CONTENTS Introduction The power partnerships driving FMCGgrowth in Asia Responding to demographic change Ageing populations, shrinking households Adapting to the change in mealtimes Smaller package sizes – and an appetite for experimentation Diierentiating amongst older shoppers 03 04 Bringing convenience and community together Bridging the gap between modern and traditional trade Shrinking stores to grow FMCG share Convenience stores as community hubs Driving down prices through competition for shelf space 08 Fusing oine and online Ordering online Targeting promotions through technology Optimising the supply chain The secrets of successful retailer partnerships in Asia 13 Reassuring on Safety and Quality17 Demonstrating values and social purpose19 Product innovation and speed to market21 Providing a shopping experience23 Conclusion 2558 51 38 90 1222 1141 851327 PHILIPPINES TAIWAN SOUTH KOREACHINA VIETNAM THAILAND PEN. MALAYSIA INDONESIA Consumer ReachPoint 2016 THE POWERPARTNERSHIPS DRIVINGFMCG GROWTH IN ASIA Marcy Kou, CEO of Kantar Worldpanel Asia Some of the fastest-growing FMCG brands on theplanet are to be found in the markets, conveniencestores, supermarket aisles and kitchen shelves of Asia.However, the growth on ooer in Asian markets remains far from evenly distributed. Multinational brandscontinue to lag behind the dramatic advances made bytheir local competitors – and few show signs of closingthe gap. Glance at the ranking of the world’s most chosenconsumer brands compiled by Kantar Worldpanel, andyou quickly notice that, across Asia, no two marketschoose the same FMCG brand most frequently. Mostare dominated by those that have emerged within theirown borders. It’s a trend that sees multinational brandsoften struggling to compete eeectively in some of thefastest-growing markets on earth. And it leavesmarketers urgently asking themselves what localbrands have that their rivals struggle to match. A large part of the answer lies in the brand and valuepropositions that local brands represent: expertlyattuned to the emotional and functional needs of theircustomers, and with business models that support INTRODUCTION 03 more accessible pricing. Most analysis of their successfocuses on these elements. However, there is a thirddriver of their dominance that is equally signiicant. Therise of local Asian FMCG brands has taken placealongside an equally dramatic rise for local retailers. The partnerships formed by these two types of Asianchampion are fundamental to their success: they help tomake local brands more mentally available thanmultinational rivals; and they support innovative retailerstrategies that are both anticipating and responding toAsia’s changing shopping habits. In this report, we will explore this hidden dimension ofthe rise of Asia’s FMCG brands. We will reveal the localretailers that increasingly act as gatekeepers to rapid- growth markets, the types of partnerships they seek,and the ways in which local businesses are responding.Through interviews with local retailers themselves, wewill explore the particular shopping habits and drivers ofsuccess of consumers in diierent Asian markets. Wewill reveal that no strategy for replicating the success ofAsian FMCG Brands can be complete unless it alsoreplicates their approach to retail.Korea Vietnam Rural 0%40%60%100% 21%79% 22%78% 24%76% 29%71% 30%70% 36%64% 80%20% China Vietnam Urban Taiwan Indonesia Urban Local/Regional Brands Global Brands Source: Kantar Worldpanel-FMCG-2016RESPONDING TO DEMOGRAPHIC CHANGE As the average age of populations increases, the averagesize of households tends to decrease. In Korea, for example,the proportion of single-person households is growing atbetween 4% and 5% per year and currently stands at 27.9%of all households. And it’s not just a changing age proolethat is shrinking the size of Asian households. Across theregion, rapid urbanisation is drawing young people to cities,and from extended family homes to smaller living spaceseither occupied alone or shared with a partner and youngfamily.Smaller households shop diierently and for diierent reasons.Where wives and mothers once planned around a weekly ormonthly shopping event, smaller households prefer to buywhat they need, when they need it. When all members of thehousehold are working, cooking and eating habits quicklystart to change. Eating out is an aaordable luxury that’sincreasingly important to young, urban populations andrepresents a growing share of food consumption. Meals areless likely to be planned and shopped for in advance; more likely to take the form of ready meals picked up on the wayto and from work. Fresh food, picked up to be cooked andeaten on the same day, is increasingly important to retailerslooking to increase footfall at their stores. Rapid demographic change is a deening feature of the retail landscape in Asia. Ageing populationsand urbanisation are combining to reshape the rhythms of shopping. They aaect how frequentlypeople shop, how far they are prepared to travel when they do, the products they buy and the brandsthey choose to buy them from.Asia’s rising retailers know that their continued success depends on anticipating their customers’changing needs – and this can have signiicant implications for their supplier relationships. 04 RESPONDING TODEMOGRAPHIC CHANGE AGEING POPULATIONS, SHRINKINGHOUSEHOLDS ADAPTING TO THE CHANGE IN MEALTIMES In China, the fresh food supermarketYonghui has innovatedin response to these trends by diversifying its stores to fitdiierent types of eating habits. Its new formats include storesthat combine restaurants with supermarkets, neighbourhoodconvenience stores that ooer fresh ingredients for the eveningmeal within walking distance, and an app-based deliveryservice that promises to deliver fruit, vegetables and chilledproducts to customers’ doorsteps within 30 minutes. This focuson freshness and quality has helped the brand to expand froman initial launch in Fujian province in 2001 to reach 580 storesacross 19 provinces today. Fresh food has always been a key element in Yonghui’spositioning. However, it also has a growing role for traditionalretail brands that have previously focused on dried goods thatcan be bought cost-eeectively in bulk. In Taiwan, PX Mart hasused a growing fresh food ooer to increase the frequency ofvisits from its traditional customer base of housewives. 。。。。。。