Retail trend & marketing strategy 2017 Jakarta

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TODAY’S PRESENTER Yongky Susilo

Yongky Susilo serves as Executive Director of Nielsen Indonesia based in Jakarta. He has more than 20 years of experience in marketing, sales, business development and research across the retail and manufacturing industries. Yongky is one of the today’s leading experts on consumer attitudes and behavior, prominently and frequently featured in the nation’s major media. He is a professor at MM University of Indonesia, ex Senior Academic Advisor University Bunda Mulia and book author of RETAIL RULES and expert editor of Retail Indonesia magazine. Yongky earned an BSC from California State University of Fresno, USA.

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Market Next decade shift

Consumer Next decade DNA

Channel Next decade place

INDONESIA

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Logically during time of difficulties, consumer will...

Restraining Mode

Less Channel

Less Frequency

Less Basket

Less Impulse

Down Trade

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Nielsen forecast 2016 growth

10,6

7,0

18,0

8,0

Indonesia

MT Hyper/Super

MT Mini

Traditional Trade

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So it’s not a V trend, it’s a …

W

Market has slow down twice

2015 : High inflation Tax TERRORISM

2016 : Tax TERRORISM

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Fast Moving Consumer Goods market dynamics

-2.2%-0.3%

3.4%

0.1% 0.2% -0.1% 0.6% 0.1%1.6% 2.3% 1.6% 2.4%

5.1%

1.3% 1.1%

-1.3%

3.1% 3.1% 3.6% 3.0% 4.8%3.1%

2.7%5.4%

5.4%

6.2%

-1.0%

0.8%

2.0%3.2% 3.3% 3.5% 3.6%

5.0% 4.7% 5.0%

7.0%7.8%

11.3%

Unit value change Volume change Nominal growth

Yet, Indonesia is still the growth leader (q1 2016)

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0.8% 0.7% 0.7% 0.0%1.1% 0.3% -0.3%

2.5%1.6% 1.0% 1.1% 1.7%

4.3%

-2.9%

-0.7% -0.6%1.3%

0.6% 2.2% 3.1%

1.4% 2.7% 4.8% 5.2% 4.7%

4.9%

-2.1%

0.0% 0.0%

1.2%1.7%

2.5% 2.8%

3.9%4.4%

5.8%6.3% 6.4%

9.2%

Unit value change Volume change Nominal growth

Note: This report currently excludes Malaysia due to data issues from retailers. Will be updated in mid September

Q2 16 STILL HIGHEST

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MARKET PERFORMANCE IN Q2 AND Q3

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0,1

18,0

Super/Hyper

Minimarket

Retail Audit Indonesia Total Grocery | Total 55 FMCG Categories | YTD Jun 2016 vs YTD Jun 2015

H1 ALL CHANNELS PERFORMED AS PREDICTED, EXCEPT SUPER HYPER

10,2

11,4

9,4

Indonesia

Modern Trade

Traditional Trade

10.6

8

18

7

forecast

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Retail Audit Indonesia Total Grocery | 55 FMCG Categories | % Val Growth vs YA| YTD Sep 2016 vs YTD Sep 2015

Q3 IS WEAKER THAN H1

9,0

9,5

8,6

Indonesia

Modern Trade

Traditional Trade

-1,1

15,4

Super/Hyper

Minimarket

10.6

8

forecast

18

7

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9,8 4,5

11,2 10,8 11,2 10,2 9,5 9,1 8,7 5,4 7,1 7,1 6,3 6,0 5,3 5,0 5,0 4,5 4,0 3,9 4,4 3,4 4,0

2,0

4,5

-0,1

0,6 0,6 1,0 1,8 5,5 6,9

1,6 3,8 5,0

3,8 5,1 8,3 8,1 2,6 5,2 6,1

3,8 1,6 5,0 1,8

11,8 9,0

11,1 11,4 11,8 11,2 11,2

14,7 15,6

7,0

10,9 12,2

10,1 11,1 13,6 13,1

7,6 9,6 10,1

7,7 5,9

8,5 5,8

Growth rate is decelerating by months

Indonesia 55 Cats

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VOLUMES GROWTH DIMINISHING MARGIN IN INDO Increase in 2016 volume growth led by strong promotional trends though quarterly volume is decreasing

9,4%

8,3%

4,5%

6,9%

9,0%

10,6% 10,8% 10,5%

9,1%

7,2%

6,1% 5,1%

4,2% 4,1%

1,1%

2,2%

4,5%

3,4%

0,8%

0,1% 0,3%

0,3% 2,5%

2,8%

3,8% 6,2%

4,9%

2,6%

10,5% 10,5%

9,0%

10,3% 9,8%

10,7% 11,1%

10,8%

11,6%

10,0% 9,9%

11,3%

9,2%

6,7%

2014 2015 2016 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3

Unit value change Volume change Nominal growth

INDONESIA | Packaged FMCG Growth Rates

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9,3 4,5 5,3 5,0 5,0 4,4 4,0 3,9 4,4 3,4 4,0 3,6

2,4

4,2 8,3 8,1

2,6 5,2 6,1 3,8 1,6 5,0 1,8 2,0

11,7 8,6

13,6 13,1

7,6 9,7 10,1

7,7 5,9

8,5 5,8 5,5

Total Indonesia General Trade | 55 Categories

Total Indonesia Modern Trade | 55 Categories

Total Indonesia Market | 55 Categories

INDONESIA GROWTH REPORTER YTD OKT-16

6,6 3,9 3,2 2,9 3,9 3,6 3,3 2,0 3,9 2,3 3,4 2,7

3,6 5,4

14,4 8,9

2,2 6,3 7,0 11,1

2,3 4,1 2,4 4,8

10,3 9,3

17,6

11,7

6,1

9,8 10,3 13,1

6,2 6,4 5,8 7,5

11,4 4,8 6,6 6,3 5,3 5,1 4,6 4,0 4,0 4,1 3,9 3,9

1,9

3,3 4,3 7,7

3,1 4,4 5,5

-0,1

1,6 6,0

2,0 0,3

13,4

8,2 11,0

14,0

8,4 9,5 10,0

3,8 5,6

10,1

5,9 4,2

YTD Okt-15

YTD Okt-16

Jan-16 Feb-16 Mar-16 Apr-16 Mei-16 Jun-16 Jul-16 Agt-16 Sep-16 Okt-16

Retail Audit

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6,6 3,9 3,2 2,9 3,9 3,6 3,3 2,0 3,9 2,3 3,4 2,7

3,6 5,4

14,4 8,9

2,2 6,3 7,0 11,1

2,3 4,1 2,4 4,8

10,3 9,3

17,6

11,7

6,1

9,8 10,3 13,1

6,2 6,4 5,8 7,5

Indonesia MT Hyper/Super | 55 Categories

Indonesia MT Minimarket | 55 Categories

Total Indonesia Modern Trade | 55 Categories

MT GROWTH REPORTER YTD OKT-16

7,0 4,4 4,0 2,7 3,7 3,6 3,1 1,9 4,7 2,6 4,0 2,7

4,7 10,3 17,8 17,2

11,1 13,5 11,9 17,4 9,5 5,5

6,2 6,2

11,7 14,7

21,7 19,9

14,8 17,1

15,0 19,4

14,2

8,0 10,3 9,0

5,2 2,0 0,7 0,3 0,9 1,2 1,8 -1,0 1,8 1,0 1,5 1,0

2,6

-2,6

9,3

-1,9 -9,6

-3,5 -0,2 2,8

-10,3

2,0 -4,4

3,5 7,8

-0,6

10,0

-1,6

-8,7

-2,4 1,6 1,8

-8,5

2,9

-2,9

4,5

YTD Okt-15

YTD Okt-16

Jan-16 Feb-16 Mar-16 Apr-16 Mei-16 Jun-16 Jul-16 Agust-16

Sep-16 Okt-16

Retail Audit

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Sumatra 6.2%

Java 9.0%

Kalimantan 11.9%

Sulawesi 15.7%

Bali&Nusra 9.8%

16.2

69.7

4.3

4.6

5.2

growth

Contribution

EAST INDONESIA SHOWS PROMISING GROWTH

INDONESIA

9.0%

Retail Audit Indonesia Total Grocery | Total 55 FMCG Categories | YTD Sep 2016 vs YTD Sep 2015

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Superstar 2016

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This year growth Super STAR is BEVERAGE categories in MT

Total Country Key Accounts| Total 113 FMCG Categories | YTD Jun 2016 vs YTD Jun 2015

10,8

5,6

8,2

1,1

3,8

2,9

18,4

0,4

2,4

-6,9

Average Price Increase

13,7

12,3

0,6

19,5

7,5

15,5

-14,7

17,8

10,9

18,1

26,0

18,6

8,8

20,8

11,5

18,8

0,9

18,2

13,6

10,0

Mineral water

Toilet Soap

Shampoo

Tea-RTD

Cologne

Detergent

Chocolate

Sweetened Condensed Milk

Toothpaste

Carbonated Soft Drink

Volume Growth %

Value Growth %

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Total Country Key Accounts| Total 113 FMCG Categories | YTD Jun 2016 vs YTD Jun 2015

Liquid milk vol growth hit double digit

5,6

6,4

37,4

25,0

14,1

2,7

3,8

11,1

15,8

6,6

7,8

17,5

35,9

30,2

20,9

12,7

8,3

20,0

22,8

8,4

Powder Milk

Cigarette

Cooking Oil

Biscuit

Baby Diapers

Instant Noodles

Skincare

Liquid Milk

Snack

Ice Cream

Volume Growth %

Value Growth %

2,1

10,4

-1,1

4,1

6,0

9,7

4,4

8,0

6,1

1,7

Average Price Increase

Scan Track

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PERTUMBUHAN DI MARKET DENPASAR GREATER LEBIH BANYAK DIDORONG OLEH PERTUMBUHAN VOLUME

5,3

-2,0 3,4

0,9 2,3 4,0 1,5 5,1 4,9

-0,4

23,8 33,4 21,8 27,0

27,7 28,9 31,5

15,5 20,8

36,3

29,1 31,5

25,2 27,9

30,0 32,8

33,0

20,5

25,7

35,9

YTD Sep 16 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16

DENPASAR GREATER MT KA+INDEPENDENT

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`

FOOD CATEGORIES BERTUMBUH DENGAN PESAT DI DENPASAR GREATER MT KA+I

113 Cats

29.1

Food 32.7

Non Food

25.8

Ready to Drink

36.7

Indulgences

26.7

Dry Food

26.4

Retail Audit Denpasar Greater MT KA+I | 113Cats | YTD September 16* *W/E 18/09/16

` Cooking & Seasoning

43.8

` Breakfast

25.3

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TOP 10 CATEGORIES

Denpasar Greater MT KA + Independen Vs. Hardys| Growth| YTD September 2016*

Cont Value

Growth

Volume

Growth

1. Cigarette 16.0 21.1 9.6

2. Powder Milk 5.9 17.9 14.8

3.

Alcoholic Beverages 5.6 34.5 25.4

4. Mineral water 4.3 48.7 32.5

5. Cooking Oil 3.7 56.2 61.2

6. Snack 3.6 33.3 26.4

7. Biscuit 3.5 28.2 21.8

8. Skincare 3.5 18.2 12.0

9. Liquid Milk 3.1 36.4 28.0

10. Instant Noodles 3.1 45.4 37.6

Denpasar Greater MT KA + Independen 29.1%

Powder Milk is growing even slower in Hardys, while Skincare & Cooking Oil are growing better in Hardys compared to market

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TOP 20 CATEGORIES

Denpasar Greater MT KA + Independen Vs. Hardys| Growth| YTD September 2016*

Cont Value

Growth

Volume

Growth

11. Tea-RTD 2.5 32.3 29.1

12. Chocolate 2.5 23.4 4.1

13. Ice Cream 2.4 22.0 18.1

14.

Carbonated Soft Drink 2.2 22.6 28.0

15. Baby Diapers 2.1 18.8 15.0

16. Juice 1.9 39.9 59.8

17. Shampoo 1.7 36.9 41.5

18. Toilet Soap 1.6 30.3 24.5

19. Isotonic Drink 1.5 38.2 30.6

20. Cologne 1.4 21.1 18.9

Denpasar Greater MT KA + Independen 29.1%

Baby Diapers & Cigarette is growing slowly in market but even slower in Hardys. On the other hand. Our cologne & CSD

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High growth brands within top 5

17.1% 12.7%

9.1% 7.8%

18.7% 13.6%

28.9% 19.6%

44.7% 39.5%

45.4% 35,7%

44.1% 48.1%

25.8% 16%

59% 46.2%

40% 29.3%

105.8% 73.2%

July 2016

WHATS NEXT ?

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39.3T 48.7T 54.9T 57.3T 67.7T 3000000

3500000

4000000

4500000

5000000

5500000

6000000

0

20

40

60

80

100

120

2012 2013 2014 2015 2016

Adspend Number of Spot

Source: Nielsen Advertising Information Services (AIS) 2012 – 2016

Commercial product ad spending on TV & print based on gross rate card (doesn’t calculate discount, promo, bonus, etc.), in Rp Trillion

1ST SEMESTER ADEX SHOW STRONG GROWTH

TOTAL ADSPEND TV & PRINT JANUARY – JUNE 2016

22%

11% 4%

15%

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QUARTERLY ADEX GROWTH IS FIRMLY SHOWING POSITIVE MOVEMENT IN 2016

Source: Nielsen Advertising Information Services (AIS) 2012 – 2016

Commercial product ad spending on TV & print based on gross rate card (doesn’t calculate discount, promo, bonus, etc.), in Rp Trillion

18,1 22,3 25,6 25,5 31,5

21,4 26,7

29,8 31,9 36,2 22,2

26,3 28,1 29,2

32,0

22,7

27,1 26,8

31,4

2012 2013 2014 2015 2016

Q4

Q3

Q2

Q1

19%

25%

23%

19%

21%

7%

12%

-1%

8%

7%

4%

17%

7%

13%

14% -1% 24%

10%

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TV DOMINATES ADEX SHARE AS WELL AS DRIVES GROWTH

39,2

49,8

57,1 62,3

76,6

20,5 23,5 24,3 22,8 21,9

1,7 1,6 1,6 1,4 1,2

2012 2013 2014 2015 2016

TV Newspaper Magazine &Tabloid

Source: Nielsen Advertising Information Services (AIS) 2012 – 2016

Commercial product ad spending on TV & print based on gross rate card (doesn’t calculate discount, promo, bonus, etc.), in Rp Trillion

TV 77%

NPAPER 22%

MAG 1%

+ 23%

Adex Share Jan-Sep 2016

Adex Growth by Media Type 2012 – 2016 (Jan – Sep)

98 titles

120 titles

102 titles

162 titles

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Source: Nielsen Advertising Information Services (AIS) 2012 – 2016

Commercial product ad spending on TV & print based on gross rate card (doesn’t calculate discount, promo, bonus, etc.), in Rp Trillion

TOP 10 CATEGORY TV & PRINT ADEX Jan-Sep

2016 vs Jan-Sep

2015 GOVERNMENT, POLITIC ORGANIZATION

6.0 30%

CLOVE CIGARETTES 4.9 48%

HAIR CARE PRODUCTS 4.3 28%

COMMUNICATION EQUIPMENT, SERVICES

3.5 14%

COFFEE, TEA 3.4 26%

FACIAL CARE PRODUCTS 3.3 23%

SOFTWARE, ONLINE SERVICES (WEB, APP, E-COMMERCE)

3.0 34%

INSTANT FOOD, INSTANT NOODLES 3.0 22%

CORPORATE ADS, SOCIAL SERVICES 3.0 13%

SNACKS, BISCUITS, COOKIES, CAKES 2.6 40%

6 out or 10 in top categories are FMCG

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Q3 : CONSUMER CONFIDENCE IS STILL TOP 3 GLOBALLY

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| Pertambangan 2015: -5,1% 2016: 0,1% 2017: 0,1%

| Pertanian 2015: 4,0% 2016: 3,9% 2017: 3,9%

| PDB 2015: 4,8% 2016: 5,2% 2017: 5,3%

| Industri 2015: 4,3% 2016: 5,2% 2017: 5,4%

| Listrik dan Gas 2015: 1,2% 2016: 2,3% 2017: 3,8%

| Perdagangan 2015: 2,5% 2016: 3,4% 2017: 3,8%

| Transportasi 2015: 6,7% 2016: 6,8% 2017: 7,1%

| Konstruksi 2015: 6,7% 2016: 7,9% 2017: 8,1%

| Infokom 2015: 10,1% 2016: 10,5% 2017: 10,6%

| Jasa Keuangan 2015: 8,5% 2016: 8,5% 2017: 8,9%

GDP 2017 5.3%

33

Indonesia next level 2030

McKinsey, Standard Chartered

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34

Next Decade Shift : URBANization

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INDONESIA ANNUAL PACE +4 PERCENT

ONE OF THE MOST RAPIDLY URBANIZING COUNTRIES IN THE WORLD.

By 2025 : 68 percent

vs 52 percent in 2012 (according to UN projections). Source : WB

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36

MEANS MODERN LIVING FMCG DRIVE THE GROWTH

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Next growth destination: secondary, tertiary, out java area

Source: Mc Kinsey

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38

FMCG Next

ACTION #1

Build stronger existence in secondary and tertiary cities. Basic FMCG Next growth destination is off Mega cities.

Increasing Lifestyle spending in Mega cities

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39

The Next Decade Consumer DNA: C

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The birth of Generation C

Control

Co Creator

Creativity

Content

Channel

Communicate

Community

Conversation

Connected Convenient

Source : Dan Pankraz

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41

THE NEXT INDONESIAN: DEMAND LIVING BETTER

Megatrends:

Convenience

Healthy

Feeling Good/ Looking Good

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LARGE MARKET OF MIDDLE CLASS … DEMANDING CONVENIENCE

Educated and

working women

Convenience

Modern retailing

Products and service that SAVE TIME

Eating outside home

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43

Man also wants to look awesome, cool, and handsome these days

Feeling Good

Male Cologne +15.3%

Male Hair Styling +10.4%

Male Skincare +33.9%

Male Razor Blade

+18.9%

The Next decade Indonesian male

I imagine …

I love …

44

Middle and Low class are still keen on basic FMCG, while Upper class go for lifestyle

Source: Nielsen Home Panel Data, Additional Spending Report Q1’14 vs. Q1’13

(1) Rice

(22) Fruit/Veg

(16) Meat/ poultry

(7) Fish/ seafood

(12) Transport

(7) Electric

(6) FMCG

(5) Telco

(11) Dine out/ent.

(8) Saving

(11) Vacation

(10) Insurance

(1) Loan

Spending Component Upper Middle Lower

3

23

18

6

13

10

0

7

18

10

19

21

-3

Seco

nd

ary

1

23

15

14

11

9

13

4

9

17

7

-2

30

0

21

20

-2

16

-3

4

5

-2

-10

-19

16

Pri

mar

y Te

rtia

ry

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45

THE NEXT FOOD : READY TO EAT FOOD

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46

INDULGENCE + CONVENIENCE + FRESH HEALTHY

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47

REAL TIME MARKETING

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48

ONCE AGAIN: INTUITIVE, PERSONAL, ANYWHERE/TIME, CONVENIENT

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49

THE RETAIL ASPIRATIONAL DEVELOPMENT MOVING FROM QUALITY & PRICE TO QUALITY & EXPERIENCE

Street market & Supermarket

Hypermarket/Minimarket /Fastfood

Local Department Stores

Malls

Consumer Durables

Licensed Brand Fashion

Lifestyle, Fashion & Accessories

Culinary F&B Diversity

Indoor/Outdoor Shopping Streets

International Brand Retailing

Luxury Brands

Adventures

Quality & Experience

Quantity & Price

Convenience Resto

Entertainment

Sports

Co

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CUSTOMER INSIGHTS

Aspirations

Wants

Needs

Distinguishers

Differentiators

Must Dos

Energisers Suprising people memorably

Enablers Enabling people to do more

Essentials Delivering what is expected

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51

Copyright © 2016 The Nielsen Company. Confidential and proprietary.

WAVE 1 PRODUCER POWER

PRODUCTION DRIVEN

WAVE 2 ECONOMIC GROWTH

MARKETING-DISTRIBUTION DRIVEN

WAVE 3 TRANSFORMATION

• Battle for market share • Instant, unlimited selection • Demand Experience • Custom over mega brands • Immediate availability • Novelty • Community interest

CONSUMER POWER

BREAK USD 2,000

BREAK USD 3,000

BREAK USD 4,000

BREAK USD 1,000

Sources : BPS

86 87 88 89 90 91 92 93 94 95 96 97 98 99 '01 '02 '03 '04 '05 '06 '07 '08 '09 10 11 12 13 14 15 16

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52

The Next Decade Driver: imagination

Imagination is more important than knowledge Albert Einstein

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53

CREATE “THE POSSIBLE SERVICE” , DON’T JUST CREATE WHAT THE MARKET NEEDS OR WANTS

CREATE WHAT IT WOULD LOVE

Keunggulan Kreatif

Keunggulan yang melebihi norma

Value yang tidak tersedia di pesaing

Nilai yang dalam tingkat yang tinggi

MENJADI LUAR BIASA

Co

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55

ALL ABOUT TICKET TO IMAGINATION AND SURPRISES

Airline Noodle Bong Kopitown

Dream Cars The Lab

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56

NUTTELLA IMAGINATION

Co

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NGE BASO KAPAN SAJA, DIMANA SAJA

SURPRISE DARI LANGIT

IMAGINASI NGE BASO, MAKANAN FAVORIT

Co

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58

BREAD & TEA ARE HIGHEST SPEND, YET BARCODED COFFEE & JUICE ITEMS HAVE A LOT OF POTENTIAL

Spending in ‘000 IDR

Nielsen Out of Home Panel

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59

HOW YOU CREATE POSSIBLE SURPRISE THAT KIDS AND FAMILY LOVE …

POWDER FORMAT

Co

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INTUITIVE AND CONVENIENT

SPREAD FORMAT

bread

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HOW YOU CREATE POSSIBLE SURPRISE THAT KIDS AND FAMILY LOVE …

CONDENSED LIQUID FORMAT

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INTUITIVE AND CONVENIENT

SCM SLICE FORMAT

SPREAD FORMAT

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More Convenient Anytime, anywhere

HOW YOU CREATE POSSIBLE SURPRISE THAT KIDS AND FAMILY LOVE …

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IMAGINATION DRIVEN CONSUMER

BEFORE AFTER

Product or Service that Surprise the customer !

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CONSUMER WANTS A MAKEOVER

BEFORE AFTER

CREATE “THE POSSIBLE SERVICE” , DON’T JUST CREATE WHAT THE MARKET NEEDS OR WANTS

CREATE WHAT IT WOULD LOVE

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ACTION #2

Think outside-in. Need-wants-imagination States, Consumption Moments/Occasion Innovate or renovate where categories will merge and morph Products that delights, surprise and build value to consumers

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The Next Decade Place: PROXIMITY

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TRUE ALSO FOR ASIA AND OTHER CONTINENTS

Source: Retail Index

ASIA

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69

The group said that the milestone was a reflection of how consumers are increasingly looking to shop little and often, rather than focusing on one weekly shop.

UK: Sainsbury’s To Open 60 C-Stores In London And The South East

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82.9 82.1 81.5 80.7 80.4 80.8 79.8 77.3 77.0 76.7 76.8 75.1

13.7 14.2 14.5 14.2 12.6 11.6 11.411.4 10.4 10.4 8.1 8.0

3.4 3.7 4.0 5.1 6.9 7.7 8.8 11.3 12.6 12.9 15.1 16.9

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Traditional Stores Super/Hypermarket Minimarket

Trade Channel Contribution | Total 56 Categories – including cigarette | 2011

17.1% 24.9%

A QUARTER SHARE IS BECOMING TWO THIRD (INDONESIA)

2023 30%

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Co

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71

SHOPPERS ARE DOING MAIN SHOPPING MORE FREQUENT

More of shoppers are doing more frequent main grocery shopping, and it is indicated that daily top ups are reduced

5

39

26

30

Every 2 weeks

Every month

Less Often

Weekly

MAIN GROCERY SHOPPING

15

18

59

2011 result

Shoppertrend 2014

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HIGHER MAIN SHOPPING FREQUENCY ACROSS SES

Not only a significant proportion of SES B& C1 that has convert their monthly shopping, SES A also display a similar behavior.

0 3 3 6 2 6

65

43

59

38 55

36

15

27

19

27

19

22

17 26

14 28

13

37

2011 2014 2011 2014 2011 2014

Weekly Every 2 weeks Every month Less often Never

MAIN GROCERY SHOPPING PURCHASE FREQUENCY

SES A SES B SES C1

Shoppertrend 2014

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Your fridge and food stock cupboards

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74

Will move on nearby streets

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75

MOVE ONTO NEARBY STORE E-PAYMENTS

AND SO ….YOUR PAYMENT, SETTLEMENT, REMITTANCE

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LOWEST PRICE IMAGE TODAY BELONG TO SMALL FORMAT

Shoppertrend

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14.0

29.5

38.5

11.7

5> USD 20

USD 10 - 20

USD 6 - 10

USD 4 - 6

USD 2 - 4

USD 1.25 - 2

< USD 1.25

high

mid

low

Daily Spending per Capita 2010

Source: SUSENAS and World Bank Calculations

Next Decade spender : Next level middle class

WHAT ARE THEIR

NEEDS WANTS

LOVE

PROXIMITY, QUALITY, RANGE, EXPERIENCE

• Upgrading Capacity towards Next Level Middle Class

• Elevating Experience

• Modern Urban Image

• Convenience with fulfillment

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79

Same …. Walmart TARGET Kroger

• Source: Walmart, MarketWatch, Arkansas Online

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PROXIMITY LOOKING GOOD … SOON

Dan+Dan

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81

ACTION #3

Partnerships with proximity retailers (small formats) ; use their massive distribution network Develop new channels that brings product closer and clearer to consumer (school canteen, modern cosmetic, toko susu etc, tukang sayur etc)

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82

ONLINE : FASHION, TRAVEL AND COSMETIC

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Co

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2012

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nd

pro

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etar

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84

Co

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t ©

2012

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al a

nd

pro

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etar

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85

Co

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t ©

2012

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nd

pro

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86

Co

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87

COSMETICS

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88

Indonesia =

Co

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89

KOREA fast e-commerce progress

48,2

40,3

33,8

28,2

16,2

0

10

20

30

40

50

2010 2011 2012 2013(F) 2014(F) 2015(F)

(KRW Trillion ) Online

Shopping

(29%)

Hypermarket

Department Store

Supermarket

CVS

Source : Statistics Korea, Hanwha investment & securities

2010 2011 2012 2013 2014 2015(F)

Billion USD

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90

e-commerce Key Driver

Cheap price is key for e-comm success, especially during the economic

recession periods (2009~)

Strong smart phone usage(penetration is over 80%),

mobile payment service

Within 1-1.5 day delivery, is the premise

Product Quality guarantee, Korea e-comm took 10 year to reach current

trust level

Co

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91

Sales Growth lead by Travel, Cloth, Electronic

0

500000

1000000

1500000

2000000

2500000

1Q

01

3Q

01

1Q

02

3Q

02

1Q

03

3Q

03

1Q

04

3Q

04

1Q

05

3Q

05

1Q

06

3Q

06

1Q

07

3Q

07

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

3Q

11

1Q

12

3Q

12

1Q

13

3Q

13

1Q

14

Travel & Leisure

Clothes / Acc

Consumer Elec.

Household care

Grocery

Computer HW/SW

Kids / Baby care

Music, Video

Book, Office goods

• Source: Statistics Korea, Korean Statistical Information Service

Consumer Elec

Fashion / Travel

Grocery: 1 bill

2.5 billion USD

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In ASIA :tickets, baby and consumer electronic lead the share

Tickets Baby Care Consumer Elecronics

Hobby / Sports goods

Fashion Homecare / interior

Household / Personal

care

Travel Grocery

77 63

52 48 48 44 38 36 28

23 37

48 52 52 56 62 64 72

Offline On Line

50%

Sales Contribution between On & Off line

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Virtual Store

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94 Instant business