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Modern Trade & The Retail Business August 28 th , 2009 V

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Page 1: Modern Trade

Page 1 Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Modern Trade& The Retail

Business

August 28th, 2009

V

Page 2: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Executive Summary

• Modern trade is still developing positively in Vietnam given consumer trends and the economic recovery

• The competition is increasingly fierce with the opening of the market: key international players have eyed the market and see Vietnam as a big potential

• Retailers need to speed up to ensure maximized revenue and profit– a combination of understanding and actions

Understand market

Understand consumers

Know yourself and competitors

Management Optimum

• Nielsen has tools to help ensuring and maximizing your revenue and profits

Page 3: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

• Research Design

• Modern trade perspective

• Ensure growth in an increasingly competitive environment

• Who knows the answers knows how to deal with it

– Findings the answers to the key retailers’ needs

• Nielsen as your retailer partner

– Increase your profit and revenue with Nielsen

Agenda

Page 4: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Research Design• Nielsen Shopper Study

– Qualitative Study – Mystery Shopper– Quantitative – n=200– Saigon Coop HCMC– ABC HIB, females, 20 to 45 yo

• Nielsen Shopper trends– N = 1500– HCMC and Hanoi, DN, CT– ABC HIB, males & females, 20 to 45 yo– 40 categories FMCG & non FMCG

• Nielsen Retail Audit– Data up to Jul 2009– Based on 2 cities (HCMC, Hanoi)– Covering 43 FMCG categories

• Nielsen Consumer Confidence Study

– Conducted March 2009– Global online study > 50 countries

• Nielsen Omnibus – N=300 (each wave)– HCMC and Hanoi (Jan to May 2009)– Males & Females, 15 to 55 yo

• Macro Economic data– Vietnam Govt. General Statistics Office

• Nielsen Space Man– A merchandizing software

Page 5: Modern Trade

Page 5 Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Modern Tradeperspective

Vietnam vs Region

Page 6: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

368

425

2007 2008

Modern Trade continues to expand in 2008!Modern Trade is still growing 16% in store number and proves to be a more and more important channel ….

+16%

Number of Modern Trade stores – HCMC+HN

Discover who is driving the increase in stores…

17 20 24

83 80 76

0102030405060708090

100

2008 2009F 2010F

GTMT

Sales contribution by sector – HCMC + HN

Source: Nielsen Retail Audit

Page 7: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

A lot of potential compared to our neighborsComparing MT Vietnam to our neighbors, we also enjoy, growth, but the channel is relatively untapped versus our neighbors

88

4843

32

7

89

4843

35

9

5145

36

10

46 46

90

48

Singapore Malaysia Thailand Philippines Indonesia Vietnam

2005 2006 2007

Share of trade for modern self-service outlets in Asia

Source: Nielsen Retail Audit, all FMCG

Average

Source: Nielsen Retail Audit

Page 8: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

7366

5040 43

14

7568 64

43 47

19

7669

6054

47

20

71

Thailand Singapore Vietnam Malaysia Indonesia Philippines

2004 2005 2006 2007

And room for more playersTop 5 chains contribute to 71% of total Vietnam Modern trade

Trade concentration within the Modern Trade HCMC & HanoiShare for the top 5 chains

(Top 5 chains: Saigon CoopMart, BigC, CitiMart, MaxiMart, FiviMart)

Source: Nielsen Retail Audit, Based on FMCG categories tracked by Nielsen

Page 9: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Positive feedback from the experts …

• “Việt Nam ranked 6th globally in retail trade with an estimated revenue of USD37 Bil. Target this number will reach USD50 Bil by 2010.

Ms. Đinh Thị Mỹ Loan – Vice President, Secretary of Vietnam Retailer Association

• Vietnam falls six places due to declines in exports and the resulting decline in GDP, but long-term outlook is still positive

2009 Global Retail Development Index™, AT Kearney• According to trade department’s plan, every 100.000 residents needs a big trade center, every 10,000 residents needs a supermarket and every 1,000 residents needs at least 1 - 3 convenient stores, then the current number of modern trade isstill a far cry.

Page 10: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

66

92

96

93

Super &Hypermarkets

TraditionalGrocery

2007

2008

Occasional usage incidence of

Hyper & Supermarketsis closing up

on Traditional Grocery in 2008!

%

Source: Nielsen Shopper Trends 2009, Base: All respondents (n=1900)

Occasional usage

Page 11: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

100%

105%

109%

113%

118%

126%

135%

143%

151%

100% 101% 102%

111%

115%

119%

124%

132%

143%

2000 2001 2002 2003 2004 2005 2006 2007 2008E

UrbanRural

Source: Government Statistics Offices

Urban and Rural Growth GDP Per CapitaCompound Growth in GDP, Indexed on 2000

High GDP Growth is mostly coming from the Urban areas in Vietnam (+50% since 2000)…

Page 12: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

33%24%

14% 9% 6% 9%2% 2%

48%53%

53%51%

43% 35%

21%14%

14% 15%24%

30%39%

39%

54%58%

6% 8% 8% 11%7%

9%12% 14%

5% 8% 11% 12%

2002 2003 2004 2005 2006 2007 2008F 2009F

10+m VND7-10m VND7+m VND4-7m VND2-4m VND<2m VND

Emerging Middle Class: Increasingly Affluent And Sophisticated Consumers – HCMC+HN

Source: Nielsen Omni Bus

…and Household Income is also growing - HCMC/ HN sees increasing disposable income for consumers – an indicator for the channel development

Page 13: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

• Vietnam’s modern trade still has a lot of potential and is consistently gaining importance in share of baskets

• Currently dominated by just 5 key players

• Positive support from consumers – more money and migration trend towards Modern trade channels

Modern trade V Traditional sector

In summary

Page 14: Modern Trade

Page 14 Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Ensure growth in a more competitive environment

Current vs. CurrentCurrent vs. Future

Page 15: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Competition is fiercer among current playersCoop-mart still has a very strong SEI relative to its competitors in spite of a slight decline. Big C equity rises significantly putting it slightly above Metro.

Source: Nielsen Shopper Trends 2009, Base: All Supermarket/Hypermarket shoppers (2007 n=1009,2008 n=1494 )

0.20.3 0.1 0.1

1.2

3.7

2.5

0.8 0.80.5

0.2 0.1 0.1

1.8

0.7

0.3 0.2

0.7 0.5

3.3

1.9

Coop-martSPM

Big C SPM Metro MaximarkSPM

FivimartSPM

IntimexSPM

CitimartSPM

VinatexSPM

Hapro SPM Uni-martSPM

Bai ThoSPM

2007 2008

Store Equity

Page 16: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

While the threat is still there from the outsiders

Retail market Opening Route 1/2007: foreign retailers able to found joint-ventures with foreign capital of less than 49%. 01/01/2008: joint-ventures with no limitation for foreign retailers. 01/01/2009: 100% foreign-owned retailers allowed. First location to be approved. 01/01/2010: open trade – foreign traders are allowed to execute all kinds of retail and wholesale business in Vietnam

Page 17: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

• Location – where to put my stores?

• Suppliers – How to make them deliver quickly and give me a good price?

• Current client vs. current in-store environment- more spent / more frequent / heavier basket- in-store promotion, ranges & merchandizing

• New customers: Marketing activities effectives

What a retailer needsWhat a retailer needs……

Page 18: Modern Trade

Page 18 Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Key points to build your competitive edge

Tools to ensure revenue and profits

Page 19: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Key points to take note

Store location

Supplier management

Current customers vs. in-store management

New customer development

Finding the solutions…Finding the solutionsFinding the solutions……

Page 20: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Key points to take note

Store location

Supplier management

Current customers vs. in-store management

New customer development

An important decision when trying to determine the overall competitive marketing strategy is place

Page 21: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

We need to understand the areas well enough

Income structure

Population Structure

Store number / type density

Our strategy vs. consumer needs

Page 22: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

What should be the best position for the store?

Source: Nielsen Map Info

Page 23: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Store location?

• Know your strategy

• Know the areas

• Know the consumers

• Nielsen Infomap + Nielsen

Shopper study can help

Page 24: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Key points to take note

Store location

Supplier management

Current customers vs. in-store management

New customer development

Improving supply chain management is critical to strategy for reducing cost and maximizing added value

Page 25: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

What are your strength & weaknesses vs. competitors

We need to understand our partners well enough

Factors and attributes that drives supplier loyalty and satisfaction

How do they rank your store vs. competitors?

Key areas for improvement?

Page 26: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Power of purchaseFrequency of purchaseEase of order request

Reliable/Trustworthy Progressive Store equity Pricing Strategy

Clear and standard ordering process Ethics of purchaser Payment Process Payment abidance Returned goods policy Responsiveness to problemsTrading terms

Openness/Receptiveness Works with me to improve my business Shares market information Is Proactive Category Management Shelf Management

Source: Nielsen eQ Study

Purchasing Power

Image

Order & payment

MKT/trade Support

Retailer promotion Trade support budget Sales/Merchandising materials Effective Advertising/Promotions Speed of implementation

Buildingtrade

partnership

A decent understanding of your suppliers is required

Page 27: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Improve ASAP Maintain

Secondary improvement are

Strength

Maintain – low priority Maintain

Impo

rtan

ce

100

0

Store performance

HighAverageLow

Promotion campaign

A resource allocation plan to be in place

Location

Service

Accessibility

Placement Price

Source: Nielsen eQ Study

Page 28: Modern Trade

Page 28 Confidential & ProprietaryCopyright © 2009 The Nielsen Company

Supplier management?

• Know the suppliers’ needs

• Know your SWOT vs other supermarkets

• Nielsen eQTM study can help

Page 29: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Key points to take note

Store location

Supplier management

Current customers vs. in-store management

New customer development

Delivering a consistent in-store experience satisfying your customers help drive both repeat visits and store productivity.

Page 30: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Current customers vs. in-store management is not as simple as it looks. Key areas to cover:

• Understand consumer channel choice

• Understand consumer behavior withinMT channel

• Understand your store equityvs. competitors

• Within stores:

• Understand cross category position

• Understand the consumer behavior by category – ranges and merchandizing - Liquid Milk example

Page 31: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Current customers vs. in-store management is not as simple as it looks. Key areas to cover:

• Understand consumer channel choice

• Understand consumer behavior withinMT channel

• Understand your store equityvs. competitors

• Within stores:

• Understand cross category position

• Understand the consumer behavior by category – ranges and merchandizing - Liquid Milk example

Page 32: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Decrease vs.2007

21

59

96

100

SUPERMARKETS

96%

61%

36%

Spend mostmoney

Use Past 7days

Use Past 4weeks

OccasionallyUse

74

93

99

0

(%)

94%

80%99

100

100

77

100%

99%

77%

WET MARKET

0

3

9

4

44%

75%

CONVENIENCE STORES

Increase vs.2007

Channel Leverage 2008Wet market is still the key channel consumers spend the most and visit most while 50% consumers use supermarket on a occasional & regular basic besides traditional grocery exhibits the chance of modern trade to convert

TRADITIONAL GROCERY

Source: Nielsen Shopper Trends 2009

Page 33: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

%

Ref: Q27-Q41

7 9 7

29 33

60 63

27

582

16

8

62

45

30 31

60

37

92 91 92

4 32 3 23

5

33 3 32 1 112

0

20

40

60

80

100

fresh fruit &vegetables

fresh meat orpoultry

fresh fish orseafood

Carbonatedsoft drinks

Biscuits Shampoo LaundryDetergent

Snacks Toothbrush

Bakeries

Dealer

Cash & Carry

Wet Markets

Traditional Grocery

Cosmetics Shops

Confectionery Shops

Supermarket

Place of Most Often Purchase by CategoryWet market is chosen for Fresh Food Traditional grocery is visited for Non-fresh food like snacks, biscuits…Supermarket is a favorite place for Personal Care products like detergent, shampoo, toothbrush.

Source: Nielsen Shopper Trends 2009, Base: All respondents (n=1500)

Place of Most Often Purchase by Category

Page 34: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Top 3 factors in driving store loyalty

1.Convenience 2. Near house3. Easy to shop

1.Convenience2. Near house3. Reasonable

price1.Convenience 2. Near house3. Promotion program

1.Convenience 2. Near house 3. Easy to shop

1.Convenience2. Reasonable price3.Near my house

1.Convenience 2. Near house

3.Product availabity

1.Convenience2. Reasonable price3. Product availabity

1. Clean & Clear2. Product diversity

3. Food quality

1. Easy to shop2. One-stop shopping

3. Product quality

1. Easy to shop2. Reasonable price

3.One stop shopping

1.Convenience 2. Near house

3. Reasonable price

Source: Nielsen Shopper Trends 2009

“Convenience” and “Near my house” are 2 key factors in store choice and store loyalty. Yet in those well-developed modern-trade markets, it goes further than that!

Page 35: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

• Requirement for more choice range– Income increase– More product availabiity– More “new product” awareness

• Convenience still the key– Near house or easy to get to– One-stop shopping

• Having more experience with MT– Ambience & atmosphere– Product and service quality – Clean and sanitery

• More members during shopping trip– Family entertainment cases– Responsibility sharing for housewives

Source: Nielsen Shopper Study

Shopping trip and shopping behaviors have been changing overtime

Page 36: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Current customers vs. in-store management is not as simple as it looks. Key areas to cover:

• Understand consumer channel choice

• Understand consumer behavior withinMT channel

• Understand your store equityvs. competitors

• Within stores:

• Understand cross category position

• Understand the consumer behavior by category – ranges and merchandizing - Liquid Milk example

Page 37: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

In-store TV media needs to fit within the shopper experience

…even though shoppers noticed the TV showing ads placed above the aisle, very few actually watched

on average the customers shop the aisle for 36 secs, they don’t have time to take in a 30 sec ad

consumers would be more open to ad messages when queuing at the check-out.Brief ad messages embedded in the display may be more effective in the aisle itself

Source: Nielsen Shopper Study

Page 38: Modern Trade

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And sales assistants play an important role

…. 23% who shopped the aisle made contact with a sales assistant

Source: Nielsen Shopper Study

Page 39: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Use baskets/trolleys encourages purchasing

…. one third of consumers who shopped the aisle did not use a trolley or basket

….having an assistant offering baskets/trolleys means they shop for longer (average of 39 seconds with a basket vs 33 seconds with no basket/trolley) and buy more (average of 1.45 packs with a trolley vs1.23 with none).

Source: Nielsen Shopper Study

Page 40: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Channel choice & Modern Trade opportunity?

• Chance to convert shoppers from other channel to supermarket/convenient stores

• Convenience to the house still key yet customers are being more sophisticated. A distinct difference in ambience, product range, service, quality or price is needed

• Appropriate shopping aids helps to increase shopper’s spending

Page 41: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Current customers vs. in-store management is not as simple as it looks. Key areas to cover:

• Understand consumer channel choice

• Understand consumer behavior withinMT channel

• Understand your store equityvs. competitors

• Within stores:

• Understand cross category position

• Understand the consumer behavior by category – ranges and merchandizing - Liquid Milk example

Page 42: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Efficiency/ Loyalty Program (12%)

Large Store Format & Wide Selection (12%)

Store Accessibility (14%)

The Brand Equity model deconstructs the sources of store equity to understand its building blocks

SOURCESSOURCESWhat people know

store equityindex

Awareness (21%)

Consideration (20%)

Quality products (11%)

Pricing & VFM (10%)

Source: Nielsen Shopper Trends 2009

Page 43: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

0.48

0.330.33

0.31

0.30

0.290.29

0.29

0.29

0.28

0.27

0.260.25

0.24

0.24

0.240.24

0.24

0.22

0.170.06

0.28

Convenient to get to

Always have what I want in stock

A place where it's easy to quickly find what I need

Attractive and interesting promotions

Everything I need in the one shop

High quality prepared meal

Has programs that reward regular purchase of food & groceries

High quality fresh food

Pleasant store environment

Has high quality brands

Staff provide good service

Food and Groceries are good value for money

Has wide range of well known brands

Well presented display of products

Clean and hygienic store

Spacious

Wide range of fruit & vegetables

Wide range of fresh fish & meat

Ease of parking

Low prices for most items

Efficient checkout counters

Provides own brands as a good alternative to the main brands

Store Accessibility (14%)

Efficiency/ Loyalty Program (12%)

Quality Products (11%)

Derived Importance Ranking of Supermarket Store Attributes - All Shoppers

Large Store Format & Wide Selection (12%)

Pricing and Value for Money (10%)

• The top 2 attributes driving SEI are related to location and convenience of finding items once in store, showing people do not want to waste any time when making a shopping trip.

Source: Nielsen Shopper Trends 2009

Page 44: Modern Trade

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Relative Retailer Performance on Store Attributes

Base: All Supermarket/Hypermarket shoppers who rate Coop-mart SPM (n=677), Big C SPM (n=905), Metro (n=1089), Maximark SPM (n=294)

0 20 40 60 80 100

Chain AChain BChain CChain D

Convenient to get toAlways have what I want in stock

A place where it's easy to quickly find what I needAttractive and interesting promotions

Everything I need in the one shopHigh quality prepared meal

Has programs that reward regular purchase of food & groceriesHigh quality fresh food

Pleasant store environmentHas high quality brands

Staff provide good serviceFood and Groceries are good value for money

Has wide range of well known brandsWell presented display of products

Clean and hygienic storeSpacious

Wide range of fruit & vegetablesWide range of fresh fish & meat

Ease of parkingLow prices for most items

Efficient checkout countersProvides own brands as a good alternative to the main brands

% Associated with Retailer

diffe

rent

iato

rsim

port

ant

expe

cted

Quality Products Efficiency/ Loyalty Program

Large Store Format & Wide Selection

Pricing and Value for Money Store Accessibility Ref: Q18

Derived importance – ranked in order

• Chain A builds its successful store image from its higher convenience in the customer’s mind. Chain B performs better than Chain C on most attributes. However, Chain C stands out for its low price while Chain D need to improve in most attributes to catch up with the retail leaders.

Source: Nielsen Shopper Trends 2009

Page 45: Modern Trade

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29

15

62

9

45

38

18

9

9

9

29 33 71

22

15

44

17

64

56

31

17

18

18

35 26 78

33

1

39

41

65

61

49

41

40

40

21 5 67

Not Aware

Hard to get to

Not Consider

Awareness

Trialists

Considerers

Regulars

Dependables

Preferrers

Recommenders

38

2

46

40

58

54

47

40

38

39

18 4 62

Store Relationship Tiers

TOM Other Spont.

Prompted TOM Other Spont.

Prompted TOM Other Spont.

Prompted TOM Other Spont.

Prompted

Ref: Q11abcd, 12ab, 13abcd

SEI (3.7) 2007 SEI (3.3) 2008

Chain A Chain BSEI (1.2) 2007 SEI (1.9) 2008

Base: All Supermarket/Hypermarket shoppers (2007 n=1009, 2008 n=1494)

• A great performance of Chain B as most KPIs significantly rose vs. last year. Chain A is still strong but declined across key indicators. Encouraging shoppers to visit on regular basic with better convenience will further strengthen Chain B standing

Source: Nielsen Shopper Trends 2009

Page 46: Modern Trade

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Your chain in the consumers’ mind

• Understand the key driver for store equity

• Understand your SWOT vs. competitors

• Understand your relationship with your current clients

• Customer retention and new customer attraction is key!

Page 47: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Current customers vs. in-store management is not as simple as it looks. Key areas to cover:

• Understand consumer channel choice

• Understand consumer behavior withinMT channel

• Understand your store equityvs. competitors

• Within stores:

• Understand cross category position

• Understand the consumer behavior by category – ranges and merchandizing - Liquid Milk example

Page 48: Modern Trade

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What are the most important categories?

Page 49: Modern Trade

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Hair Conditioner

Personal Wash

Toothbrush

Body Cream Lotion

Shampoo

Deodorants

Toothpaste

Facial Care Product

Razor & Blade

Insecticide

PERSONAL CARE

Laundry Product

Insec. Aerosol

Insec. Coil

Fabric Softener

HH Cleansers

Dishwashing Liquids

HOUSEHOLD CARE

Cigarette

Gums

Ready-to-drink Tea

Soft Drink

Packaged Water

Energy

Beverage + Cigarette

Ready-To-Drink Milk

Sweetened Condensed Milk

Total Milk (IF, ADM, FCM)

Biscuit

Cooking Oil

Instant Noodle

Bouillon-Msg

Sauce

Powdered Concentrates

Tea bag

FOOD

Coffee

Snack

Sport Drink

Feminine Protection

Fruit Juice

Beer

Tissues

Page 50: Modern Trade

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Category Contribution

0 2 4 6 8 10

Ready-To-Drink Tea

Feminine Protection

Cooking Oil

Instant Noodle

Personal Wash

Laundry Products

Shampoo

Biscuits & Pie

Ready-To-Drink Milk

YTD LY YTD TY

VALUE % SHARE VAL GROWTH YTD TY VS. YTD LY

TOP 10 CATEGORIES IN MT HCMC & HN

Do you know? – Top category in MTRTDM, Biscuits & Pie & Shampoo are they key categories in HCMC+HN MT, in which LP & RTDT enjoy the highest growth!

Source: Nielsen Retail Audit

Category Growth

0 20 40 60 80 100 120

Ready-To-Drink Tea

Feminine Protection

Cooking Oil

Instant Noodle

Personal Wash

Laundry Products

Shampoo

Biscuits & Pie

Ready-To-Drink Milk

Page 51: Modern Trade

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Within one category, what brands / items should be on your range?

Page 52: Modern Trade

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Do you know? – Top brands in RTDTIn RTDT, Khong Do & C2 still the key brand yet DR Thanh is gaining share with amazing growth!

VAL % GROWTH YA BY BRANDS

10 13

0102030405060708090

100

C2

Dr.Tha

nh

Khong

Do

Shik

i

Pokk

a

% BRAND (VALUE)

C254%

Dr.Thanh23%

Shiki4%Pokka

3%

Khong Do16%

Source: Nielsen Retail Audit

New launch

TOP READY-TO-DRINK-TEA BRANDS IN MT HCMC & HN – YTD TY

Page 53: Modern Trade

Confidential & ProprietaryCopyright © 2009 The Nielsen CompanyConfidential & Proprietary • Copyright © 2009 The Nielsen Company

Top 20 SKUs in RTDTHave you got these in your RTDT ranges?

Volume %Share

C2 Green Tea Lemon Plastic Bottle 360 ml

Khong Do Green Tea Lemon Plastic Bottle 500 ml

Dr.Thanh 9 Herbals Plastic Bottle 350 ml

Shiki Green Tea Lemon Plastic Bottle 500 ml

Dr.Thanh 9 Herbals Plastic Bottle 500 ml

100 Green Tea Lemon Plastic Bottle 500 ml

C2 Green Tea Forest Fruit Plastic Bottle 360 ml

Wonderfarm Winter Melon Can 330 ml

C2 Green Tea Apple Plastic Bottle 360 ml

Khong Do Barley Tea Plastic Bottle 470 ml

Shiki Green Tea Honey Plastic Bottle 500 ml

Lipton Black Tea Lemon Plastic Bottle 455 ml

Lipton Ice Tea Lemon Can 330 ml

Lipton Pure Green Original Plastic Bottle 455 ml

Lipton Pure Green Green Tea Lemon Honey Plastic Bottle 455 ml

Khong Do Fruit Tea Green Tea Apple Plastic Bottle 365 ml

C2 Green Tea Peach Plastic Bottle 360 ml

Pokka Oolong Plastic Bottle 500 ml

Pokka Japanese Green Tea Plastic Bottle 500 ml

Khong Do Winter Melon Can 330 ml

34.7

10.9

4.7

4.7

4.4

4.3

4.2

3.9

3.3

2.9

2.3

2.3

1.3

1.2

1.2

1.1

1.0

1.0

1.0

0.9

Source: Nielsen Retail Audit

Is your ranking

the same?

Is yourpricingin line?

Compared to

General trade ?

Any new launches?

TOP READY-TO-DRINK-TEA SKUS IN MT HCMC & HN – YTD TY

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Stock management

Sufficient stock level

Source: Nielsen Retail Audit & Spaceman

Under stock levelOver stock level

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Your product range

• Understand the size and growth of the category

• What are the most potential categories and segments?

• Within the category, we need to focus on the right brand & right SKUs!

• Is your range in line with Total Modern trade or total General trade?

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Once you got the right range, what should be the merchandizing scheme?- Example with Liquid Milk category

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In order to have a good planogram, we need to understand how

consumers shop the liquid milk category

Source: Nielsen Shopper Study

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RulesRulesAmongst the safe brands, choose

the one that tastes the best

Amongst the safe brands, choose

the one that tastes the best

Must buy a ‘safe’/ good

brand

Must buy a ‘safe’/ good

brand

Kids impactKids impact29% of primary shoppers are accompanied by kids aged under 13; Of these, 59% have influenced the purchase

29% of primary shoppers are accompanied by kids aged under 13; Of these, 59% have influenced the purchase

PackPack1 litre pack sizes

play a role in conveying

information, but 81% bought 4x

small packs

1 litre pack sizes play a role in

conveying information, but 81% bought 4x

small packs

PromotionPromotion

Only works for brands within consideration

set via pre-store advertising/word

of mouth –switching – not

increasing purchase power

Only works for brands within consideration

set via pre-store advertising/word

of mouth –switching – not

increasing purchase power

DisplayDisplay

43% of purchasers

bought liquid milk from a

free-standing display

43% of purchasers

bought liquid milk from a

free-standing display

Decision making treeDecision making tree

Need – brand – price -Pack - flavor

Need – brand – price -Pack - flavor

But we also need to put in action some of the other findings about the shopper behavior

Source: Nielsen Shopper Study

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Proposed layout

Enhanced nutrition

Kids development

Nutrition

Nutrition(teens)

VinamilkDutch Lady

DutchLady Vinamilk Dutch

Lady

VinamilkOthers (Campina, Daisy, etc.)

Others (Campina, Ovaltine, Milo, etc.)

Category signage

890 – 1000ml

110ml – 140ml

Source: Nielsen Shopper Study & Space man

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Your merchandising

• Understand the behavior of shoppers

• What are the “hot spots” what are the “cold spots”?

• What is the shopper decision tree?

• What is the most profitable planogram?

• Nielsen Shopper Study and Nielsen Spaceman software can help

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Key points to take note

Store location

Supplier management

Current customers vs. in-store management

New customer development

The matter of prime importance to survive and growth is getting the new customers you need.

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77%

61%

5%

10%

1%

3%

6%

2%

0%

I shopped at the same store I always do

I just went to the closest store

I shopped at a store that a colleague, friend orrelative had recommended

I checked the newspaper or flyers for coupons andwent to the store with the attractive deals

I chose the store that I'd seen advertised recently

I heard of a new store and decided to try it

I was visiting friends/ family and went to a store thatthey usually shop at

I was passing a store that caught my attention and Itried it

None of the above

Store visit TriggersAuto-pilot is a dominant trigger for store choice. Location is another driver. Promotions only play secondary roles in triggering more shoppers.

Base : All Supermarket/Hypermarket Shoppers (n=1494)

HABIT Auto-pilot

Source: Nielsen Shopper Trends 2009

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New consumers grasp

• Understand the behavior of shoppers?

• What are your store destination categories?

• Nielsen Shopper Study can help

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Nielsen as your retailer partner

Increase profit and revenue with Nielsen

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What a Retailer needs in sum –What you need

• Comprehensive View of Retail Market

• Thorough Understanding of Shoppers

• Objective & Independent Assessment of Your Market

• Position, Strength & Weakness

• Efficient In-store Operation

• Etc…

Nielsen Retailer Services can help!

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Options of Services available

Data Exchange Service

Retailer AdvisoryService

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Retail Tracking Services Data Exchange

Track your performance as against the market and your competitors. Provide essential insights to development of effective

business strategies

Shopper Shopper TrendTrend

Retail Market Retail Market StudyStudy

Retailer Retailer PerformancePerformance

Review Review

Retailer Retailer Vendor Vendor ReviewReview

Retailer Retailer Category Category ReviewReview

Training & Training & Client ServicesClient Services

Answer your questions likeWhat is the retail market dynamic?

How am I performing as against the market?

How am I performing as against my competitor?

How am I performing on the department/category level ?

What is the general shoppers habits, perceptions and behaviour?

Data Exchange service

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Data Exchange Service Flow Chart

Receipt Quality Check &Control Data Transfer Load Report

ACNielsen对数据的处理

Retailer Report output

Nielsen

Deliver Data

Data is strictly managed to ensure Confidentiality!!

Data Exchange service

Page 69: Modern Trade

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Open new stores

Increaseshopper loyalty

Reposition

Serve for Retailers’ Strategy with different focus

EXPAND

OPTIMIZE

RETHINK

High growth potential in current stores

Fast changing shopping trends threaten established business model

Intensifying competition limits same-store salesgrowth

Challenges Objective Strategy

Retailer Advisory

Service

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Expand geographic reach

??

Market feasibility Market feasibility studiesstudies

Is it time to enterthis new market?

Site location Site location studiesstudies

Is this a good locationfor a new store?

?

?

?

?

Retailer Advisory

Service

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Customer Customer SatisfactionSatisfaction

Mystery Mystery ShopperShopper

Price Price ChecksChecks

Promotion Promotion EffectivenessEffectiveness

Category Category ManagementManagement

Price Price ElasticityElasticity

Assortment Assortment ChecksChecks

Optimize store performance

Pricing

ShoppingexperiencePromotions

Assortment

SHOPPERLOYALTY

Retailer Advisory

Service

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Rethink business model

Lifestyle & segmentation

studies

U&A studies

Price image

Brand image

Brand Positioning Store Design

Store ConceptTesting

AccompaniedShopping

Private Label

Concept & productTesting

Naming & Packagingresearch

House Brand image

Store Catchment area study

Retailer Advisory

Service

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Thank you

Q&A