EXECUTING IN
DEVELOPING MARKETS
Sharon Skurnac
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
EXECUTING IN DEVELOPING MARKETS
Managing
geographic and
population
expansion
Vibrant and
evolving
trade
Evolutionary
process for
growth
Using
technology
and innovation
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
DEVELOPING MARKET CONSUMERS
LIVING IN HUTS AND HIGHRISES……
COMMUTING ON DIRT PATHS AND MAIN MOTORWAYS……
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
TRADITIONAL TRADE RETAIL ENVIRONMENT
As diverse and complex as the consumer
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INDIA DOMINATES TT GLOBAL PRESENCE
Africa not to be ignored
16%
INDIA
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
AFRICA
% OF GLOBAL
TRADITIONAL TRADE
STORES (25 MM)
36%
CHINA
LATAM
24%
12%
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AFRICA HAS TOP TRADITIONAL TRADE PENETRATION
Table Tops, Dukas and Home Stores not commonly found in other regions
87%
40%
42%
45%
60%
58%
55%
HUNGARY
88%
RUSSIA
13%
UAE
91%
12%
OMAN
99%
9%
SAUDI ARABIA
99%
KENYA
99%
ETHIOPIA
99%
UGANDA
99%
COTE D'IVOIRE
NIGERIA
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
100%
1%
CAMEROON
1%
Traditional
POLAND
Modern
50%
50%
ROMANIA
% of store types
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
STRATEGY IN AFRICA
Getting products to consumers is vital, but challenging
Almost 594 million consumers
being served through 2.6 million
retail points
‘I buy brands that are easily
available’ was the second ranked
purchase driver
Strong distribution is more key to
success in innovations in Africa
than Asia, East Europe and LATAM
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THE AFRICAN RETAIL ENVIRONMENT
Commonality across the continent
Retail Universe by Region
1,200,000
1,000,000
1,033,297
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
800,000
600,000
400,000
639,862
445,615
472,481
EAST AFRICA
(AVG POP: 301)
CENTRAL AFRICA
(AVG POP: 227)
200,000
0
WEST AFRICA
(AVG POP: 202)
NORTH AFRICA
(AVG POP: 225)
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
THE AFRICAN RETAIL ENVIRONMENT
Commonality across the continent
7%
16%
32%
TRADE
CHANNELS
GROCERIES
CONVENIENCE
HORECA
OTC
42%
There are local store types but structural commonality and comparable patterns of channel
importance are spreading across the Sub Sahara Continent
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
RETAIL UNIVERSE
Uganda is constantly changing and evolving
30% growth in store numbers in 2 years
164,000 outlets of which two thirds are in Rural areas
Equal growth in Urban and Rural
Movement to small but permanent outlets
Conversely, in Ghana trends are towards larger outlets
Small emerging channels are present only in Kampala
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MACRO LEVEL OPPORTUNITY BY COUNTRY
Example – Temporary Stores
OBSERVATION
CONCLUSION
KEY SUPPLIERS
20%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
KENYA
Kenya ‘s temporary
stores are an extension
of wholesalers
0%
27%
Fostering strong ties
to key wholesalers
may directly impact
sales
RETAILER
53%
WHOLESALER
DISTRIBUTOR
9% 2%
NIGERIA
Nigeria’s temporary
stores are an extension
of retailers
Consumer marketing
may be more efficient
than a direct to retail
strategy
MANUFACTURER
3%
86%
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CHANNEL AND MICRO UNDERSTANDING IS CRUCIAL
Focus on Mobile Hawkers in Nigeria
Areas Covered
Inventory
85 percent of vendors always carry the
same products
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
7% Anywhere in town
23% Move about block
80% have turnover under $200/wk
9% Move along road
More than 50% sold telecom products.
61% Same spot
1 in three sold Carbonated Soft Drinks
Only 15% carried small pack items
(Cigarettes, Analgesics, Gum)
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
MANUFACTURERS’ CHALLENGES IN ROUTE TO MARKET
Are distributor networks
optimized?
Where are the high impact
wholesalers and how do you
reach them?
What are the distribution layers
and how can they be optimized?
Are any missing?
Grey/ black market?
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
THE NAIROBI ‘MODEL MARKET’
Shows Importance of Understanding Opportunity at the Micro Level
• Uncommon Catchment Area
• 2 Key Wholesalers Reach all
Retailers
• Distributors are Competing
Neighbours
• Unique Patterns by Product
Category
Irregular micro patterns and spider webs of complexity
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
DISTRIBUTION ATTRIBUTES DICTATE STRATEGIES
SAVOURY
ANALGESICS
TOOTHPASTE
DISTRIBUTION
Very streamlined distribution with a
few key players
Widespread distribution with some
depth though no truly dominant
players
Extremely flat and fragmented
distribution
STRATEGY
Focus on relationship with “Golden
Touch Point” suppliers
Must build relationships across
many distributors
Focus on retailers to strengthen the
presence of your products
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
PUSH BIKES: THE FINAL POINT OF DISTRIBUTION
OBSERVATIONS
•
•
•
•
•
Varied routines based on daily orders
Morning to evening 6 to 7 days a week
Fewer than 10 different products, mainly
beverages
10 to 20 stops a day
60% of retailers believe push/motorbikes
are cheaper
CONCLUSIONS
•
•
•
Demonstrates influence and reach of key
distributors
Numerous and small volumes but can grow
distribution
They maintain a direct link to stores impacting
pricing, promotion and new products
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MANUFACTURER EVOLUTION IN TT
Right products, right stores, right price
INFLUENCE
DEMAND
VALUE
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
DRIVE
FOCUS
ENSURE
SUPPLY
Availability
Efficiency
Segment stores and
prioritize resources to drive
greater executional impact.
Insights
Understand what motivates
the TT shopper to buy.
Activate stimuli to change
purchasing behavior.
Close gaps on all consumer
purchase points.
EXECUTIONAL MEASUREMENT
ROI
Performance Measurement
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INNOVATION: THE HEART OF DEVELOPING MARKETS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Improved quality, coverage and insights
LEVERAGE
TECHNOLOGY
CREATE NEW
METHODOLOGIES
CENTRALIZATION &
SIMPLIFICATION
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INNOVATION PLAYS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Efficiency, Coverage, Actionability
MOBILE
DATA COLLECTION
Exported to 50
countries in 2012
Quality and controls
Specific and useable
results
SOCIAL MEDIA &
CROWD-SOURCING
MOBILE
DELIVERY
SATELLITE &
MAPPING
Large “field force”
Ground Truth
Geographically disperse
Understanding Growth
Fast, efficient, and cost
effective method
Improved quality and
accuracy
Data at the point of
action
Global Expertise, Cross Functional Teams, Rapid Development
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FASTER, MORE ACCURATE, TRADITIONAL TRADE INSIGHTS
Live in 45 countries
25 million + traditional trade stores in
developing markets
Wholesale & Retail Trading Area Indexes
WHOLESALER
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Helping clients increase business in developing
markets by 2-3x over the next 5 years with
optimized distribution, pricing, assortment
Mobile Enumeration of Stores
MOBILE QRE
RETAILER
INDEX
148
Via satellite
imagery &
modeling
INDEX
67
DIGITAL MAPS
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
NEW COVERAGE VIA SATELLITE CARTOGRAPHY
SATELLITE IMAGE
SPECTRAL ANALYSIS
OPTIMAL FORAGING THEORY
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
FINDING OPEN MARKETS FROM THE SKY
Can we find, size and track Africa open markets using satellite images?
PROOF OF CONCEPT TEST
•
Identify visual features of 15 known
markets in Nairobi
•
Find additional markets based on
visual features
RESULTS
•
Team found 8 new possible markets
•
Seven are confirmed markets
•
One had 3 markets in close proximity
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
FINDING OPEN MARKETS FROM THE SKY
METHODOLOGY
ACTIONABILITY
Find open markets in “White Space”
geographies
Identify new markets more quickly
Track growth over time
More frequent and efficient sales
volume estimations
Provide Route to Market insight
Provide distributor and delivery
information and local knowledge
Refine current Universe Estimates
and sampling methods
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
ESTIMATING WHITE SPACES OPPORTUNITY
Using new approaches
POPULATION
STATS
SATELLITE
IMAGERY
UNIVERSE
KPIs
AUDIT DATA
BENCHMARKS
WHITE
SPACE
OPEN MARKET
ESTIAMTIONS
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