Nielsen - A Weakening of Consumer Purchase or Shifting

INDONESIA MACROECONOMY
& FMCG UPDATE

Copyright © 2017 The Nielsen Company. Confidential and proprietary.
‘A WEAKENING OF CONSUMER PURCHASE OR SHIFTING

PRIORITY?’
Copyright © 2017 The Nielsen Company. Confidential and proprietary. 1

A WEAKENING IN RETAIL INDUSTRY SINCE HY2’16.
SOME POTENTIAL INFLUENCING FACTORS:
OTHERS INFLUENCING
POSITIVE NEGATIVE INFLUENCE FACTORS
INFLUENCE
 The Global economy slowing down  Lower real income growth

 Stable GDP Growth (at 5% rate
which impacted commodity price (minimum wage 8% increase,
– still below the government’s
lower compared to previous years)
target)  Continuous price increase (CPI)
nearly around 4% every year,  Rational spending due to price
 Consumer Confidence Index
topping up from double-digit price pressure and the consciousness
level is still high especially
boom in the previous year (since on the economy condition among
expectation on future economy
mid 2013) upper SES consumer (more
selective on spending)
2
INDONESIA MACROECONOMY INDICATOR
The Q2 GDP growth is slightly increasing from the previous quarter, yet still behind the last year’ and quite far from
Government’s target for this full year. Annual Inflation is picking up slightly at recent quarter but still around the
government expectation (4% +/- 1%).
GDP GROWTH (%) INFLATION MAT (%)
2012 - 2015 2016 2017

FY 5.0 Target FY 5.3** 8.4 8.4
6.0
5.6
5.0 4.8 4.9 5.2 5.0 4.9 5.0 5.1
4.3 4.5 4.4

3.4 3.4 3.6
3.1 3.0
FY FY FY FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY FY FY MAR JUN SEP DEC MAR JUN SEP DEC

12 13 14 15 16 16 16 16 17 17 17 17 12 13 14 15 16 16 16 16 17 17 17 17
** RAPBN 2017
Sources: Bank Indonesia and BPS 3
GDP GROWTH BY COMPONENT
GDP growth is still mostly reflected from Household Consumption, which relatively stagnant in the last 2 years. The GDP
growth increase in this quarter is mostly driven by investment increase while the government spending is lacking than last
year.
GDP CONTRIBUTION GDP SECTOR

BY SECTOR (%) GROWTH
5.5 5.4
5.1 5.1 5.0 5.0 5.0
5.0 4.9 4.9 5.0
EXPORT/GDP 19%
IMPORT/GDP 18%
COPYRIGHT ©2017 THE NIELSEN COMPANY. CONFIDENTIAL AND PROPRIETARY.
NET EXPORT 1% HOUSEHOLD

31 CONSUMPTION
2011 2012 2013 2014 2015 | Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17
Q2 56
6.9
2017 5.5 5.4 6.3
4.5
2.0 2.9 2.7
GOVERNMENT -3.0
-4.1
SPENDING -1.9
2011 2012 2013 2014 2015 | Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17
9
8.9 9.1
HH Consumption Gov. Spending 5.3
4.1 5.1 5.6 5.1 4.2 4.8 4.8 5.4
Investment Net Export/Import

Others
GROSS FIXED 2011 2012 2013 2014 2015 | Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17
CAPITAL FORMATION
4
INDONESIA INFLATION DETAILS
The inflation increase is contributed from Transportation and Household expenditures (PLN electrical scheme)
components. While, Prep Foods + Beverages + Cigarette is still expected to increase by 4%-5% in 2017.
INFLATION MONTHLY INFLATION

COMPOSITION & CPI
MAT YTD Consumer Price Index*
COMMODITY 2016 Jun’17
JUN17 JUN17 180 Monthly Inflation (%) Jun’16 173 4.00
FOOD RAW MATERIAL 5.7 2.4 0.1 170 166 3.50
3.00
PREPARED FOODS, BEVERAGES & CIGARETTE 5.4 4.3 2.1 160
2.50
HOUSEHOLD EXPENDITURE 1.9 6.0 4.2 150
2.00
140
CLOTHES 3.0 2.7 2.5
1.50
130
HEALTHY 3.9 3.8 1.8 1.00
120
0.50
EDUCATION, RECREATION & SPORT 2.7 2.8 0.4
110 0.00
TRANSPORTATION, COMMUNICATION, AND
-0.7 5.7 4.1
SERVICES 100 -0.50
Sep-14
Sep-15
Sep-16
Mar-14
Mar-15
Mar-16
Mar-17
Dec-13
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
INFLATION 3.0 4.4 2.3
*) 2007 = 100 5
Source: BPS
CONSUMER CONFIDENCE (BANK CENTRAL)
Consumer Confidence Index slowly increased since early of this year until slightly drop in June. Gap between the future
and current confidence is still generally wider, compared to 2014.
CONFIDENCE ABOUT FUTURE

CONDITION
140
131
June’17
122
110
CONFIDENCE ABOUT CURRENT
CONDITION
114
80 CCI CECI
JUN14 SEP14 DEC14 MAR15 JUN15 SEP15 DEC15 MAR16 JUN16 SEP16 DEC16 MAR17 JUN17
CEI
CCI - CONSUMER CONFIDENCE INDEX
CECI - CONSUMER ECONOMIC CONDITION INDEX
Source: Bank Indonesia CEI - CONSUMER EXPECTATION INDEX
6
HOUSEHOLD SPENDING (000 IDR – 12MMA )
Household spending is accelerate due to festive period. Both middle and lower SES consumer are able to increase their
spending significantly higher than last year festive.
HH SPENDING/MONTH HH SPENDING/MONTH BY SEC

Q2’ 15 Q2’ 16 Q2’ 17
+5% +12% +10% +10%

UPPER 5,751 6,341 6,948
(11%)
3,071
2,734 +8% +12%
2,593
MIDDLE 2,653 2,864 3,217
(43%)
+4% +12%
(Based on Household Study + 58 FMCG
CAT - 58 out of 79 Nielsen Coverage) LOWER 1,679 1,742 1,954
(46%)
Q2 15 Q2 16 Q2 17
SOURCE : CPS HOUSEHOLD SPENDING STUDY + 58 FMCG CATEGORY 7

HOUSEHOLD SPENDING
3 areas that still maintained are Lifestyle, Education, Foods (fresh & basic needs). Upper is generally the first to hold back -for
their consciousness and wiser spending
UPPER MIDDLE LOWER

CONTRIBUTION SPENDING
+10% +10% +8% +12% +4% +12%
+5% +12%
Spend/Buyer Growth 15 vs 16 16 vs 17 15 vs 16 16 vs 17 15 vs 16 16 vs 17
23 23 24 FOOD 5 20 5 20 5 15
EDUCATION 23 59 32 57 18 62
6
7
10 LEISURE & LIFESTYLE 3 25 1 34 5 24
9 9
4 4 10 HOUSING RELATED 5 9 -1 12 -7 4
11 12 4
FMCG 13 2 9 5 11 5
11
11 11 TRANSPORTATION 5 2 3 0 0 -3
10
5 5 6 7 4 7 -1 4
5 COMMUNICATION
HEALTH 84 -9 95 -13 71 4
26 25 22 INSURANCE 6 -3 7 -3 -5 -2
SAVING + LOAN 10 -8 5 0 -8 7
MAT Q2’15 * MAT Q2’16 MAT Q2’17
*CPS N.Mustang Data (Old Panel Design)
Source: Nielsen CPS Data, Moving Annual Spend/Buyer, Total Indonesia *Buyers Base to Universe 8
FMCG HOMEPANEL BY SES (MAT June’17 GROWTH)
1. UPPER SES are rationalizing their spend and able to minimize price impact through promotion and more
sensible during their purchase
2. MIDDLE SES are showing positive consumption and still able to keep up with price increase
3. However LOWER SES doesn’t have leverage on the cash, resulting in no volume growth
IDR SPEND KG/L UNIT SHOPPING TRIP SPEND PER HH

Upper
(12%)
4.7% 3.1% 3.2% -2.4% 1.7%
Middle
(43%)
7.0% 3.7% 5.1% -1.1% 4.6%
Lower
(45%)
4.8% -0.4% 2.4% -1.2% 5.0%
Above 2.9% Between 2.9% - (2.9%) -2.9 and below 9

Source: Nielsen CPS Data, Total Indonesia
BEHAVIOUR ON PROMO BY SES
UPPER SES IS BENEFITTED THE MOST FROM PROMOTION ACTIVITY, WHILE LOWER SES SEEMS
UNABLE TO PARTICIPATE.
BUYERS BEHAVIOR TOWARDS FMCG IN MODERN TRADE
% Value on Promo % Buyers on Promo % Unit on Promo % Occasions on Promo
Upper
Middle
Lower
37.5
22.1 36.2
20.8 86.1 84.5 33.6
20.5 83.1 33.0 33.1
19.8 15.5
18.1 14.6 29.7
69.8 69.8 69.9 13.9
16.3 16.1 13.2 26.8
12.8 25.4
14.8 59.7 12.7 23.6
13.9 53.0 55.1
10.0 10.2
9.1
MAT Jun'15 MAT Jun'16 MAT Jun'17 MAT Jun'15 MAT Jun'16 MAT Jun'17 MAT Jun'15 MAT Jun'16 MAT Jun'17 MAT Jun'15 MAT Jun'16 MAT Jun'17
Source: Nielsen CPS Data, Total Indonesia 10

CONSUMER BIG TICKET PURCHASE
Car Sales growing positively, with the more options of cheaper cars in the market. However, motorcycle sales is still
showing declines – Mid Low Class likelihood of losing purchase power.
CAR SALES (000 UNIT) MOTORCYCLE SALES (000 UNIT)
321 275
1,787
1,958
249 278
1,712
291 1,557
295 1,872 1,863
239 252
1,717
1,411
314 2,226
300 243 265 250 1,969
1,610 1,458 1,299
282 329 283 267 283 1,971 1,990 1,647 1,504 1,402
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Q1 Q2 Q3 Q4
Source: Association Numbers (GAIKINDO and AISI)
11
CONSUMER INCIDENCE ON LIFESTYLE NEED
On the other hand, Lifestyle is still generally kept up within households spending, as there are increase incidence of Dining
Out, Durable White Good Electronics and Smartphone Ownership
DURABLE
DINING OUT ELECTRONIC SMARTPHONE
INCIDENCE OWNERSHIP OWNERSHIP
(including Coffee Shop)
(based on 9 electronic items)
38.0 41.6 41.6

35.2 35.4
25.7 27.6
23.6 25.7
Q1’15 Q1’16 Q1’17 Q1’15 Q1’16 Q1’17 Q1’15 Q1’16 Q1’17
BY SES (UPPER, MIDDLE, LOW)
65 67 75 45 46 50 55 64 70
29 29 30 19 19 20 18 26 32
10 15 15 8 10 11 6 14 22
Source: Consumer Media View – Nielsen Media

12
SAVINGS PRODUCT STILL OWNED BY UPPER SEGMENT
Saving account fund increased year by year and the amount is contributed by mostly by upper customers, esp upper 1
segment. The same fact for Time Deposit which majority owned by Upper Segment.
% CUSTOMER % CUSTOMER
SAVING 25.9 29.1 29.6 0.9

ACCOUNT 0.6 0.5
TIME
In % DEPOSIT In %
Q1 positon 2015 2016 2017 Q1 positon 2015 2016 2017
Upper 1 21% 34% 36% Upper 1 58% 74% 74%
% Of Segment who
% Of Segment who
Have Time Deposit
Have Saving Acc
Upper 2 34% 26% 22% Upper 2 30% 11% 17%

Middle 1 29% 26% 27% Middle 1 8% 7% 5%
Middle 2 11% 10% 11% Middle 2 2% 8% 4%
Lower 4% 3% 4% Lower 2% 0% 0%
SAVING ACC. FUND TIME DEPOSIT FUND
10% 12% 1,722,797 6% 1,824,364 8% 1,972,210

1,102,302 1,207,544 1,355,112
In Billion Rp In Billion Rp
Q1 positon 2015 2016 2017 Q1 positon 2015 2016 2017
Source: Customer Penetration - Consumer Media View | Fund – OJK Kegiatan Bank Umum 13
FMCG TREND
THUS, FMCG MAY BE ONE THAT BEING RATIONALIZED UNDER THE PRICE
PRESSURE AND LIFESTYLE CHANGE

FMCG PRICE STILL INCREASES FASTER THAN INFLATION
Indonesia Total Grocery| Value, Volume Growth & Price Increase | Top 58 FMCG Categories
GDP GROWTH 5.6 5.0 4.7 5.0 5.1*
INFLATION 8.4 8.4 3.4 3.0 4.4

12
19 10
5 11 12 6 6
FMCG 8
13 2 2 5
(1) (1)
FY 2013 FY 2014 FY 2015 FY 2016 MAT 2017
Old Universe (Data) New Universe (Data)
FMCG Value Growth FMCG Vol Growth (/unit) FMCG Price Increase (/unit)
Source: (1) BPS Official Government Site, & Nielsen Retail Data 15
FMCG & CIGARETTE QUARTERLY TREND
Cigarette level this quarter is slightly lower than the previous year. Similar trend is also seen in FMCG, where the volume
has been softening down in trend in the last 3 quarters (after Festive’16) and the recent trend is still slightly negative.
CIGARETTE FMCG
72.9 33.8
71.4 33.0 32.9
70.0 69.3 32.7
83.6 86.5
72.1 76.5
67.4
62.2 68.1
57.0
Gr vs YA JUN17 P3M P6M P12M Gr vs YA JUN17 P3M P6M P12M

VOL -2.3% -1.0% -0.8% -1.0% VOL -3.0% -2.8% -2.2% -1.0%
VAL 5.5% 7.0% 7.5% 8.3% VAL 5.1% 3.4% 3.7% 4.6%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17
Volume (Bill Stc) Value (Trillion Rp) Volume (Bill Bags) Value (Trillion Rp)
Source: Nielsen RMS Data 16
FMCG SECTOR TREND
Indication of slowing down shown across different sectors, while stable trend is only seen in the Household sector.
1 VALUE % GROWTH vs LY 2 VOLUME % GROWTH vs LY
JUN’17 L3M YTD’17 L6M L12M JUN’17 L3M YTD’17 L6M L12M
FOOD (39%)
8.0 6.1 6.8 6.8 7.1 -2.1 -1.5 -0.7 -0.7 -0.1
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
BEVERAGES (36%)
3.4 1.5 1.7 1.7 3.1 -3.8 -3.9 -3.1 -3.1 -1.1
PERSONAL CARE (10%) 4.1 3.4 3.0 3.0 4.1 -4.6 -4.2 -4.1 -4.1 -2.3
HOUSEHOLD (9%) 4.1 2.6 1.6 1.6 2.1 0.7 0.9 -0.0 -0.0 0.3
PHARMACEUITICAL (4%)
-0.5 -1.5 1.0 1.0 3.1 -8.0 -9.4 -8.1 -8.1 -6.3
Source: Nielsen RMS Data 19

TOP 10 CATEGORIES GROWTH
Across the top 10 category, Biscuits , Cooking Oil and Liquid milk are still able to shows positive trend, while others
categories trend is more challenging in both volume and value wise
1 2 3 4 5 6 7 8 9 10
Source: Nielsen RMS Data

20
NEXT 10 CATEGORIES GROWTH
Next top 10 categories are mostly on the slower growth, especially Carbonated Soft Drink.
INDONESIA TOTAL | TOP 11—20 CATEGORIES | GROWTH | MAT JUN 2017
11 12 13 14 15 16 17 18 19 20
Source: Nielsen RMS Data

21
IN-HOME CONSUMPTION
SIMILAR TREND ON THE IN-HOME PURCHASE, WITH SLIGHTLY BETTER
TREND ON FOODS
BASED on HOMEPANEL DATA

HOMEPANEL VALUE CONSUMPTION
In-home consumption (spend) shows better trend, more specifically on FOODS sector, while the rest shows weaker
trend – indicating prioritizing on necessity (Foods).
Avg.
VALUE CONSUMPTION GROWTH (VS YA)
Price/Unit
JUN 17 P3M P6M MAT 17 % Chg. Vs. LY
FMCG 6% 4% 4% 6% 6%
FOOD 13% 9% 9% 10% 7%
BEVERAGES 3% 0.4% -1% 2% 4%
PERSONAL CARE 1% 1% 1% 4% 6%
HOMECARE 2% 1% 2% 6% 2%
IN-HOME CONSUMPTION
PHARMACEUTICAL 1% -6% -1% 5% 10%
Festive’17
Source: Nielsen CPS Data 23
IN-HOME PURCHASE PATTERN CHANGE (vs. LY)
Despite consumers try to rationalize their purchase on FMCG, majority of categories are basically being Adjusted and
Modified to manage cash flow, by increase Frequency, but managing smaller basket/spending.
PARTIALLY
SACRIFICING ADJUSTING MAINTAINING MODIFIYING MODIFYING
INCREASING
Drop out Adjusting Maintain the Changing Modifying CONTINUE

category from purchase to same purchase purchase purchase INCREASE
basket or reduce overall behavior as last behavior to – behavior – PURCHASE

Reduce both spending – year by increase freq. and By increase freq. and
by reducing either reduce basket size, maintain basket size
Frequency & or the other way or the other way
Frequency or Basket
Basket Size Size around around
18% 34% 12% 18% 14% 4%
Negative Growth Negative Growth Marginal Growth Positive Growth Positive Growth Positive Growth
Source: Nielsen CPS Data __% = the percentage numbers represent the number categories portion to total 49 categories observed 26
SHIFTING TREND IN TRADE
CHANNEL
AVERAGE TRADE SECTORS USED IN PAST 4 WEEKS
Average trade sectors used is very subtly declining. 1 - 3 sectors users continues its gradual growth at the expense of 5+
sector users.
2014 2015 2016 2017
1 – 2 Trade Sectors 38 35 40 42
3 Trade Sectors 33 32 32 28
≥ 7 Trade Sectors 1 0.5 1 *
Average: 3.0 3.0 2.9 2.9

Base: All respondents
(2017 ,n=4487 | N=19,913,000) Ref: Q7B
(2016 ,n=4246 | N=19,373,000)
(2015 ,n=3507 | N=17,161,000) 29
(2014 ,n= 3641 | N= 16,015,000)
FREQUENCY OF VISITING (TIMES IN A MONTH)
Number of visits to traditional groceries continues to decline, while in contrary the visit to vegetable vendor
and minimarts are increasing.
2015 2016 2017

25 23 25
21 21 22
14 15 15
8 9
6
3 2 2 2 2 3
Hypermarket Supermarket Minimarts Traditional Groceries Wet Market Vegetable Vendor

Actual No. Of Intv (n=604) (n=2102) (n=3865) (n=3474) (n=2158) (n=575)
All
Respondents('00 (N=4041) (N=9391) (N=17600) (N=14348) (N=8070) (N=2180)
0)
Base – All Respondents

30
Ref: Q8R1, Q8R2, Q8R9, Q8R13, Q8R14, Q8R16
Response to food prices rising
Buying less in total is common response across SES, while buying discounted product rises only among SES A. Higher
response on downgrading brand seen among C1.
TOTAL SES A SES B SES C1

2015 2016 2017 2015 2016* 2017 2015 2016* 2017 2015 2016* 2017
Buy only the essentials we need/cut
down on luxuries 58 67 63 63 65 65 57 69 59 58 65 66
Buy less in total 31 27 34 24 19 24 31 27 36 34 33 39
Actively look for and buy products on

special/discounted prices 14 25 30 18 27 41 14 25 26 19 24 24
Switch to cheaper brands 16 16 20 11 12 15 16 16 19 13 20 26

©2013 The Nielsen Company. Confidential and proprietary.
Does not affect me 16 9 15 21 16 21 14 6 16 16 7 5
Buy in bulk to get lower prices 8 10 12 11 10 8 7 9 15 7 11 12
Actual no. of intv n = 2258 n=3188 n=3098

All S/H/M respondents who assume food
N = 10780 N=13398 N=13772
price rising ('000)
Base -
Actual no. of intv (n=3098)
All super/hyper/ minimarket respondents who assume food price rising ('000);(N =13772) / Ref: Q125 *2016 12 cities 31
38%
ARE CONNECTED TO
80%
INTERNET THROUGH
PERSONAL COMPUTER
ARE CONNECTED TO INTERNET

THROUGH THEIR SMARTPHONES
38% OF INTERNET USERS ARE

ONLINE SHOPPERS
SOURCE: NIELSEN BRICKS & CLICKS SURVEY

Copyright 2016 The Nielsen Company. Confidential and proprietary 37
TYPE OF CONSUMER BASED ON THEIR ACTIVITY
BROWSE BUY
ONLINE OFFLINE ONLINE OFFLINE
56% OMNI-CHANNEL SHOPPERS
5% ONLINE INFO SEEKER OMNI BUYER

6% ONLINE SHOPAHOLICS
11% IMPULSIVE SHOPPER
21% EXCLUSIVE CLICK SHOPPER
BASE: 1928 RESPONDENT

KEY ACTIVITIES PRE ONLINE PURCHASE
ACTIVITIES
TRAVEL FASHION & COSMETICS BOOKS & IT& MOBILE GROCERY
SPORTWEAR STATIONARY EVENT TICKETS PERSONAL CARE
COMPARE PROMOTION
COMPARE PRICE
CHECK BRAND'S REPUTATION

AND QUALITY
IMPULSIVELY BOUGHT THE

PRODUCT
READ PRODUCT REVIEW AND

FEEDBACKS

A NEW ERA OF
ONLINE SHOPPING ON FMCG
Nielsen CPS Homepanel 2017 Data
Created by: Btari Dhityawulandari

ESTIMATION OF MARKET VALUE BY CATEGORY (Annual in Early 2016)
Consumer Electronics & Travel products contributes more than 50% of total market value for Online Shopping
IDR 74 Trillion
IT & MOBILEELECTRONICS
CONSUMER BOOKS & STATIONARY
35%
13% 2%
TRAVEL
CONSUMER ELECTRONICS PERSONAL
GROCERY NONCARE
F&B
27%
35% AIR CARE, LAUNDRY, CLEANERS, DIAPERS,
2%
0.2%
SANPRO, TISSUES, PET FOOD, ETC.)
FASHION
TRAVEL & SPORTSWEAR EVENT TICKETS
16%
27% 1%
t ©2013 The Nielsen Company. Confidential and proprietary.
IT & MOBILE
EVENT TICKETS GROCERY F & B
1%
13% 1%
COSMETICS GROCERY NON F&B

COSMETICS
4% 4%
0.2%
41
41
HOMEPANEL
ONLINE PURCHASE IN OUR HH IS GROWING SIGNIFICANT IN THE PAST 3 YEARS

More buyers are buying from Online Shop and they are also shopping more often
Total Indonesia | Online Shopping | FMCG | MAT July 2015 vs 2016 vs 2017
PENETRATION (%)
VALUE (RP ‘000)
127 Billion IDR 1.5
0.5
0.2
MAT 15 MAT 16 MAT 17 MAT 15 MAT 16 MAT 17
NO. OF TRIP
VOLUME (UNITS)
1.6 1.9
1.2
MAT 15 MAT 16 MAT 17 MAT 15 MAT 16 MAT 17
42
HOMEPANEL
More categories are being bought through online this year

Personal Care take the important role this year as buyers total spending is increasing significantly, even bigger than Food. Despite
Household Care being the most recent selected category, but it has faster growth compared to Beverages.
% SPENDING CONTRIBUTION
Value (Bill IDR) MAT July’15 MAT July’16 MAT July’17
27 FMCG 79 11.2 31.0 127.8
Personal Care 3.1 25.8 89.5

70
83
Food 7.6 4.3 34.4
68 Household Care - 0.4 2.8
Beverages 0.5 0.5 1.2

27
14
5 2 2
2015 2016 2017
43
HOMEPANEL
BUYERS ARE GETTING EXPERIMENTAL & IMPULSIVE THROUGH ONLINE SHOPPING

They are more impulsive when purchasing on Personal Care and more experimental when purchasing on food
% OCCASIONS CONTRIBUTION 2017- % OCCASIONS BY CATEGORIES
9 8 12 8 12
Experimental 20
22
26
45 48
46 33
Impulse
100
69
62
48 43 44 46
Routine
2015 2016 2017 Personal Care Food Beverages Households Care

44
HOMEPANEL
Top 5 categories
In 16 weeks there’s a different top categories where it is getting more skewed to Personal Care. Skincare and Toilet Soap are still
the top categories for the past 2 quarters.
Total Indonesia | Online Shopping | FMCG | MAT July 2017
TOP 5 FMCG CATEGORIES (SORTED BY PENETRATION)
MARCH 2017 JULY 2017
 Skincare  Skincare
 Toilet Soap  Toilet Soap

in 16 weeks
 Cosmetics  Cologne All are Personal
Care Categories
 Powder Milk There is still a Non-  Cosmetics
Personal Care category
 Cologne  Baby Diapers
45
EARLY FESTIVE INDICATION
THE SHIFTING OF CELEBRATION

EARLY FESTIVE INDICATION
Festive sales still indicates a ‘Celebrating’ tone. Nevertheless, the peak is not as strong as last year’s, where the
total FMCG peak was also boosted up by Non-Festive categories peak.
INDONESIA MT | FESTIVE CATEGORIES| VALUE SALES | JUN 15 – JUN 17
Inflation June Inflation June

vs. YA: 3.5% vs. YA: 4.4%
Ramadhan 2015: June 16 – July 17
16,000
FESTIVE’16
Ramadhan 2016: June 6 – July 5
Ramadhan 2017: May 26 – June 24  Was very well celebrated, but
14,000
the higher peak was more driven
PROPRIETARY.
12,000 by Non-Festive categories, due to

ANDproprietary.
promotion across categories

10,000
?
Confidential and
FESTIVE’17
Company. CONFIDENTIAL
8,000
6,000  Was still celebrated, more

concentrated on Festive
Nielsen COMPANY.
4,000 categories
Jul’17
 Weaker trend from Non-Festive
2,000
THE NIELSEN
categories, unlike last year’s

0 Festive Festive Festive Festive festive
2017 The
JUN14 SEP14 DEC14 MAR15 JUN15 SEP15 DEC15 MAR16 JUN16 SEP16 DEC16 MAR17 JUN17
Copyright ©©2017
COPYRIGHT
FMCG Festive Categories NON-Festive Categories
**Festive categories = 11 categories which normally enjoy annually festive growth 47

SOFTER GROWTH APPLIED OVER TIME. THIS YEAR WOULD HAVE BEEN READ AS
THE WORST GROWTH, SINCE IT IS LESS THAN HALF OF LAST YEAR’S,
HOWEVER….
ScanTrack – Total Country Key Account – 75 Festive Categories

Period Consists Of 12 Weeks of Festive
38.7
PROPRIETARY.
Festive Growth
ANDproprietary.
29.8
Confidential and
20.6
14.7 13.7
Nielsen COMPANY.
5.1
THE NIELSEN
2017 The
2012 2013 2014 2015 2016 2017

Copyright ©©2017
COPYRIGHT
49
THE PATTERN INDICATED THAT THE FIRST 6 WEEKS OF 2017 FESTIVE TEND TO BE
LOWER HOWEVER THE CELEBRATION DURING THE FESTIVE MONTH ESPECIALLY
LEBARAN IS HIGHER
First Half = Preparation Second Half = The Real Festive Shopping

3,500,000
The earlier period only managed to stabilize in
2017, thus lead the first half of festive to be lower
3,000,000 this year
PROPRIETARY.
ANDproprietary.
2,500,000
Confidential and
2,000,000
Nielsen COMPANY.
1,500,000
Similar trend, but with shorter peak period,
concentrated only on the weeks before Lebaran
THE NIELSEN
1,000,000
2017 The
1 2 3 4 5 6 7 8 9 10 11 12
Copyright ©©2017
COPYRIGHT
Weeks of Ramadhan, Lebaran (Raya), Festive 2015 Festive

Festive
2016
2016 Festive
Festive
20172017
and 1 week after Lebaran
50
FOCUSING ONLY ON THE FESTIVE MONTH, THEN WE SAW HIGHER
GROWTH THIS YEAR
14.7 13.7
12.5 11.6
PROPRIETARY.
9.8
ANDproprietary.
5.1
Confidential and
Nielsen COMPANY.
2015 2016 2017

THE NIELSEN
2017 The
Copyright ©©2017
12 weeks - normal Festive sales periods 6 Weeks - prior to Lebaran

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51
“A SHFTING BEHAVIOR ON THE WAY FUTURE CONSIDERATION
“STABLE AND STILL HAVE A
CONSUMER PRIORITIZE AND “SELECTIVE, RATIONAL,
PROMISING PURCHASE POWER”
SPENDING THEIR MONEY ” EXPERIMENTAL AND EXCITEMENT”
• In overall the economy condition is There is major shifting happen on the way With the facts that FMCG is the 2nd priority
providing stable fundamental for the consumer use and spending their money among consumer spending list, they are
consumer purchasing power becoming more selective and rational
1. Shifting priorities on consumer spending when choose their FMCG product
• Price on basic needs are more • Consumer are giving more focus on 3
PROPRIETARY.
things which are related with basic • However the key factor which can drive
ANDproprietary.
controllable thus release some of the price needs, future and also excitement (Food,
pressure consumer to spend is a product/brand
Education and Leisure + Lifestyle)
which can align with their needs on
Confidential and
lifestyle/leisure
• They high level of consumer confidence is
2. Upper SEC consumer are being rational in

driven by future expectation, while in term of spending their money on FMCG
And…
current condition consumer expectation is thus lead to promotion seeker, and also
jut at the average level tendency to switch to mainstream product
Nielsen COMPANY.
• At the same time consumer are still

willing to spend more if they are driven
3. In the other hand, while middle and lower
THE NIELSEN
by an excitement event
SEC consumer are still maintain their
spending, due to limited cash, they need to
2017 The
sacrifice several sector so they could also

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enjoying similar lifestyle with the upper SEC

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53
KEY STRATEGY
PROPERLY MANAGE THE PROMOTION
During the challenging time and considering the consumer behavior towards promotion, there are several highlight we need to consider :
o What is the objective of our promotion (i.e. loyalty program, switching from other brand, create excitement, etc)
o How can we measure the promo ROI and its objective
o Brand health performance without any promo
PRODUCT PORTOFOLIO MANAGEMENT

To address properly the issue across consumer group, its required for our client to review again the role of their brands/variants/SKUS
and how it can reach different consumer groups
o Should we have affordable variants/SKUs
o Do we need a different brand to reach different consumer groups?
SMALL FORMAT CHANNEL PRODUCT OFFERING

With the growing small format, the outlet function is no longer as an top-up channel but already as destination for different purpose
o Ensuring that product offer is covering our important SKUs across size
o With a very limited space in small format outlet, we need to manage an effective SKUs carried
CONSUMER EXCITEMENT
Create an excitement and also experience to reduce consumer negative sentiment
o Reaching consumer thru an event i.e. CFD, Marathon / HM event,
o Create an experience to win costumer (Jakarta fashion week, Hijab Festival)
o Product innovation
54

Nielsen - A Weakening of Consumer Purchase or Shifting

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Nielsen - A Weakening of Consumer Purchase or Shifting

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INDONESIA MACROECONOMY

& FMCG UPDATE

‘A WEAKENING OF CONSUMER PURCHASE OR SHIFTING

Copyright © 2017 The Nielsen Company. Confidential and proprietary. 1

 The Global economy slowing down  Lower real income growth

GDP GROWTH (%) INFLATION MAT (%)

2012 - 2015 2016 2017

4.3 4.5 4.4

FY FY FY FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY FY FY MAR JUN SEP DEC MAR JUN SEP DEC

GDP CONTRIBUTION GDP SECTOR

NET EXPORT 1% HOUSEHOLD

Investment Net Export/Import

INFLATION MONTHLY INFLATION

CONFIDENCE ABOUT FUTURE

HH SPENDING/MONTH HH SPENDING/MONTH BY SEC

+5% +12% +10% +10%

SOURCE : CPS HOUSEHOLD SPENDING STUDY + 58 FMCG CATEGORY 7

UPPER MIDDLE LOWER

IDR SPEND KG/L UNIT SHOPPING TRIP SPEND PER HH

Above 2.9% Between 2.9% - (2.9%) -2.9 and below 9

% Value on Promo % Buyers on Promo % Unit on Promo % Occasions on Promo

Source: Nielsen CPS Data, Total Indonesia 10

CAR SALES (000 UNIT) MOTORCYCLE SALES (000 UNIT)

38.0 41.6 41.6

Q1’15 Q1’16 Q1’17 Q1’15 Q1’16 Q1’17 Q1’15 Q1’16 Q1’17

BY SES (UPPER, MIDDLE, LOW)

Source: Consumer Media View – Nielsen Media

SAVING 25.9 29.1 29.6 0.9

Upper 2 34% 26% 22% Upper 2 30% 11% 17%

10% 12% 1,722,797 6% 1,824,364 8% 1,972,210

Copyright © 2017 The Nielsen Company. Confidential and proprietary. 14

GDP GROWTH 5.6 5.0 4.7 5.0 5.1*

INFLATION 8.4 8.4 3.4 3.0 4.4

Gr vs YA JUN17 P3M P6M P12M Gr vs YA JUN17 P3M P6M P12M

1 VALUE % GROWTH vs LY 2 VOLUME % GROWTH vs LY

Source: Nielsen RMS Data 19

Source: Nielsen RMS Data

INDONESIA TOTAL | TOP 11—20 CATEGORIES | GROWTH | MAT JUN 2017

Source: Nielsen RMS Data

BASED on HOMEPANEL DATA

JUN 17 P3M P6M MAT 17 % Chg. Vs. LY

FOOD 13% 9% 9% 10% 7%

BEVERAGES 3% 0.4% -1% 2% 4%

Drop out Adjusting Maintain the Changing Modifying CONTINUE

basket or reduce overall behavior as last behavior to – behavior – PURCHASE

18% 34% 12% 18% 14% 4%

2014 2015 2016 2017

≥ 7 Trade Sectors 1 0.5 1 *

Average: 3.0 3.0 2.9 2.9

2015 2016 2017

Hypermarket Supermarket Minimarts Traditional Groceries Wet Market Vegetable Vendor

Base – All Respondents

TOTAL SES A SES B SES C1

Buy less in total 31 27 34 24 19 24 31 27 36 34 33 39

Actively look for and buy products on

Switch to cheaper brands 16 16 20 11 12 15 16 16 19 13 20 26

Does not affect me 16 9 15 21 16 21 14 6 16 16 7 5

Buy in bulk to get lower prices 8 10 12 11 10 8 7 9 15 7 11 12

Actual no. of intv n = 2258 n=3188 n=3098

ARE CONNECTED TO INTERNET

38% OF INTERNET USERS ARE

SOURCE: NIELSEN BRICKS & CLICKS SURVEY

ONLINE OFFLINE ONLINE OFFLINE

56% OMNI-CHANNEL SHOPPERS