WHAT’S NEXT IN SOUTHEAST ASIA - Nielsen

1 1 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not Nielsen , data drives everything we do even art. That s why we used real data to create this image. Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not S next IN SOUTHEAST ASIASEIZING UNTAPPED OPPORTUNITIES IN asia S next GROWTH FRONTIER2 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not BUT MIGHTYSEIZING UNTAPPED OPPORTUNITIES IN SOUTHEAST ASIAW hile sustainable growth opportunities are becoming harder and harder to spot around the world, SOUTHEAST asia is gaining momentum and emerging as a growth engine for local and global companies Seizing The Untapped Opportunities in SOUTHEAST asia report reveals opportunities for growth in seven SOUTHEAST asia SOUTHEAST asia ACCOUNTS FOR LESS THAN 3% OF GLOBAL LAND AREA, IT IS HOME TO MORE THAN 8% OF THE WORLD S POPULATION7 THE SEVEN COUNTRIES INCLUDED IN THIS REPORT ARE: INDONESIA MALAYSIA MYANMAR PHILIPPINES SINGAPORE THAILAND VIETNAM3 Copyright 2019 The Nielsen Company (US), LLC.

2 Confidential and proprietary. Do not asia AT A GLANCE4 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not IN BUT MIGHTY IN NUMBERW hile SOUTHEAST asia accounts for just of global land area, it is home to of the world s population - and its population is growing faster than the population of the United States, China and the : Worldometers, ; Nielsen what s next Starts Now database | of global population represents 630,671,467 WHILE SOUTHEAST asia ACCOUNTS FOR JUST OF GLOBAL LAND AREA, IT IS HOME FOR OF THE WORLD S GLOBAL LAND AREAOF GLOBAL POPULATION5 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not GROWTH IN THE PAST 5 YEARSPOPULATION GROWTH IN THE PAST 5 YEARS (%) SOUTHEAST ASIAN COUNTRIES ARE SURPASSING GROWTH LEVELS IN THE US, THE UK AND : Nielsen what s next Starts Now USAUKCHINAINDIASOUTHEAST 2019 The Nielsen Company (US), LLC.

3 Confidential and proprietary. Do not POPULATION IS RELATIVELY YOUNGWHILE COUNTRIES SUCH AS THE PHILIPPINES AND MALAYSIA HAVE A RELATIVELY YOUNG POPULATION, SINGAPORE AND THAILAND ARE HOME TO AN AGING POPULATION. THAILANDSINGAPOREMALAYSIAVIETNAMPHILIPPI NESSOUTHEAST ASIAINDONESIAMYANMAR67%60%63%62%61%58%46 %42%%<35 YEARS7 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not : Nielsen what s next Starts Now ECONOMIC INDICATORSSTABLE GDP GROWTH AND HIGH CONSUMER CONFIDENCEGDP GROWTH 2015 - 2018 Over the past four years, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam have all seen stable GDP growth. Consumer confidence in the region has also increased across the board, with material improvements in optimism levels in Malaysia, Singapore and 2019 The Nielsen Company (US), LLC.

4 Confidential and proprietary. Do not ASIANS AMONG THE MOST CONFIDENT IN THE WORLDS ource: The Conference Board Global Consumer Confidence Survey in collaboration with NielsenCONSUMER CONFIDENCE IS ON THE RISE020406080100120140 PHILIPPINESINDONESIAVIETNAMMALAYSIATHAIL ANDSINGAPOREQ4 2016Q4 2017Q4 2018 CONSUMER CONFIDENCE INDEX (Q4 2016 - Q4 2018)9 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not : The Economist intelligence UnitCONSUMERS IN THE REGION ARE DOING WELL FINANCIALLYI ncomes are growing across the region, and consumers believe they are better off than they were five years +K35-75K15-35K10-15K5-10K<5 KAVERAGE HOUSEHOLD INCOME DISTRIBUTION10 Copyright 2019 The Nielsen Company (US), LLC.

5 Confidential and proprietary. Do not ASIAVIETNAMINDONESIAPHILIPPINESMALAYSIAT HAILANDSINGAPOREA majority of SOUTHEAST Asian consumers believe that they are financially better off than they were five years ago, particularly developing economies such as Vietnam, Indonesia and the Philippines. Not only are consumers financially better off than they were, they are also able to spend comfortably and buy things just because they want them. This is particularly true for consumers in Singapore, where 67% say that they are able to spend : Nielsen Global Changing Consumer Prosperity Study (2018)58%72%86%75%71%57%48%59%GLOBALSOUT HEAST ASIAVIETNAMINDONESIAPHILIPPINESMALAYSIAT HAILANDSINGAPOREI only have enough money for food, shelter and basicsI live comfortably and am able to buy some things just because I want themI m able to spend freelyCONSUMERS WHO FEEL FINANCIALLY BETTER OFF THAN THEY WERE 5 YEARS AGOCONSUMERS PERCEPTION ON ABILITY TO SPEND67%ABLE TO SPENT COMFOTTABLY11 Copyright 2019 The Nielsen Company (US), LLC.

6 Confidential and proprietary. Do not : Nielsen Growth Reporter * Excludes MyanmarIMPROVED SPENDING POWER HAS LED TO HEALTHY FMCG GROWTH IN THE REGIONAll countries posted positive FMCG growth in 2018, with the biggest growth seen in the Philippines and VALUE GROWTH MAT Q4 2018 VS Q4 QTRMALAYSIA+ MAT+1. 3% QT RSINGAPORE- MAT+ QTRPHILIPPINES+ MAT+ QTRMYANMAR+ MAT+ QTRVIETNAM+ MAT+ QTRINDONESIA+1% M AT+1. 3% QT RASIA PACIFIC * + MAT + QTRSOUTHEAST asia * + MAT + QTR12 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not CONSUMERSWith high internet penetration in SOUTHEAST asia , reaching 83% in Singapore, 82% in Thailand and 77% in Malaysia, consumers are not only well informed, but it is also becoming increasingly complex for brands to reach and engage consumers.

7 Traditional rules of engagement no longer apply, in these : Internet World Stats March 2019 INTERNET PENETRATION IS HIGH IN SOME COUNTRIESSINGAPORETHAILANDMALAYSIAVIETNA MPHILIPPINESINDONESIAMYANMAR838277666253 334,80057,00025,00064,00067,000143,25018 ,000 PENETRATION (IN %)INTERNET USERS (IN 000)13 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not : Nielsen RMS MAT Q4 2018 *Vietnam = Modern TradeCONVENIENCE IS MORE THAN A STORE FRONTGROWTH IN CONVENIENCE SEEN ACROSS THE BOARDThe convenience/minimarket channel is growing faster than the total market, pointing to consumers increasing demand for convenient shopping biggest growth in convenience can be seen in Malaysia, where convenience/minimarkets have grown by 17% (versus 5% total market growth), followed by Vietnam where convenience has grown 13% while total market growth is at 5%.

8 GROWTH OF CONVENIENCE/MINIMARKETS TOTAL MARKETVIETNAM +13%*INDONESIA +8%SINGAPORE + +4%VS +1%VS +17%PHILIPPINES +10%THAILAND +7%VS +5%VS +9%VS + 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not DIVERSE REGIONP ositive economic indicators, along with healthy FMCG growth point towards the immense opportunity for growth in the region, which currently remains , there is no one-size-fits-all strategy to win, as each country has its own unique characteristics that set them apart from each other, as demonstrated AMONG UNIQUE DRIVERS, LIE COMMONALITIES AMONG MARKET DRIVERSINDONESIAMALAYSIAMYANMARPHILIPPIN ESVIETNAMTHAILANDSINGAPOREI ncreased Spending PowerPromotional Driven ShoppersYoung PopulationYoung Population & Growing Spending PowerOptimistic Aspiring ConsumersAging PopulationAging PopulationConvenience LifestyleGrowth Of Proximity StoresConvenience LifestylesEvolving Modern Retail LandscapeImportance Of Smaller FormatConnected ConsumersConnected ConsumersConnected ConsumersConnected ConsumersConnected Lifestyles E-Commerce & Digital Connected ConsumerAffordable IndulgencePremiumisationPremiumisationOu ter Java OpportunityNew Regulation Sugar TaxCategory Growth Esp.

9 RuralEmerging Middle Class (BPO & CFWs)In-Store Strategies Key To SuccessGrowing Health Consciousness15 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not DEEP DIVES16 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not : Lembaga Penjamin Simpanan 2014 2017 / Customer penetration Nielsen Consumer Media ViewINDONESIAINDULGENT SPENDINGI ndonesian consumers savings has continued to increase, up 5,7% in 2018 versus 2017, however spending on leisure and lifestyle items has risen. For example, dining out at coffee shops and fast food outlets have increased from 40% in 2016 to 43% in 16Q4 17Q4 18404343 FUNDS FROM SAVINGS ACCOUNT + TIME DEPOSIT (IN BILLION RP, Q3 2018)DINING OUT INCIDENCES (COFFEE SHOPS AND FAST FOOD)18 Copyright 2019 The Nielsen Company (US), LLC.

10 Confidential and proprietary. Do not SEEK INDULGENCES imilar trends are observed in FMCG categories that consumers are prepared to spend more on indulgence such as Liquid Milk (+9%), Chocolate (+8%) and Mineral Water (+8%) which are experiencing higher growth in 2018. Contributing factors included attractive thematic packaging, variant innovation, increased distribution, variety of range and affordable : Nielsen CATEGORIES SEE GROWTHGROWTH IN INDULGENT CATEGORIES+2% BISCUIT+5% SKINCARE+8% MINERAL WATER+5% SNACKS+9% LIQUID MILK+8% CHOCOLATE19 Copyright 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not MIDDLE CLASS SEEKS CONVENIENCEBOOM IN PROXIMITY SHOPPINGIn Indonesia, with growing middle class and increasingly busy life, proximity and convenience have become very important to consumers.