Prepared for: Nick Miles, Asia-Pacific Region Manager © IGD 2015 Today’s presentation Asia’s evolving grocery markets Trends influencing the meat category Summary Source: IGD Research © IGD 2015 59.4% 54% of the world’s population of the global middle class 4.9% 8.5% forecast GDP CAGR 2014-20 grocery market CAGR 2014-20 Source: theatlantic.com, UN Population, OECD January 2010, USDA economic research service, IGD Datacentre © IGD 2015 Asia’s grocery markets rising up the ranks 1 3 6 10 17 20 2,500 14% 14% 29 9% 7% 5% 5% 1% 0 2014 Source: IGD Datacentre 27 9% 9% 1,000 500 26 12% 2,000 1,500 21 2020 16% 14% 12% 10% 8% 6% 4% 2% 0% CAGR (2014-2020) Grocery market value US$bn 2020 Global Market Size Ranking CAGR © IGD 2015 And the scope for future growth remains huge Top 10 retailer market shares aggregated Modern trade market size (estimates) 2012 90% 2015F 2020F Japan 45% 47% South Korea 44% 80% 70% 60% 50% 40% 37% Thailand 34% 20% Malaysia 18% 9% Indonesia 7% 30% 20% 10% 0% 10% Philippines 8% 7% Vietnam 6% 6% China India Source: IGD Datacentre, Retailers, IGD Research. Tracked modern retailers only 50% 5% 1% 2020 2014 1% © IGD 2015 Domestic and regional retailers lead the way 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 - 14% 13% 11% 11% 9% 8% 8% 6% 4% 4% 4% 7% 8% 9% 5% 6% 4% 2% 2014 2% 1% 2020 CAGR 2014-2020 Source: IGD Datacentre, Walmart sales include Yihaodian of which it currently owns 51% share 16% 14% 12% 10% 8% 6% 4% 2% 0% CAGR 2014-2020 Sales, US$ (mn) Top 20 grocery retailers in Asia in 2020F Retailers with HQ outside Asia © IGD 2015 Meat consumption continues to grow Hong Kong +8% Australia +6% +16% Taiwan China +42% Soith Korea South Korea Japan +26% 2006 +8% Philippines 2016 +14% +16% Thailand Indonesia +15% +10% India 0 Source: FABRI, Rabobank 20 40 60 80 Kg/capita/annum 100 120 140 © IGD 2015 Trends influencing the meat category Satisfying the ever more sophisticated Asian shopper Source: IGD Research Communicating quality and provenance Showcasing product expertise Responding to changing lifestyles © IGD 2015 Middle classes demanding more and better products Wide range – Fairprice, Singapore Safety and hygiene – Aeon, Malaysia Source: IGD Research Premium cuts – City Super, Hong Kong Health and wellness – Tops, Thailand © IGD 2015 Provenance and welfare has grown in importance International – Aeon, Japan Traceability – Tesco, Thailand Source: IGD Research Natural – Green & Safe, Hong Kong Welfare – ParknShop, Hong Kong © IGD 2015 Imagery around the store to show quality Walmart, China Ole, China Source: IGD Research Cold Storage, Singapore Walmart, India © IGD 2015 Counters and special features to engage shoppers Ito Yokado, Japan Tesco, Malaysia Source: IGD Research RT Mart, China Depachika, Japan © IGD 2015 Education and expertise to differentiate Auchan, China Central Food Hall, Thailand Source: IGD Research Aeon, Malaysia City Super, China © IGD 2015 Responding to changing lifestyles Food Service – Aeon, Malaysia Experiences – Ito Yokado, China Convenience – Big C, Thailand Digital – Jasons, Hong Kong Source: IGD Research © IGD 2015 Trends will vary based on market development Retail concentrati on Stage 1: Race for space Stage 2: Process Mode Introductory advice and expertise in-store Stage 3: Sweating the Assets Engaging experiences Cooking advice Provenance Engaging displays New and exciting products Basic range Digital engagement Time TRANSACTIONAL PHILIPPINES INDONESIA CAMBODIA VIETNAM Source: IGD Research THAILAND MALAYSIA CHINA COLLABORATIVE SINGAPORE HK TAIWAN © IGD 2015 Summary – key points to take away… 1• The market is shifting and rapidly evolving 2• Retailers are looking for opportunities to differentiate 3• More sophisticated shoppers = greater opportunity 4• Different solutions required depending on market development 5• Remember local nuances 6• Authenticity will become more important Source: IGD Research © IGD 2015 The centre of excellence for strategic insights and capability development Get in touch! For further information, please contact: nick.miles@igd.com Or visit: www.igd.com © IGD 2015