ASIA 2020 PROGRESSING, PREPARED OR PESSIMISTIC?

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1 ASIA 2020 PROGRESSING, PREPARED OR PESSIMISTIC? Regan Leggett 9 March

2 TODAY S PRESENTER Regan James Leggett Regan.leggett@nielsen.com Executive Director, Thought Leadership & Foresight Nielsen 2

3 ASIA 2020 PROGRESSING, PREPARED OR PESSIMISTIC? Regan Leggett 9 March

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5 CHANGE IS INEVITABLE But connecting the dots and applying a foresight model can be a shining light From linear and one-way To multi-dimensional, connected & all-ways Organisation Economy Brands Industry Society Global & macro 5

6 We didn t do anything wrong, but somehow, we lost. CEO OF NOKIA 6

7 HOW TO NAVIGATE ACCELERATING CHANGE? It s complicated, complex and challenging OVER DECADES OVERNIGHT 7

8 CHANGE IS ACCELERATING BUT ARE WE READY? 8

9 BROAD & SLOW population growth middle income emergence demographic spread infrastructure investment ASEAN secondary cities ASIAN mega-cities changing regional business framework 9

10 POPULATION GROWTH 2013 TO 2025 Australia + 5.4M to 28.7M Indonesia to 282M Malaysia +5.2M to 34.9M Philippines +20.9M to 119.2M Singapore +0.9M to 6.3M Thailand +0.9 to 67.9M Vietnam +8.2M to 99.8M Cambodia +3M to 18.1M Laos +1.5M to 8.2M Myanmar +4.4M to 57.6M China +63M to1448m India +166M to 1418M ADDITIONAL MILLION TO 3,586.9 MILLION 10

11 TWO SEGMENTS AT OPPOSITE ENDS OF THE AGE SPECTRUM YOU SHOULD BE OPPORTUNISTIC ABOUT Population Share (%) By Age - Projected 2030 AGEING CONSUMERS Japan Singapore Korea Thailand China Vietnam Indonesia Malaysia India Philippines Source: Nielsen Research 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% LITTLE EMPERORS 11

12 THE GLOBAL MIDDLE CLASS IS EMERGING IN NEW PLACES Global Middle Class 2012 $16 to $100 per day Global Middle Class 2020 $16 to $100 per day 28% 190 MILLION South East Asia 55% 400 MILLION South East Asia 17% 210 MILLION India 39% 540 MILLION India 61% 800 MILLION China Source: Nielsen Estimates Global Middle Class defined as $16 to $100 per day in 2005 PPP 71% 1 BILLION China 12

13 2025: OPPORTUNITY IS IN THE MASSES LARGE TOWNS 63% ASEAN URBAN POPULATION MEGACITIES 19% MIXED-DENSITY 14% <500K 5M m 18% 69m 32% SMALL CITIES 5% 1 5M 500K 1M 52.7m 51% 16.8m -5% 13

14 FOCUSED & SWIFT 3D printing autonomous cars big data/api/predictive analytics consumer stratification crowdsourcing drone delivery energy food stress gen Y health & wellness /functional & performance foods personal devices/the internet of things pollution premiumisation social responsibility virtual & augmented reality 14

15 DEVELOPING TECHNOLOGIES WITH VERY PRACTICAL APPLICATIONS 15

16 CONSUMER STRATIFICATION ACROSS ASIA MILLENNIALS AGE SILVER TIDE LOW INCOME WEALTH MILLIONAIRES SINGLE UNIT HOUSEHOLD SIZE FAMILY UNIT RURAL LOCATION URBAN LOW LIMITED TRADITIONAL/ MODERN TRADE EDUCATION ACCESS TO TECHNOLOGY ACCESS TO PRODUCTS HIGH 24/7 E-COMMERCE 16

17 INCREASING FOCUS ON HEALTH AND WELLNESS DRUGSTORES & PERSONAL CARE STORES INCREASING SHARE 84% OF CONSUMERS WILL PAY MORE FOR FOODS WITH HEALTH BENEFITS 17

18 IF SOUTHEAST ASIA FOLLOWS CHINA, SIGNIFICANTLY MORE OPPORTUNITY TO EXPAND PREMIUM SEGMENT 10% 8% 21% GROWTH SOUTHEAST ASIA 16 GROWTH CHINA Source: Nielsen Analysis: 10 countries vs 6 countries 16 categories 11% 6% 23% 27 18

19 150 PERSPECTIVES Agodato Zalora FMCG to Financial Services Myanmar to Korea 19

20 POLL 1: TO WHAT EXTENT DO YOU THINK YOUR ORGANISATION WILL HAVE TO CONTEND WITH A MAJOR CHANGE IN YOUR INDUSTRY OR COUNTRY IN THE NEXT 5 YEARS? A: HIGHLY UNLIKELY B: UNLIKELY C: NEUTRAL D: LIKELY E: HIGHLY LIKELY 20

21 OUR LEADERS KNOW IT IS HAPPENING Extent your organisation will have to contend with major change in industry What is the biggest change of concern in the next 5 years? 21

22 POLL 2: HOW CONFIDENT ARE YOU THAT YOUR ORGANISATION HAS THE NECESSARY SYSTEMS & TOOLS IN PLACE TO SPOT EARLY INDICATORS THAT CHANGES MAY BE APPROACHING? A: NOT VERY CONFIDENT B: NOT CONFIDENT C: NEUTRAL D: CONFIDENT E: VERY CONFIDENT 22

23 BUT ARE THEY READY? Prepared for the future Ability to spot early indicators Change in business model 23

24 MOST LEADERS ARE ABREAST OF SLOW MOVING CHANGE Impact of trade agreements Expand into new markets Top 3 priority markets VIETNAM INDONESIA CHINA 24

25 IT IS HARDER TO KEEP UP 59% are concerned about threat of new competition 84% agree new technology will impact organisations in next 5 years SEEDS OF TOMORROW ARE ALREADY PLANTED INTERNET OF THINGS 3D PRINTING DRONES/ROBOTICS 25

26 WHAT WILL RETAIL ENVIRONMENT OF TOMORROW LOOK LIKE? 26

27 E-COMMERCE WILL CHANGE THE RETAIL LANDSCAPE 31% believe e-commerce will account for 30% or more of their organisation's growth in next 5 years. Top 5 factors in retail environment of the future that will be most important to your organisation? 27

28 CONSUMER ACCEPTANCE IS GROWING Source: Nielsen Global E-Commerce and Future of Grocery Survey, Q Global survey generally reflects urban population. Based on Internet users. 28

29 MORE CONSUMER TOUCHPOINTS CREATES MORE DATA WELCOMES THE AGE OF CUSTOMISED PERSONALISATION 29

30 COMPANIES BELIEVE GREATER FOCUS ON INDIVIDUALS Thinking about how your business will engage with customers in the future, do you think there will be 30

31 WHAT CONSUMER BENEFITS ARE IMPORTANT FOR THE FUTURE? CONVENIENCE PRODUCTIVITY/ TIME SAVING HEALTH & WELLNESS 31

32 POLL 3: COMPARED TO YOUR ORGANISATION S AREA OF FOCUS TODAY, WHICH OF THE FOLLOWING WOULD BE YOUR BIGGEST PRIORITY IN THE NEXT 5 YEARS? A: BIG DATA / PREDICTIVE ANALYTICS B: RETAILER PARTNERSHIPS C: SUPPLY CHAIN IMPROVEMENT D: DIGITAL E: NEW MARKETS & EXPANSION F: PARTNERSHIPS & ACQUISITIONS G: INNOVATION H: OTHERS 32

33 STRATEGIES FOR TOMORROW? What business leaders say INNOVATION DIGITAL BIG DATA & PREDICTIVE ANALYTICS SUPPLY CHAIN IMPROVEMENT 33

34 EMERGING ECOSYSTEM: THE CONNECTED CONSUMER 34

35 QUESTION & ANSWER 35

36 William THE FUTURE IS ALREADY HERE IT S JUST NOT EVENLY DISTRIBUTED Gibson 36

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