KPIs for product launch and monitoring

CONSUMERIZATION:

Identify and segment most profitable consumers to unlock demand and inform the Path to Performance

PERFORMANCE MEASUREMENT:

Activate plans through superior sales execution

INNOVATION:

Develop, price, and promote new products

MARKETING EFFECTIVENESS:

Engage consumers through effective and efficient marketing

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NIELSEN CONSULTANCY TEAM

Pham, Thi Mai Lan Senior Manager, Business & Research Consultant Nielsen Vietnam Mobile +84 909 379 094 Email : lan.pham@nielsen.com Website : www.nielsen.com/vn Ngo, Dang Bao Tram Manager, Retail Measurement Service - Nielsen Vietnam Mobile +84 983 376 522 Email : tram.ngo@nielsen.com Website : www.nielsen.com/vn

THANK YOU