Nielsen QBN Asia Pacific (Q4 2017)

81 Pages·2017·2.07 MB·English

by  Nicole Corbett

ASIA PACIFIC
QUARTER BY
NUMBERS
Q4 2017
Copyright © 2017 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
CONTENTS
THE BIG PICTURE

Message from Laura McCullough………………………………………………....03

ASIA AT A GLANCE

Key economic drivers……………………………………………………...............05

Looking through Asia Pacific FMCG lens…………………………...……………07

COUNTRY SNAPSHOT

Australia……………………………………………………………………………..08

China………………………………………………………………………………...11

Hong Kong…………………………………………………………………………. 14

India………………………………………………………………………………….17

Indonesia…………………………………………………………………………… 20

Japan……………………………..………………………………………………….23

Malaysia……………………………………………………………………………...26

Myanmar………...…………………………………………………………………...29

New Zealand....……………………………………………………………………...32

Philippines…………………………….…………………………...………………...35

Singapore……………………………..……………………………………………...38

South Korea……………………………..………………………………………… 41

Taiwan……………………………..……………………………………………… 44

Thailand……………………………..……………………………………………. 47

Vietnam……………………………..……………………………………………. 50

IN THE INDUSTRY

Store and Chain Banner Universe – annual update…………………………… 53

Copyright © 2017 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
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THE BIG PICTURE
MESSAGE FROM LAURA MCCULLOUGH
Asia Pacific continues to be heralded as a region of opportunity and growth and
across the majority of markets, local economies have fared well in 2017 compared
to 2016. Generally consumers across the region appear to be more confident
throughout 2017 than they were in 2016, buoyed predominantly by increasing
optimism in job prospects and the state of their personal finances.
But while the economic environment might seem favourable, the majority of
Laura McCullough consumers across almost all markets* are trying to curb their spending habits to
FMCG Leader,
save on household expenses, spending less on new clothes, trying to save on gas
Growth and
Emerging Markets and electricity and cutting back on out of home entertainment. But saving on
groceries is also top of mind for one in five (22%) of Asia Pacific consumers, who
are switching to cheaper grocery brands. It is a big issue in the Pacific, with more
than half of Aussies and Kiwis adopting this behaviour. This feeling of
cautiousness in spending continues as savings continues to be a top priority after
people have covered their essential living expenses.
The FMCG industry is feeling the effect of this cautiousness, with offline growth
across the region a mixed bag. While e-commerce is often touted as a major
disruptor stealing consumers dollars from bricks and mortar stores, the story is
not that simple. E-commerce is and will continue to impact our retail landscape
but it’s not a an immediate game changer for all markets. Conditions need to be
right for e-commerce to thrive. While variables will differ by market and no one
market will achieve a perfect score across all measures. It is critical to have the
right foundations and market dynamics at play for e-commerce to grow and
prosper. A number of these variables are cultural or systematic of infrastructure
changes that need to occur and what that means is that offline retail will not be
disappearing anytime soon. So while e-commerce is a “must have” for horizon
planning in the short, medium and long term, it's important not to get too caught up
in the hype and buzz of the press and lose focus on where the majority of your
business rests today. Remembering this varies by market and category!

Understanding What’s Next is mandatory
Disruption is the new buzz word. What we know, is that organisations can’t take
for granted that’s what’s worked in the past, will work in the future.
Vigilance, preparedness and a future focus are no longer “nice to have” ideals of a
few corporate visionaries, but instead have become mandatory practice to ensure
an organisation’s long-term survival.
A recent study has shown** companies with a long-term view outperform their
peers in a number of different areas but the most striking outcome is that they
achieve “47% more revenue than other firms” .
*less so in Hong Kong
**McKinsey Global Institute Measuring The Economic Impact Of Short-termism

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Copyright © 2018 The Nielsen Company
THE BIG PICTURE
Nielsen recently released a new report - What’s Next Starts Now which showcases to
organisations the importance of looking ahead. Identifying and understanding the key macro

change drivers that will impact the future operating environment and importantly the implications of

those changes for society and the industry you operate in, will help your organisation be ready to

face a future of change. Big macro drivers of change in isolation, will not give you the foresight to

see where disruption may come from in the future. Early signals of change or emergence are out

there already, be it a prototype in one market today in a totally different industry to your own, and

these signals may morph and evolve to be a game changer for your company tomorrow.

With such dramatic change in the macroeconomic environment expected across Asia, we are

certain to see some markets moving and maturing faster than others or giving us clues to where

new opportunities may lie. That’s why it’s also so important to look at retail landscapes beyond

your home market, to understand the dynamics at play in those neighbouring or sometimes distant

markets that might may not seem relevant today, but could be tomorrow’s new reality for you. At

Nielsen, we hope Quarter by Numbers can help you look beyond your home borders to see the
opportunities that are out there and how those changing market dynamics are playing out.

Quarter by Numbers now stretches across 59 markets across the world to give you the top line
view on how economies are changing, how consumers are feeling and importantly how your
categories are faring compared to the industry at large.

We hope you enjoy this latest edition and we look forward to bringing you continued insights
throughout 2018.

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Copyright © 2018 The Nielsen Company
ASIA AT A GLANCE
ECONOMIC PULSE OF CONSUMERS
AROUND ASIA PACIFIC
The Nielsen Consumer Confidence Index measures perceptions of local job
prospects, personal finances and immediate spending intentions. Consumer
confidence levels above and below a baseline of 100 indicate degrees of
optimism and pessimism, respectively.
CONSUMER CONFIDENCE INDEX
Q4 2017 Q4 2017
Q4 GDP (% Q4
vs Q3 GDP (% change pa) Inflation Inflation vs Q3
2017 change pa) 2017
2017 2017
INDONESIA 125 -3 5.1 3.5 3.4 1.7 HONGKONG 108 6
AUSTRALIA 91 -3 3.2 1.9 3.3 0.4 TAIWAN 82 2
INDIA 130 -2 7.2 4.6 _ 1.6 NEW ZEALAND 106 2
THAILAND 111 -2 4.0 0.9 3.0 1.5 KOREA 60 2
VIETNAM 115 -1 7.7 2.7 5.9 3.6 MALAYSIA 94 2
CHINA 114 -1 6.8 1.7 3.1 0.5 SINGAPORE 94 1
PHILIPPINES 131 -0 6.6 3.3 2.1 0.6 JAPAN 84 0
CONSUMER CONFIDENCE INDEX
*NZ Q4 GDP is not available
The Asia Pacific region continues to represent significant opportunity
with strong GDP growth and high levels of consumer confidence
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Source: GDP and Inflation reflects % change per annum to Q4 2017 Economist Intelligence Unit (EIU)/local governments where not available in EIU
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Copyright © 2018 The Nielsen Company
ASIA AT A GLANCE
CONSUMER SENTIMENTS IN ASIA PACIFIC
WHAT ARE THE TOP TWO CONCERNS IN THE NEXT SIX MONTHS?
%
Type of concern
60
50
40 46 48
39
30 37
32
20 2826 28 2725 26 26 27
23
20 20 20 20 21
10 17 17 18 16 17 16 17
8 13 13 6
0
APAC AU CN HK ID IN JP KO MY NZ PH SG TH TW VN
Work/life balance The economy
APAC AU CN HK ID IN JP KO MY NZ PH SG TH TW VN
Work/life balance 2 0 _ 0 -1 0 1 1 0 1 1 -1 -1 4 0
The economy -1 0 _ -6 2 2 1 -6 2 0 0 -3 -2 0 -1
Bars reflect Q4 2017. Table shows comparison to Q3 2017
China data not available Q3 2017
WHO’S SPENDING, SAVING AND INVESTING?
%
After living expenses, how is spare money spent
80
70
72
60 64 65 65 67 63 62 61 62 66 63
59 59
50 55
50 50 51
40 45 44 42 43 45 44
30
30 31 30 31
20 26 26 26
10
0
APAC AU CN HK ID IN JP KO MY NZ PH SG TH TW VN
Putting into savings Holidays / vacations
APAC AU CN HK ID IN JP KO MY NZ PH SG TH TW VN
Putting into savings 0 1 _ -1 -1 5 2 -2 -2 -1 -7 -8 -2 3 6
Holidays / vacations -4 1 _ -3 -1 0 -5 -9 1 1 -8 -2 -2 -9 0
Bars reflect Q4 2017. Table shows comparison to Q3 2017
China data not available Q3 2017
Work life balance has increased in importance for consumers across the region but
the economy is still a top concern for consumers in Malaysia and Thailand
The Conference Board® Global Consumer Confidence Survey is
IN = India ID = Indonesia conducted in collaboration with Nielsen.
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Copyright © 2018 The Nielsen Company
LOOKING THROUGH ASIA PACIFIC'S
FMCG LENS
FAST MOVING CONSUMER GOODS MARKET DYNAMICS
Weighted average – APAC – 14 countries*
MAT MAT
MAT MAT Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17
YYAA TTYY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17
5.8%
4.8% 4.8% 4.9%
4.6%
4.0%
3.6% 2.5% 3.4% 3.7% 3.5% 2.8% 2.6%
1.5% 2.4% 1.5%
1.7% 1.9%
2.3%
0.5%
2.1% 2.3% 2.2% 1.8% 1.7% 2.1% 2.2% 2.3% 2.1% 2.3%
*excluding Myanmar
Unit Value Growth Volume Growth Nominal Growth
WHERE ARE THE FMCG GROWTH OPPORTUNITIES?
Average volume growth Q3 2017 & Q4 2017
CHINA (+4%)
JAPAN (-1.1%)
KOREA (+0.2%)
THAILAND (-3.1%)
TAIWAN (+0.6%)
HONGKONG (-2.2%)
INDIA (+8.2%)
PHILIPPINES (+0.8%)
VIETNAM (+3%)
MALAYSIA (+5%)
SINGAPORE (-2.1%)
INDONESIA (-0.5%)
AUSTRALIA (+1.1%)
Avg. volume growth decreasing versus last period
Avg. volume growth increasing versus last period
NEW ZEALAND (+2.3%)
Colour coding indicates growth or declining trend compared to same 6 month period year ago
Average volume growth of Q3’17 & Q4’17 vs Q3’16 & Q4’16. Vietnam represents latest annual growth; no 2016 % growth available for comparison
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Copyright © 2018 The Nielsen Company
AUSTRALIA SNAPSHOT
The Australian market continues to experience challenges with a sluggish growth rate.
Australian GDP growth slowed in late 2017, driven by construction and exports.
According to the Australian Bureau of Statistics (ABS), although there was actually an
uptick in household spending, this was driven by experience-based discretionary
spending and rising health costs. Ultimately, real net disposable national income per
capita (a measure of living standards) actually went backwards versus the prior quarter.

Unsurprisingly, consumers in Australia remain cautious – with consumer confidence
(CCI) flat in Q4 2017 vs same time a year ago at 91. As such, the CCI remains below
the regional and global average, as well as UK (96) and US (118) indices– although
Justin Sargent
both of these countries did have a step back of -5 percentage points versus year ago.
Managing Director,
Pacific
Concerns around employment remains a key driver behind this cautiousness in
Australia; with only 39% of Australian consumers feeling positive about job prospects. It
is likely that this is being influenced by on-going underemployment challenges,
particularly for younger people – which when combined with rising household costs is
reducing consumer disposable income.

We can see this flow through into nominal FMCG value growth in Q4 2017. Whilst there
was growth (+1.9%), it was sluggish compared with Q4 2016 (+2.6%).

Despite these challenges in the business environment, there are three key areas of
growth. As seen last quarter, Private Label continues to drive growth which is
unsurprising given the pressure on household income, switching to Private Label is a
key way of reducing grocery spend. Outside of Private Label, there are two key bright
spots of growth; online grocery, driven by the bricks and mortar retailers and produce.

This demonstrates that there is growth to be found in the Australian market, but tapping
into that growth will be hard for large and medium sized FMCGs who have not
traditionally played in this space (private label, groceries online, produce).
COUNTRY HIGHLIGHTS
ECONOMY WATCH CONSUMER CONFIDENCE INDEX
3.2
2.8 109 111 114 115 114
2.4
2.1 2.1 91 91 89 93 91
1.8 1.91.9 1.8 1.9
1.5
1.3
Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017
AP AU
GDP (% change pa)
Inflation,consumer prices (% change pa)
Source Economist Intelligence Unit (EIU) GDP Q4 forecast data The Conference Board® Global Consumer Confidence Survey is
conducted in collaboration with Nielsen.
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Copyright © 2018 The Nielsen Company
FMCG MARKET DYNAMICS
(weighted average)
MMAATT MMAATT
Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17
YYAA TTYY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17
6.0%
3.3%
5.5%
2.9%
2.2% 2.6%
0.9%
1.3% 1.9%
1.7%
1.3% 1.9% 1.4% 1.1% 1.1% 0.8%
0.9%
1.1% 0.6% 0.5% 10..34%% 1.3% 0.5% 1.5% 1.1%
0.7%
0.4% -0.3% -0.3%
Unit Value Growth Volume Growth Nominal Value Growth
Consumers are putting more items in the basket and spending slightly
more versus year ago, driving a growth rate of +1.9% in Q4 but sluggish
versus same time year ago (+2.6%)
TOTAL AUSTRALIA – CHANNEL PERFORMANCE
VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017
3.0%
23.8%
0.5%
97.0%
Online
Bricks and Mortar
Online is now growing faster than all other channels, driven by Coles and
Woolworths – who make up more than 80% of online grocery sales
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Copyright © 2018 The Nielsen Company
TOTAL AUSTRALIA – SUPER CATEGORIES PERFORMANCE
MAT Q4-2017 MAT Q4-2017
Value % Share Value % Chg YA
Total FMCG 100.0% 1.3%
1
Chilled Foods 27.5% 1.0%
2
Dry Grocery 19.7% 0.6%
3
Fresh Produce 14.4% 4.0%
4
Health & Beauty exc med equip/acc 8.8% -0.1%
5
Beverages 7.0% 0.4%
6
Confectionery 6.5% 1.4%
7
Frozen Food 6.3% 3.0%
8
Household exc vacuum cleaner bag 5.2% -1.4% 9
Pet Supplies 4.7% 10 2.3%
The continued growth of Produce demonstrates consumers’ focus on healthier
lifestyles. Health & Beauty and Household are in value decline, and several areas of
Packaged are seeing limited growth, largely driven by average price deflation
TOTAL AUSTRALIA – MANUFACTURER VALUE GROWTH % ACROSS FMCG
MAT Q4-2017 MAT Q4-2017
Value % Share Value % Chg YA
Total FMCG 100.0% 1.3%
1
Top 1-5 36.0% 4.1%
2
Top 6-10 10.2% -1.1%
3
Top 11-30 18.2% -0.8%
4
Top 31-100 17.2% 5 2.7%
1.7%
100+ 18.4% 6
Growth is coming from two key places. The top 1-5 manufacturers is driven
by Private Label and the ‘tail’, those FMCGs outside the top 30.
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